Chapter 14 PDF

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Chapter14.ImprovingServiceQualityandProductivityEssentialsofServicesMarketing,SecondEdition
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Chapter 14. Improving Service Quality and Productivity

LearningObjectives
Bytheendofthischapter,thereadershouldbeableto:
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LO1Explainhowqualityandproductivityrelatetoeachotherinaservicecontext.
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LO2Describethedimensionsofservicequality.
LO3Demonstratehowtousethegapsmodelfordiagnosingandaddressing
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servicequalityproblems.
LO4Differentiatebetweenhardandsoftmeasuresofservicequality.
LO5Explainthecommonobjectivesofeffectivecustomerfeedbacksystems.
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LO6Describekeycustomerfeedbackcollectiontools.
LO7Befamiliarwithhardmeasuresofservicequalityandcontrolcharts.
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LO8Selectsuitabletoolstoanalyzeserviceproblems.
LO9Appreciatethefinancialimplicationsofqualityimprovements.
LO10Defineandmeasureserviceproductivity.
LO11Understandthedifferencesbetweenproductivity,efficiency,and
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effectiveness.
LO12Recommendthekeymethodstoimproveserviceproductivity.
LO13Knowhowproductivityimprovementsimpactqualityandvalue.
LO14ExplainhowTQM,ISO9000,theMalcolmBaldrigeApproach,andSix
Sigmarelatetomanagingandimprovingservicequalityandproductivity.
OpeningVignette:ImprovingServiceQualityinaFerryCompany
SealinkBritishFerries,whoserouteslinkedBritaintoIrelandandseveralEuropean
countries,wasapoorservicequalityprovider.Itstopdown,militarystylestructurefocused
ontheoperationalaspectsofshipmovements,notthequalityofcustomersexperiences.In
1991,SealinkwasacquiredbytheSwedishcompanyStenaLine,whichisoneoftheworlds
largestcarferryoperatorstoday.IncontrasttoSealink,Stenahadawholedepartment
devotedtoimprovingitsservicequality.
Beforethetakeover,Sealinkdidnotfocusonpunctualorreliableoperations,andferries
wereoftenlate.Customercomplaintswereignored,andtherewaslittlepressurefrom
customerservicemanagerstoimprovethesituation.Afterthetakeover,thingsstartedto
change.Theferryoperatorsolvedtheproblemoflatedeparturesandarrivalsby
concentratingonindividualproblemareas.Ononeroute,forinstance,theportmanager
involvedalloperationalstaffandgaveeachpersonresponsibilityoveraparticularaspectof
theimprovementprocess,thuscreatingemployeeownership.Theykeptdetailedrecords
ofeachsailing,togetherwithreasonsforlatedepartures.Theyalsokepttrackof
competitorsperformance.Inthisway,staffmembersindifferentjobpositionshadclose
linkswitheachother.Customerservicestaffalsolearnedfromexperience.Withintwo
years,theStenaferriesonthisroutewereoperatingatcloseto100%punctuality.
Onboardservicewasanotherareachosenforimprovement.Historically,customerservice
managersdidwhatwasconvenientforstaffratherthancustomers.Thismeantthatstaff
couldbehavingmealbreaksattimeswhencustomerdemandforservicewasgreatest.As
oneobservernoted,Customerswereignoredduringthefirstandlasthalfhouronboard,
whenfacilitieswereclosed.Customerswerelefttofindtheirownwayaround[theship]...
Staffonlyrespondedtocustomerswhen[they]initiatedadirectrequestandmadesome
efforttoattracttheirattention.
Personnelfromeachonboardfunctionalareahadtochooseaparticularareaforservice
qualityandproductivityimprovements,andworkinsmallgroupstoachievethis.Initially,
someteamsweremoresuccessfulthanothers,resultingindifferinglevelsofservicefrom
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oneshiptoanother.Afterthat,managerssharedideasandexperiences,learningfromeach
otherssuccessesandfailures,andmadefurtherchangesontheirindividualships.Together,
theemployeeshavecomeupwithalmost1,500improvementideassince2006.
By2011,StenaLinehad35shipssailingon19routes,carryingabout16millionpassengers
andthreemillionvehicleseachyear.Theyincludedthreeoftheworldslargestfastferries.
Stenawasaleaderinallitsmarkets.Thecompanysfocuswasonconstantserviceand
productimprovement.Saysthecompanyswebsite:
MakingGoodTimesumsuptheessenceofStenaLinesactivitiesfast,convenient,and
efficientseatravel.TravellingwithStenaLineisaboutmorethanjustgettingfromone
placetoanotheritisalsoaboutescapingfromeverydaylife,relaxing,spendingtime
together,andeatingwell.Atravelalternativethatcannotbebeaten.
LO1
Explainhowqualityandproductivityrelatetoeachotherinaservicescontext.
Integrating Service Quality and Productivity Strategies

TheStenaLinesuccessstoryintheopeningvignetteisanexcellentexamplethatshows
howimprovingservicequalityandproductivitycanturnafailingbusinessaround.Wewill
learninthischapterthatqualityandproductivityaretwinpathstocreatingvalueforboth
customersandcompanies.
Inbroadterms,qualityfocusesonthebenefitscreatedforthecustomerssideofthe
equation,andproductivityaddressesthefinancialcostsincurredbythefirm.Ifnotproperly
integrated,thesetwoaspectscanbeinconflict.Forexample,makingserviceprocesses
moreefficientmaynotresultinabetterqualityexperienceforcustomers.Inaddition,
gettingserviceemployeestoworkfastermaysometimesbewelcomedbycustomersbut
maymakethemfeelrushedandunwantedatothertimes.Likewise,marketingstrategies
designedtoimprovecustomersatisfactioncanprovecostlyanddisruptiveiftheimplications
foroperationsandhumanresourceshavenotbeencarefullythoughtthrough.Thebottom
lineisthatqualityandproductivityimprovementstrategiesmustbeconsideredtogether
ratherthanseparately.Marketing,operations,andhumanresourcemanagersneedtowork
togethertoensuretheycandeliverqualityexperiencesmoreefficientlytoimprovethe
longtermprofitabilityofthefirm.
What Is Service Quality?

Whatdowemeanwhenwespeakofservicequality?Sinceservicesareintangible,itishard
toevaluatethequalityofaservicecomparedtogoods.Inaddition,customersareoften
involvedinserviceproduction,soadistinctionneedstobedrawnbetweentheprocessof
servicedeliveryandtheactualoutput(oroutcome)oftheservice.
Wedefineservicequalityasahighstandardofperformancethatconsistentlymeetsor
exceedscustomerexpectations.Assuggestedhumorouslybytherestaurantillustrationin
Figure14.1,servicequalitycanbedifficulttomanage,evenwhenfailuresaretangiblein
nature.
Figure14.1.Servicequalitycanbedifficulttomanageforthefussydiner.
LO2
Describethedimensionsofservicequality.
Dimensions of Service Quality

ValarieZeithaml,LeonardBerry,andA.Parasuramanhaveconductedintensiveresearch
onservicequalityandidentified10dimensionsusedbyconsumersinevaluatingservice
quality(Table14.1).Insubsequentresearch,theyfoundahighdegreeofcorrelation
betweenseveralofthesevariablesandsoconsolidatedthemintofivebroaddimensions:
Tangibles(appearanceofphysicalelements).
Reliability(dependableandaccurateperformance).
Responsiveness(promptnessandhelpfulness).
Assurance(credibility,security,competence,andcourtesy)(Figure14.2).
Table14.1.Genericdimensionsusedbycustomertoevaluateservice
quality
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Figure14.2.JuliusBr,aproviderofprivatebankingservices,emphasizes
itsdedicationtoserviceexcellence.
Empathy(easyaccess,goodcommunications,andcustomerunderstanding).
LO3
Demonstratehowtousethegapsmodelfordiagnosingandaddressingservicequality
problems.
Identifying and Correcting Service Quality Problems

Afterunderstandingwhatservicequalityis,letusexploreamodelthatallowsustoidentify
andcorrectservicequalityproblems.
The Gaps Model in Service Design and Delivery

ValarieZeithaml,A.Parasuraman,andLeonardBerryidentifiedfourpotentialgapswithin
theserviceorganizationthatmayleadtoafifthandmostseriousfinalgapthedifference
betweenwhatcustomersexpectedandwhattheyperceivedwasdelivered.
Figure14.3
extendsandrefinestheirframeworktoidentifyatotalofsixtypesofgapsthatcanoccurat
differentpointsduringthedesignanddeliveryofaserviceperformance.
Figure14.3.TheGapsModel.
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Source:AdaptedfromtheoriginalfivegapsmodeldevelopedbyParasuraman,
A.,Zeithaml,V.A.,&Berry,L.L.Aconceptualmodelofservicequalityandits
implicationsforfutureresearch.JournalofMarketing49,Fall19854150
Zeithaml,V.A.,Bitner,M.J.,&Gremler,D.ServicesMarketing:Integrating
CustomerFocusAcrosstheFirm(p.46.).NY:McGrawHill/Irwin,2006.A
furthergap(Gap5)wasaddedbyChristoperLovelock(1994),ProductPlus(p.
112).NY:McGrawHill.
Letsexplorethesixgapsinmoredetail:
Gap1:Theknowledgegapisthedifferencebetweenwhatseniormanagementbelieves
customersexpectandwhatcustomersactuallyneedandexpect.
Gap2:Thepolicygapisthedifferencebetweenmanagementsunderstandingof
customersexpectationsandtheservicestandardstheysetforservicedelivery.Wecallit
thepolicygapbecausethemanagementhasmadeapolicydecisionnottodeliverwhat
theythinkcustomersexpect.Reasonsforsettingstandardsbelowcustomerexpectations
aretypicallycostandfeasibilityconsiderations.
Gap3:Thedeliverygapisthedifferencebetweenservicestandardsandtheservice
deliveryteamsactualperformanceonthesestandards.
Gap4:Thecommunicationsgapisthedifferencebetweenwhatthecompany
communicates,andwhatthecustomerunderstandsandsubsequentlyexperiences.Thisgap
iscausedbytwosubgaps.
First,theinternalcommunicationsgapisthedifference
betweenwhatthecompanysadvertisingandsalespersonnelthinkaretheproducts
features,performance,andservicequalitylevelandwhatthecompanyisactuallyableto
deliver.Second,theexternalcommunicationsgap(alsoreferredtoastheoverpromisegap)
canbecausedbyadvertisingandsalespersonnelbeingassessedbythesalestheygenerate.
Thiscanleadthemtooverpromiseinordertocapturesales.
Gap5:Theperceptionsgapisthedifferencebetweenwhatisactuallydeliveredand
whatcustomersfeeltheyhavereceivedbecausetheyareunabletoaccuratelyjudgeservice
qualityaccurately.
Gap6:Theservicegapisthedifferencebetweenwhatcustomersexpecttoreceiveand
theirperceptionoftheservicethatisactuallydelivered.
Inthismodel,Gaps1,5,and6representexternalgapsbetweenthecustomerandthe
organization.Gaps2,3,and4areinternalgapsoccurringbetweenvariousfunctionsand
departmentswithintheorganization.
Key Ways to Close the Gaps in Service Quality

Gapsatanypointinservicedesignanddeliverycandamagerelationshipswithcustomers.
Theservicequalitygap(Gap6)isthemostimportant.Hence,themaingoalinimproving
servicequalityistocloseornarrowthisgapasmuchaspossible.However,toachievethis,
serviceorganizationsusuallyneedtoworkonclosingtheotherfivegapsdepictedinFigure
14.3.Improvingservicequalityrequiresidentifyingthespecificcausesofeachgapandthen
developingstrategiestoclosethem.
WesummarizeaseriesofgenericprescriptionsforclosingthesixqualitygapsinTable14.2.
Theseprescriptionsareagoodstartingpointtothinkabouthowtoclosespecificgapsinan
organization.However,eachfirmmustdevelopitsowncustomizedapproachtoensurethat
servicequalitybecomesandremainsakeyobjective.
Table14.2.Suggestionsforclosingservicequalitygaps
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Source:AdaptedandextendedfromValarieA.Zeithaml,A.Parasuraman,and
LeonardL.Berry,DeliveringServiceQuality:BalancingCustomer
PerceptionsandExpectations.NewYork:TheFreePress,1990,chapters47
andValarieA.Zeithaml,MaryJoBitnerandDwayneGremler,Services
Marketing:IntegratingCustomerFocusAcrosstheFirm,4thed.NewYork:
McGrawHill,2006,Chapter2.Theremainingprescriptionsweredevelopedby
theauthors.
Measuring and Improving Service Quality

Wenowunderstandthegapsmodelandthegeneralprescriptionsonhowtoclosethesix
qualitygaps.Letusnextdiscusshowtousemeasurementtoguideourservicequality
improvementefforts.Itiscommonlysaidthatwhatisnotmeasuredisnotmanaged.
Withoutmeasurement,managerscannotbesurewhetherservicequalitygapsexist,let
alonewhattypesofgaps,wheretheyexist,andwhatpotentialcorrectiveactionsshouldbe
taken.Measurementisalsoneededtofindoutwhethergoalsforimprovementaremet
afterchangeshavebeencarriedout.
LO4
Differentiatebetweenhardandsoftmeasuresofservicequality.
Soft and Hard Service Quality Measures

Customerdefinedstandardsandmeasuresofservicequalitycanbegroupedintotwobroad
categories:softandhard.Softstandardsandtheirmeasuresarethosethatcannoteasily
beobservedandmustbecollectedbytalkingtocustomers,employees,orothers.Asnoted
byValarieZeithamlandMaryJoBitner,softstandardsprovidedirection,guidance,and
feedbacktoemployeesonwaystoachievecustomersatisfactionandcanbequantifiedby
measuringcustomerperceptionsandbeliefs.
SERVQUAL(seeAppendix14.1)isan
exampleofacomplexsoftmeasurementsystem,andwewilldiscussavarietyofcustomer
feedbacktoolslaterinthischapter.
Hardstandardsandmeasuresarecharacteristicsandactivitiesthatcanbecounted,timed,
ormeasuredthroughaudits.Suchmeasuresmayincludehowmanytelephonecallswere
droppedwhilecustomerswereonhold,thetemperatureofaparticularfooditem,how
manytrainsarrivedlate,howmanybagswerelost,orhowmanypatientsmadea
completerecoveryfollowingaspecifictypeofsurgery.Organizationsthatareknownfor
excellentservicemakeuseofbothsoftandhardmeasures.Theseorganizationsaregoodat
listeningtoboththeircustomersandtheircustomercontactemployees(Figure14.4).
Figure14.4.SocialmediasuchasFacebookandTwitterhavebeen
deployedbyorganizationstogathervaluablefeedbackfromcustomersin
recentyears.
Wewillnextgiveyouacomprehensiveoverviewofsoftmeasuresinthesectionon
customerfeedback,followedlaterbyasectiononhardmeasures.
Learning from Customer Feedback
Howcancompaniesmeasuretheirperformanceagainstsoftstandardsofservicequality?
AccordingtoLeonardBerryandA.Parasuraman:
[C]ompaniesneedtoestablishongoinglisteningsystemsusingmultiplemethodsamong
differentcustomergroups.Asingleservicequalitystudyisasnapshottakenatapointin
timeandfromaparticularangle.Deeperinsightandmoreinformeddecisionmakingcome
fromacontinuingseriesofsnapshotstakenfromvariousanglesandthroughdifferentlenses,
7
whichformtheessenceofsystematiclistening.
Inthissection,wediscusshowcustomerfeedbackcanbesystematicallycollected,analyzed,
andpassedontorelevantdepartmentsthroughacustomerfeedbacksystem(CFS)to
achievecustomerdrivenlearningandserviceimprovements.
Key Objectives of Effective Customer Feedback Systems

LO5
Explainthecommonobjectivesofeffectivecustomerfeedbacksystems.
Itisnotthestrongestspeciesthatsurvive,northemostintelligent,buttheonesmost
responsivetochange,wroteCharlesDarwin.Similarly,manyplannershaveconcluded
that,inincreasinglycompetitivemarkets,thebestcompetitiveadvantageforafirmisto
learnandchangefasterthanthecompetition.
Effectivecustomerfeedbacksystems
facilitatefastlearning.Theirobjectivesusuallyfallintothefollowingthreemaincategories:
1. Assessment and Benchmarking of Service Quality and Performance
TheobjectiveistoanswerthequestionHowsatisfiedareourcustomers?Thisobjective
includeslearningabouthowwellafirmperformedincomparisontoitsmaincompetitor(s),
incomparisontothepreviousyear(orquarter,ormonth),andwherethefirmwantstobe
thefollowingyear.Benchmarkingdoesnotonlyhavetobewithcompaniesfromthesame
industry.Forexample,SouthwestAirlinesbenchmarksFormulaOnepitstopsforspeedy
turnaroundofaircraftPizzaHutbenchmarksFederalExpressforontimepackagedelivery
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andIkeaexaminesthemilitaryforexcellenceincoordinationandlogisticsmanagement.
2. Customer-Driven Learning and Improvements
Here,theobjectiveistoanswerthequestions,Whatmakesourcustomershappyor
unhappy?andWhatarethestrengthswewanttocement,andwhataretheweaknesses
weneedtoimprove?Forthis,morespecificordetailedinformationonprocessesand
productsisrequiredtoguideafirmsserviceimprovementeffortsandtoseewhichareas
havepossiblehighreturnsforqualityinvestment.
3. Creating a Customer-Oriented Service Culture
Thisobjectiveisconcernedwithfocusingtheorganizationoncustomerneedsandcustomer
satisfaction,andmovingtheentireorganizationtowardaservicequalityculture.
Ofthethreeobjectivesjustdiscussed,firmsseemtodowellonthefirstbutmissgreat
opportunitiesintheothertwo.NeilMorgan,EugeneAnderson,andVikasMittalconcluded
intheirresearchoncustomersatisfactioninformationusage(CSIU)thefollowing:
Manyofthefirmsinoursampledonotappeartogainsignificantcustomerfocusedlearning
benefitsfromtheirCS[customersatisfaction]systems,becausetheyaredesignedtoact
primarilyasacontrolmechanism[i.e.,ourassessmentorbenchmarking]....[Firms]may
bewellservedtoreevaluatehowtheydeploytheirexistingCSIUresources.Themajority
ofCSIUresources...areconsumedinCSdatacollection.Thisoftenleadstotoofew
resourcesbeingallocatedtotheanalysis,dissemination,andutilizationofthisinformation
10
torealizefullythepotentialpaybackfromtheinvestmentindatacollection.
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Use a Mix of Customer Feedback Collection Tools

LO6
Describekeycustomerfeedbackcollectiontools.
ReneeFleming,sopranoandAmericasbeautifulvoice,oncesaid,Wesingersare
unfortunatelynotabletohearourselvessing.Yousoundentirelydifferenttoyourself.We
needtheearsofothersfromoutside.Likewise,firmsneedtolistentothevoiceofthe
customer.Table14.3givesanoverviewoftypicallyusedfeedbacktoolsandtheirabilityto
meetvariousrequirements.Recognizingthatdifferenttoolshavedifferentstrengthsand
weaknesses,servicemarketersshouldselectamixofcustomerfeedbackcollectiontools
thatjointlydelivertheneededinformation.AsLeonardBerryandA.Parasuraman
observed,Combiningapproachesenablesafirmtotapthestrengthsofeachand
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compensateforweaknesses.
Table14.3.Strengthsandweaknessesofkeycustomerfeedbackcollection
tools
Source:AdaptedfromJochenWirtzandMonicaTomlin,Institutionalizing
CustomerdrivenLearningthroughFullyIntegratedCustomerFeedback
Systems,ManagingServiceQuality10,no.4(2000):210.
Total Market, Annual, and Transactional Surveys
Totalmarketsurveysandannualsurveystypicallymeasuresatisfactionwithallmajor
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customerserviceprocessesandproducts. Thelevelofmeasurementusuallyishigh,with
theobjectiveofobtainingaglobalindexorindicatorofoverallservicesatisfactionforthe
entirefirm.
Overallindicessuchasthesetellushowsatisfiedcustomersare,butnotwhytheyare
happyorunhappy.Therearelimitstothenumberofquestionsthatcanbeaskedabout
eachindividualprocessorproduct.Forexample,atypicalretailbankmayhave3050key
customerserviceprocesses(e.g.,fromcarloanapplicationstocashdepositsattheteller).
Manysurveyshaveroomforonlyoneortwoquestionsperprocess(e.g.,howsatisfiedare
youwithourATMservices?)andcannotaddressissuesingreaterdetail.
Incontrast,transactionalsurveys,alsocalledinterceptsurveys,typicallyareconductedafter
customershavecompletedaspecifictransaction(Figure14.5).Atthispoint,iftimeallows,
theymaybeaskedabouttheprocessinsomedepth.Suchfeedbackcantellthefirmwhy
customersarehappyorunhappywiththeprocess,andusuallyshowshowcustomer
satisfactioncanbeimproved.
Figure14.5.Transactionalsurveysaretypicallyconductedfollowingservice
delivery.
Allthreesurveytypesarerepresentativeandreliablewhendesignedproperly.
Representativenessandreliabilityarerequiredfor:
1)Accurateassessmentsofwherethecompany,aprocess,branch,team,orindividual
standsrelativetoqualitygoals.Itisimportanttohavearepresentativeandreliable
sample,soastoensurethatobservedchangesinqualityscoresarenottheresultofsample
biasesand/orrandomerrors.
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2)Evaluationsofindividualserviceemployees,servicedeliveryteams,branches,and/or
processes,especiallywhenincentiveschemesarelinkedtosuchmeasures.The
methodologyhastobewatertightifstaffaretotrustandbuyintotheresults,especially
whensurveysdeliverbadnews.
Thepotentialforservicerecoveryisimportantandshould,ifpossible,beincorporatedinto
feedbackcollectiontools.However,manysurveyspromisethattherespondentswould
remainanonymous,whichthenmakesitimpossibletoidentifyandrespondtodissatisfied
respondents.Inpersonalencountersortelephonesurveys,interviewerscanbeinstructedto
askcustomerswhethertheywouldlikethefirmtogetbacktothemondissatisfyingissues.
Service Feedback Cards
Thispowerfulandinexpensivetoolinvolvesgivingcustomersafeedbackcard(oranonline
popupform,email,orSMS)followingcompletionofamajorserviceprocessandinviting
themtoreturnitbymailorothermeanstoacentralcustomerfeedbackunit(Figure14.6).
Forexample,afeedbackcardcanbeattachedtoeachhousingloanapprovalletterorto
eachhospitalinvoice.Thesecardsareagoodindicatorofprocessqualityandyieldspecific
feedbackonwhatworkswellandwhatdoesnt.However,customerswhoaredelightedor
verydissatisfiedarelikelytobeoverrepresentedamongtherespondents.Thisaffectsthe
reliabilityandrepresentativenessofthistool.
Figure14.6.ThewidespreaduseofSMStextmessagingallowsfor
convenientmobilefeedback.
Mystery Shopping
Servicebusinessesoftenusemysteryshopperstodeterminewhetherfrontlinestaffare
displayingdesiredbehaviors(seeServiceInsights14.1).Banks,retailers,carrentalfirms,
andhotelsareamongtheindustriesmakingactiveuseofmysteryshoppers.Forexample,
thecentralreservationofficesofaglobalhotelchainmayappointacompanytoconducta
largescalemonthlymysterycallersurveytoassesstheskillsofindividualassociatesin
relationtothephonesalesprocess.Suchactionsascorrectlypositioningofthevarious
products,upsellingandcrossselling,andclosingthedealaremeasured.Thesurveyalso
examinesthequalityofthephoneconversationonsuchdimensionsasawarmandfriendly
greetingandestablishingrapportwiththecaller.Mysteryshoppinggivesindepth
insightsforcoaching,training,andperformanceevaluation.
Unsolicited Customer Feedback
Customercomplaints,compliments,andsuggestionscanbetransformedintoastreamof
informationthatcanbeusedtohelpmonitorqualityandhighlightimprovementsneededto
theservicedesignanddelivery.Complaintsandcomplimentsarerichsourcesofdetailed
14
feedbackonwhatmakescustomersunhappyandwhatdelightsthem. Therefore,similar
tofeedbackcards,unsolicitedfeedbackisnotareliablemeasureofoverallcustomer
satisfaction,butitisagoodsourceofimprovementideas.
Detailedcustomercomplaintandcomplimentletters,recordedtelephoneconversations,
anddirectfeedbackfromemployeesserveasanexcellenttoolforcommunicatinginternally
whatcustomerswant,andallowemployeesandmanagersatalllevelstolistento
customersfirsthand.Forexample,SingaporeAirlinesprintscomplaintandcompliment
lettersinitsmonthlyemployeemagazine,Outlook.SouthwestAirlinesshowsstaff
videotapesofcustomersprovidingfeedback.Seeingactualcustomersgivingcomments
abouttheirserviceleavesamuchdeeperandlastingimpressiononstaffandencourages
themtoimprovefurther.
Forcomplaints,suggestions,andinquiriestobeusefulasresearchinput,theyhavetobe
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channeledintoacentralcollectionpoint,logged,grouped,andanalyzed. Thatrequiresa
systemforcapturingcustomerfeedbackwhereitismade,andthenreportingittoacentral
unit.
Focus Group Discussions and Service Reviews
Bothtoolsgivegreatspecificinsightsonpotentialserviceimprovementsandideas.Usually,
focusgroupsareorganizedbykeycustomersegmentsorusergroupstofocusontheneeds
oftheseusers.Servicereviewsareindepth,oneononeinterviewsthatareusually
conductedonceayearwithafirmsmostvaluablecustomers(Figure14.7).Usually,a
seniorexecutiveofthefirmvisitsthecustomeranddiscussesissuessuchashowwellthe
firmperformedthepreviousyearandwhatshouldbemaintainedorchanged.Thesenior
executivethengoesbacktotheorganizationanddiscussesthefeedbackwithhisorher
accountmanagers.Boththenwritealetterbacktotheclientdetailinghowthefirmwill
respondtothatcustomersserviceneedsandhowtheaccountwillbemanagedthe
followingyear.
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Figure14.7.ServicereviewsbeingconductedwithanimportantB2B
customer.
ServiceInsights14.1:CustomersasQualityControl
Inspectors?
Mysteryshoppingisagoodmethodforcheckingwhetherfrontlineemployees
displaythedesiredandtrainedbehaviorsandfollowthespecifiedservice
procedures,butdontusecustomersurveysforthis.RonKaufman,founderof
UpYourService!College,describesarecentserviceexperience:
Wehadawonderfulrideinthehotelcarfromtheairport.Thedriverwasso
friendly.Hegaveusacoldtowelandacooldrink.Heofferedachoiceof
music,talkedabouttheweather,andmadesurewewerecomfortablewith
theairconditioning.Hissmileandgoodfeelingswashedoverus,andIliked
it!
Atthehotel,Isignedtheguestregistrationandgavemycreditcard.Then
thecounterstaffaskedmetocompleteanotherform.Itread:
LimousineSurvey
Toconsistentlyensuretheproperapplicationofourqualitystandards,we
valueyourfeedbackonourlimousineservice:
RoomNumber:___________________
LimoNumber:___________________
Date:___________________
Kaufmancontinued:AsIreadtheform,allthegoodfeelingsfellaway.The
driversenthusiasmsuddenlyseemedacharade.Hisconcernforourwell
beingbecamejustachecklistofactionstofollow.Hisgoodmoodwasmerely
anacttomeetthestandard,notaconnectionwithhisguests.Ifeltlikethe
hotelsqualitycontrolinspector,andIdidnotlikeit.Ifthehotelwantsmy
opinion,makemeanadvisor,notaninspector.Askme:Whatdidyouenjoy
mostaboutyourridefromtheairport?(Idtoldthemabouttheirwonderful
driver).Whatelsecouldwedotomakeyourrideevenmoreenjoyable?(Id
haverecommendedofferingtheuseofacellphone).
Source:Copyright2009RonKaufman.Usedwithpermission.
Apartfromprovidinganexcellentlearningopportunity(especiallywhenthereviewsacross
allcustomersarecompiledandanalyzed),servicereviewsfocusonretentionofthemost
valuablecustomersandgethighmarksforservicerecoverypotential.
Analysis, Reporting, and Dissemination of Customer Feedback

Choosingtherelevantfeedbacktoolsandcollectingcustomerfeedbackaremeaninglessif
thecompanyisunabletopasstheinformationtotherelevantpartiestotakeaction.To
drivecontinuousimprovementandlearning,areportingsystemneedstodeliverfeedback
anditsanalysistofrontlinestaff,processowners,branchordepartmentmanagers,andtop
management.
Thefeedbacklooptothefrontlineshouldbeimmediateforcomplaintsandcompliments.In
addition,werecommendthreetypesofserviceperformancereportstoprovidethe
informationnecessaryforservicemanagementandteamlearning:
1)AmonthlyServicePerformanceUpdateprovidesprocessownerswithtimelyfeedback
oncustomercommentsandoperationalprocessperformance.Here,theverbatimfeedback
shouldbeincludedtotheprocessmanagerwhocan,inturn,discussthemwithhisorher
servicedeliveryteams.
2)AquarterlyServicePerformanceReviewprovidesprocessownersandbranchor
departmentmanagerswithtrendsinprocessperformanceandservicequality.
3)AnannualServicePerformanceReportgivestopmanagementarepresentative
assessmentofthestatusandlongtermtrendsrelatingtocustomersatisfactionwiththe
firmsservices.
Thesereportsshouldbeshortandreaderfriendly,focusingonkeyindicatorsandproviding
aneasilyunderstoodcommentaryforthepeopleinchargetoacton.
Hard Measures of Service Quality

LO7
Befamiliarwithhardmeasuresofservicequalityandcontrolcharts.
Havinglearnedaboutthevarioustoolsforcollectingsoftservicequalitymeasures,lets
explorehardmeasuresinmoredetail.Hardmeasurestypicallyrefertooperational
processesoroutcomesandincludesuchdataasuptime,serviceresponsetimes,failure
rates,anddeliverycosts.Inacomplexserviceoperation,multiplemeasuresofservice
qualitywillberecordedatmanydifferentpoints.Inlowcontactservicesinwhichcustomers
arenotdeeplyinvolvedintheservicedeliveryprocess,manyoperationalmeasuresapplyto
backstageactivities.
FedExwasoneofthefirstservicecompaniestounderstandtheneedforafirmwideindex
ofservicequalitythatembracedallthekeyactivitiesthataffectcustomers.Bypublishinga
single,compositeindexonafrequentbasis,seniormanagershopedthatallFedEx
employeeswouldworktowardimprovingquality.Thefirmrecognizedthedangerofusing
percentagesastargets,becausetheymightleadtoselfsatisfaction.Inanorganizationas
largeasFedEx,whichshipsmillionsofpackagesaday,evendelivering99.9%ofpackages
ontime(whichwouldmeanonein1,000packagesisdeliveredlate)orhaving99.999%of
flightsarrivesafelywouldleadtohorrendousproblems.Instead,thecompanydecidedto
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approachqualitymeasurementfromthebaselineofzerofailures(seeServiceInsights14.2).
Howcanweshowperformanceonhardmeasures?Forthis,controlchartsareasimple
methodofdisplayingperformanceonhardmeasuresovertimeagainstspecificquality
standards.Thechartscanbeusedtomonitorandcommunicateindividualvariablesoran
overallindex.Sincetheyarevisual,trendsareeasilyidentified.Figure14.8showsan
airlinesperformanceontheimportanthardstandardofontimedepartures.Thetrends
displayedsuggestthatthisissueneedstobeaddressedbymanagement,asperformanceis
notconsistentandnotverysatisfactory.Ofcourse,controlchartsareonlyasgoodasthe
dataonwhichtheyarebased.
Figure14.8.Acontrolchartfordeparturedelaysshowingpercentageof
flightsdepartingwithin15minutesofschedule.
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ServiceInsights14.2:FedExsApproachtoListeningtothe
VoiceoftheCustomer
Webelievethatservicequalitymustbemathematicallymeasured,declared
FrederickW.Smith,Chairman,President,andCEOofFedExCorporation.
Thecompanyhasacommitmenttoclearqualitygoals,followedupwith
continuousmeasurementofprogressagainstthosegoals.Thispracticeforms
thefoundationforitsapproachtoquality.Asnotedbyoneseniorexecutive:
Itsonlywhenyouexaminethetypesoffailures,thenumberthatoccursof
eachtype,andthereasonswhy,thatyoubegintoimprovethequalityofyour
service.Forus,thetrickwastoexpressqualityfailuresinabsolutenumbers.16
ThatledustodeveloptheServiceQualityIndexorSQI[pronouncedsky].
SinceFedExhadsystematicallycatalogedcustomercomplaints,itwasable
todevelopwhatCEOSmithcallstheHierarchyofHorrors,whichreferredto
theeightmostcommoncomplaintsbycustomers:(1)wrongdaydelivery,(2)
rightday,latedelivery,(3)pickupnotmade(4)lostpackage,(5)customer
misinformed,(6)billingandpaperworkmistakes,(7)employeeperformance
failures,and(8)damagedpackages.Thislistwasthefoundationonwhich
FedExbuilditscustomerfeedbacksystem.
FedExrefinedthelistofhorrorsanddevelopeditsSQI,a12itemmeasure
ofsatisfactionandservicequalityfromthecustomersviewpoint.Theraw
numbersofeacheventaremultipliedbyaweightthathighlightsthe
seriousnessofthateventforcustomers(seeTable14.4).Theresultisapoint
scoreforeachitem.Thepointsarethenaddeduptogeneratethatdays
index.ThetotalSQIandallits12itemsaretrackeddailysothata
continuousindexcanbecomputed.
Table14.4.CompositionofFedExsServiceQualityIndex
(SQI)
ToensureacontinuingfocusoneachseparatecomponentoftheSQI,FedEx
established12QualityActionTeams,oneforeachcomponent.Theteams
hadtounderstandandcorrecttherootcausesunderlyingtheobserved
problems.
InadditiontotheSQI,whichhasbeenmodifiedovertimetoreflectchanges
inprocedures,services,andcustomerpriorities,FedExusesavarietyofother
waystocapturefeedback.
CustomerSatisfactionSurvey.Thistelephonesurveyisconductedona
quarterlybasiswithseveralthousandrandomlyselectedcustomers,stratified
byitskeysegments.Theresultsarerelayedtoseniormanagementona
quarterlybasis.
TargetedCustomerSatisfactionSurvey.Thissurveycoversspecific
customerserviceprocessesandisconductedonasemiannualbasiswith
clientswhohaveexperiencedoneofthespecificFedExprocesseswithinthe
lastthreemonths.
FedExCenterCommentCards.Commentcardsarecollectedfromeach
FedExstorefrontbusinesscenter.Theresultsaretabulatedtwiceayearand
relayedtomanagersinchargeofthecenters.
OnlineCustomerFeedbackSurveys.FedExhascommissionedregular
studiestogetfeedbackforitsonlineservices,suchpackagetracking,aswell
asadhocstudiesonnewproducts.
Theinformationfromthesevariouscustomerfeedbackmeasureshashelped
FedExtomaintainaleadershiproleinitsindustryandplayedanimportant
roleinenablingittoreceivetheprestigiousMalcolmBaldrigeNational
QualityAward.
Sources:BlueprintsforServiceQuality:TheFederalExpress
Approach,AMAManagementBriefing,NewYork:American
ManagementAssociation,1991,5164LindaRosencrance,BetaSphere
deliversFedExsomecustomerfeedback,Computerworld14,no.14
(2000):36MadanBirla,FedexDelivers:HowtheWorldsLeading
ShippingCompanyKeepsInnovatingandOutperformingtheCompetition,
JohnWiley,2005,9192.
Tools to Analyze and Address Service Quality Problems

LO8
Selectsuitabletoolstoanalyzeserviceproblems.
Afterhavingassessedservicequalityusingsoftandhardmeasures,howcanwenowdrill
deepertoidentifycommoncausesofqualityshortfallsandtakecorrectiveactions?Whena
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problemiscausedbycontrollable,internalforces,theresnoexcuseforallowingittorecur.
Afterall,maintainingcustomersgoodwillafteraservicefailuredependsonkeeping
promisesmadetotheeffectthatweretakingstepstoensurethatitdoesnthappen
again!Withpreventionasagoal,letslookbrieflyatsometoolsfordeterminingtheroot
causesofspecificservicequalityproblems.
Root Cause Analysis: The Fishbone Diagram

CauseandeffectanalysisusesatechniquefirstdevelopedbytheJapanesequalityexpert,
KaoruIshikawa.Groupsofmanagersandstaffbrainstormallthepossiblereasonsthat
mightcauseaspecificproblem.Thereasonsarethengroupedintooneoffivegroupings
Equipment,Manpower(orPeople),Material,Procedures,andOtheronacauseandeffect
chart,popularlyknownasafishbonediagrambecauseofitsshape.Thistechniquehasbeen
usedformanyyearsinmanufacturingand,morerecently,alsoinservices.
Toapplythistoolbettertoserviceorganizations,weshowanextendedframeworkthathas
17
eightratherthanfivegroupings(seeFigure14.9). Peoplehasbeenfurtherbrokendown
intoFrontStagePersonnelandBackstagePersonnel.Thishighlightsthefactthatfront
stageserviceproblemsareoftenexperienceddirectlybycustomers,whereasbackstage
failurestendtoshowupmoreindirectlythrougharippleeffect.
Figure14.9.Acauseandeffectchartforflightdeparturedelays.
Inaddition,InformationhasbeenseparatedfromProcedures.Thisrecognizesthefact
thatmanyserviceproblemsresultfrominformationfailures.Forexample,thesefailures
areoftenbecausefrontstagepersonneldonothavetherequiredinformationattheir
fingertipsordonottellcustomerswhattodoandwhentodoit.
Customerswereaddedasafurthersourceofrootcauses.Inmanufacturing,customersdo
notreallyaffectthedaytodayoperationalprocesses.However,inahighcontactservice,
theyareinvolvedinfrontstageoperations.Iftheydontplaytheirownpartscorrectly,
theymayreduceserviceproductivityandcausequalityproblemsforthemselvesandother
customers.Forinstance,anaircraftcanbedelayedifapassengertriestoboardatthelast
minutewithanoversizedsuitcasewhichthenhastobeloadedintothecargohold.Figure
18
14.9,displays27possiblereasonsforlatedeparturesofpassengeraircraft.
Onceallthemainpossiblecausesforflightdelayshavebeenidentified,itisnecessarytosee
howmuchimpacteachcausehasonactualdelays.Thiscanbeestablishedusingfrequency
countsincombinationwithParetoanalysis,whichisdiscussednext.
Pareto Analysis
ParetoAnalysis(sonamedaftertheItalianeconomistwhofirstdevelopedit)identifiesthe
maincausesofobservedoutcomes.Thistypeofanalysisoftenrevealsthataround80%of
thevalueofonevariable(inthisinstance,numberofservicefailures)iscausedbyonly20%
ofthecausalvariables(i.e.,numberofpossiblecausesasidentifiedbythefishbone
diagram).
Intheairlineexample,findingsshowedthat88%ofthecompanyslatedepartingflights
fromtheairportsitservedwerecausedbyonlyfour(15%)ofallthepossiblefactors.Infact,
morethanhalfthedelayswerecausedbyasinglefactor:acceptanceoflatepassengers(i.e.,
situationswhenthestaffheldaflightforonemorepassengerwhowascheckinginafterthe
officialcutofftime).
Onsuchoccasions,theairlinemadeafriendofthepassengerwhowaslate,butrisked
frustratingalltheotherpassengerswhowerealreadyonboard,waitingfortheaircraftto
depart.Othermajordelaysincludedwaitingforpushback(avehiclemustarrivetopullthe
aircraftawayfromthegate),waitingforfueling,anddelaysinsigningtheweightand
balancesheet(asafetyrequirementrelatingtothedistributionoftheaircraftsloadthat
thecaptainmustfollowoneachflight).Furtheranalysis,however,showedthatthereasons
areslightlydifferentfromoneairporttoanother(seeFigure14.10).
Figure14.10.Analysisofcausesofflightdeparturedelays.
BycombiningthefishbonediagramandParetoanalysis,wecanidentifythemaincausesof
servicefailure.
BlueprintingA Powerful Tool for Identifying Fail Points

FishbonediagramsandParetoanalysestellusthecausesandimportanceofquality
problems.Blueprintsallowustodrilldownfurthertoidentifywhereexactlyinaservice
processtheproblemwascaused.AsdescribedinChapter8,awellconstructedblueprint
enablesustoseetheprocessofservicedeliverybyshowingthesequenceoffrontstage
interactionsthatcustomersexperienceastheyencounterserviceproviders,facilities,and
equipment,togetherwithsupportingbackstageactivities,whicharehiddenfromthe
customersandarenotpartoftheirserviceexperience.
Blueprintscanbeusedtoidentifythepotentialfailpointswherefailuresaremostlikelyto
occur,andtheyhelpustounderstandhowfailuresatonepoint(suchasincorrectentryofan
appointmentdate)mayaffectthelaterstagesoftheprocess(thecustomerarrivesatthe
doctorsofficeandistoldthedoctorisunavailable).Byaddingfrequencycountstothefail
pointsinablueprint,managerscanidentifythespecifictypesoffailuresthatoccurmost
frequentlyandthusneedurgentattention.Knowingwhatcangowrongandwhere,isan
importantfirststepinpreventingservicequalityproblems.(SeeChapter8foramore
detaileddiscussionofblueprintsandhowtheycanbeusedtodesignandredesigncustomer
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serviceprocesses.)
Return on Quality
Wenowunderstandhowtodrilldowntospecificqualityproblems,andwecanusewhatwe
havelearnedfromChapter8onhowtodesignandredesignimprovedserviceprocesses.
However,thepictureisincompletewithoutunderstandingthefinancialimplicationsrelated
toqualityimprovements.Manyfirmspayalotofattentiononimprovingservicequality
andquiteafewofthemhavebeendisappointedbytheresults.Evenfirmsrecognizedfor
servicequalityeffortshavesometimesrunintofinancialdifficulties.Thisispartlybecause
theyspenttoomuchonqualityimprovementsthatcustomersdonotvalueordonoteven
recognize.Inotherinstances,suchresultsshowpoororincompleteexecutionofthequality
programitself.
LO9
Appreciatethefinancialimplicationsofqualityimprovements.
Assess Costs and Benefits of Quality Initiatives

RolandRust,AnthonyZahonik,andTimothyKeininghamargueforaReturnonQuality
(ROQ)approachtoassessthecostsandbenefitsofqualityinitiatives.Thisisbasedonthe
assumptionsthat(1)qualityisaninvestment,(2)qualityeffortsmustmakesense
financially,(3)itispossibletospendtoomuchonquality,and(4)notallquality
19
expendituresareequallyjustified. Hence,expendituresonqualityimprovementmustbe
relatedtoexpectedincreasesinprofitability.AnimportantimplicationoftheROQ
perspectiveisthatqualityimprovementeffortsmaybenefitfrombeingcoordinatedwith
productivityimprovementprograms.
Toseeifnewqualityimprovementeffortsmakesense,itscostsmustbeworkedout
beforehand.Firmsalsohavetopredicthowcustomerswillrespondtotheimprovement
efforts.Willtheprogramallowthefirmtoattractmorecustomers(e.g.,throughwordof
mouthofcurrentcustomers),increaseshareofwallet,and/ortoreducedefections?Ifso,
howmuchadditionalnetincomewillbegenerated?
Withgooddocumentation,itissometimespossibleforafirmthatoperatesinanumberof
locationstoexaminepastexperienceandjudgethestrengthofarelationshipbetween
specificservicequalityimprovementsandrevenues(seeServiceInsights14.3).
Determine the Optimal Level of Reliability

Howfarshouldwegoinimprovingservicereliability?Acompanywithpoorservicequality
canoftenachievebigjumpsinreliabilitywithrelativelymodestinvestmentsin
improvements.AsillustratedinFigure14.11,initialinvestmentsinreducingservicefailure
oftenbringdramaticresults.However,atsomepoint,diminishingreturnssetinasfurther
improvementsrequireincreasinglevelsofinvestment,evenbecomingprohibitively
expensive.Whatlevelofreliabilityshouldwetarget?
Figure14.11.Whendoesimprovingservicereliabilitybecome
uneconomical?
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ServiceInsights14.3:QualityofFacilitiesandRoom
RevenuesatHolidayInn
Tofindouttherelationshipbetweenproductqualityandfinancial
performanceinahotelcontext,SherylKimesanalyzedthreeyearsofquality
andoperationalperformancedatafrom1,135franchisedHolidayInnhotels
intheUnitedStatesandCanada.
Indicatorsofproductqualitycamefromthefranchisorsqualityassurance
reports.Thesereportswerebasedonunannounced,semiannualinspections
bytrainedqualityauditorswhowererotatedamongdifferentregionsand
whoinspectedandrateddifferentqualitydimensionsofeachhotel.Sheryl
Kimesused12ofthesequalitydimensionsinherstudy:tworelatingtothe
guestrooms(bedroomandbathroom)and10relatingtocommercialareas
(e.g.,exterior,lobby,publicrestrooms,diningfacilities,loungefacilities,
corridors,meetingarea,recreationarea,kitchen,backofhouse).Eachquality
dimensionsusuallyincluded1012individualitemsthatcouldbepassedor
failed.Theinspectornotedthenumberofdefectsforeachdimensionandthe
totalnumberfortheentirehotel.
HolidayInnWorldwidealsoprovideddataonrevenueperavailableroom
(RevPAR)ateachhotel.Toadjustfordifferencesinlocalconditions,Kimes
analyzedsalesandrevenuestatisticsobtainedfromthousandsofUSand
CanadianhotelsandreportedinthemonthlySmithTravelAccommodation
Reports(awidelyusedserviceinthetravelindustry).Thisdataenabled
KimestocalculatetheRevPARfortheimmediatemidscalecompetitorsof
eachHolidayInnhotel.TheresultswerethenusedtomaketheRevPARs
comparableacrossallHolidayInnsinthesample.Theaveragedailyroom
rateatthetimewasabout$50.
Forthepurposesoftheresearch,ifahotelhadfailedatleastoneiteminan
area,itwasconsidereddefectiveinthatarea.Thefindingsshowedthatas
thenumberofdefectsinahotelincreased,theRevPARdecreased.Quality
dimensionsthatshowedquiteastrongimpactonRevPARweretheexterior,
theguestroom,andtheguestbathroom.Evenasingledefectresultedina
statisticallysignificantreductioninRevPAR.However,thecombinationof
defectsinallthreeareasshowedanevenlargereffectonRevPARovertime.
Kimescalculatedthattheaverageannualrevenueimpactonadefective
hotelwasarevenuelossof$204,400comparedtoanondefectivehotel.
UsingaReturnonQualityperspective,theresultsshowedthatthemainfocus
ofincreasedexpendituresonhousekeepingandpreventivemaintenance
shouldbethehotelexterior,theguestrooms,andbathrooms.
Source:SherylE.Kimes,Therelationshipbetweenproductqualityand
RevenueperAvailableRoomatHolidayInn,JournalofService
Research2,(November1999):138144.
Typically,thecostofservicerecoveryislowerthanthecostofanunhappycustomer.This
suggeststhatservicefirmsshouldincreasereliabilityuptothepointthattheincremental
improvementequalsthecostofservicerecoveryorthecostoffailure.Althoughthis
strategyresultsinaservicethatislessthan100%failurefree,thefirmcanstillaimto
satisfy100%ofitstargetcustomersbyensuringthateithertheyreceivetheserviceas
plannedor,ifafailureoccurs,theyobtainasatisfyingservicerecovery(seeChapter13).
LO10
Defineandmeasureserviceproductivity.
Defining and Measuring Productivity

Wehavehighlightedintheintroductionofthischapterthatweneedtolookatqualityand
productivityimprovementstrategiestogetherratherthaninisolation.Afirmneedsto
ensurethatitcandeliverqualityexperiencesmoreefficientlytoimproveitslongterm
profitability.Letusfirstdiscusswhatproductivityisandhowitcanbemeasured.
Defining Productivity in a Service Context

Simplydefined,productivitymeasurestheamountofoutputproducedrelativetothe
amountofinputsused.Hence,improvementsinproductivityarereflectedbyanincreasein
theratioofoutputstoinputs.Animprovementinthisratiomightbeachievedbycutting
theresourcesrequiredtocreateagivenvolumeofoutputorbyincreasingtheoutput
obtainedfromagivenlevelofinputs.
Whatdowemeanbyinputinaservicecontext?Inputvariesaccordingtothenatureof
thebusiness.Itmayincludelabor(bothphysicalandintellectual),materials,energy,and
capital(consistingofland,buildings,equipment,informationsystems,andfinancialassets)
(Figure14.12).
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Figure14.12.CompanieslikeRicohsupplyequipmentandservicesto
increasetheircustomersproductivity.
Measuring Productivity
Measuringproductivityisdifficultinserviceswhentheoutputisdifficulttodefine.Ina
peopleprocessingservice,suchasahospital,wecanlookatthenumberofpatientstreated
overayearandthehospitalsaveragebedoccupancy.However,howdowetakeinto
accountthedifferenttypesofmedicalactivitiesperformed,suchasremovalofcancerous
tumors,treatmentofdiabetes,orsettingofbrokenbones?Whataboutdifferencesbetween
patients?Howdowejudgethedifferenceinoutcomes?Somepatientsgetbetter,some
developcomplications,and,sadly,someevendie.
Themeasurementtaskisperhapssimplerinpossessionprocessingservices,sincemanyare
likemanufacturingorganizationsandperformroutinetaskswitheasilymeasurableinputs
andoutputs.Examplesincludegaragesthatchangeacarsoilandrotateitstires,orfast
foodrestaurantsthatofferlimitedandsimplemenus.However,thetaskgetsmore
complicatedwhenthegaragemechanichastofindandrepairawaterleak,orwhenweare
dealingwithaFrenchrestaurantknownforitsvariedandexceptionalcuisine.Whatabout
informationbasedservices?Howshouldwedefinetheoutputofaninvestmentbankora
consultingfirm?
Service Productivity, Efficiency, and Effectiveness

LO11
Understandthedifferencebetweenproductivity,efficiency,andeffectiveness.
Whenwelookattheissueofproductivity,weneedtodifferentiateproductivity,efficiency,
20
andeffectiveness. Productivityreferstotheoutputthatonecangetfromacertainamount
ofinputs.Themoreoutputonecangetfromthegivenamountofinputs,thehigherthe
productivity.Efficiencyinvolvescomparisontoastandardthatisusuallytimebased.For
example,howlongdoesittakeforanemployeetoperformaparticulartaskcomparedtoa
setstandard?Thefasterthetaskcanbecompleted,thehighertheefficiency.Effectiveness
canbedefinedasthedegreetowhichanorganizationismeetingitsgoalsanddesired
outcomes,whichwouldtypicallyincludecustomersatisfaction(Figure4.13).
Figure14.13.Productivityforthefirmmayresultincustomerfrustration
whentheycannottalktoservicepersonnel.
Classicaltechniquesofproductivitymeasurementfocusonoutputsandbenchmarking,
ratherthanoutcomes.Thismeansthatproductivityandefficiencyarestressed,but
effectivenessisneglected.Infreighttransport,forinstance,atonmileofoutputforfreight
thatisdeliveredlateistreatedthesameforproductivitypurposesasasimilarshipment
deliveredontime.Similarly,supposeahairdresserusuallyservesthreecustomersperhour.
However,shecanincreaseheroutputtooneevery15minutesbyreducingconversation
withthecustomerandbyrushinghercustomers.Evenifthehaircutitselfisjustasgood,
thedeliveryprocessmaybeperceivedasfunctionallyinferior,leadingcustomerstoratethe
overallserviceexperiencelesspositively(Figure14.14).Inthisexample,productivityand
efficiencyhavebeenachieved,butnoteffectiveness.
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Figure14.14.Acounselorneedstotakehistimeinasessionsothat
patientscangaingreatersatisfactionfromtheirgrouptherapy.
Inthelongrun,organizationsthataremoreeffectiveinconsistentlydeliveringoutcomes
desiredbycustomersshouldbeabletocommandhigherpricesfortheiroutput.Therefore,
thereisaneedtostresseffectivenessandoutcomes(includingqualityandvaluegenerated
forcustomers)inadditiontoproductivityandefficiency.
Improving Service Productivity

Intensivecompetitioninmanyservicesectorspushesfirmstocontinuallyseekwaysto
21
improvetheirproductivity. Thissectiondiscussesvariouspossibleapproachestoand
sourcesofproductivitygains.
LO12
Recommendthekeymethodstoimproveserviceproductivity.
Generic Productivity Improvement Strategies

Traditionally,operationsmanagershavebeeninchargeofimprovingserviceproductivity.
Theyusuallytakethefollowingactions:
Carefullycontrollingcostsateverystepintheprocess.
Reducingwasteofmaterialsandlabor.
Trainingemployeestoworkmoreproductively(fasterisnotnecessarilybetterifitleads
tomistakesorunsatisfactoryworkthathastoberedone).
Providingemployeeswithequipmentanddatabasesthatenablethemtoworkfaster
and/ortoahigherlevelofquality.
Broadeningthevarietyoftasksthataserviceworkercanperform(whichmayrequire
revisedlaboragreements)soastogetridofbottlenecksandwastefuldowntimeby
allowingmanagerstodeployworkerswherevertheyareneededmost.
Installingexpertsystemsthatallowparaprofessionalstotakeonworkpreviously
performedbymoreexperiencedindividualsearninghighersalaries.
Althoughimprovingproductivitycanbeapproachedinsmallsteps,majorgainsoften
requireredesigningcustomerserviceprocesses.Forexample,itstimeforserviceprocess
redesignwhencustomersfaceunbearablylongwaittimes,ashappensofteninhealthcare
(Figure14.15).WediscussedserviceprocessredesignindepthinChapter8.
Figure14.15.Longwaitingtimesoftenindicateaneedforserviceprocess
redesign.
Customer-Driven Approaches to Improve Productivity

Insituationswherecustomersaredeeplyinvolvedintheserviceproductionprocess,
operationsmanagersshouldalsobeexamininghowcustomerinputscanbemademore
productive.Marketingmanagersshouldbethinkingaboutwhatmarketingstrategies
shouldbeusedtoinfluencecustomerstobehaveinmoreproductiveways.Someofthese
strategiesinclude:
Changethetimingofcustomerdemand.Byencouragingcustomerstouseaservice
outsidepeakperiodsandofferingthemincentivestodoso,managerscanmakebetteruse
oftheirproductiveassetsandprovidebetterservice.Theissuesthatrelatetomanaging
demandincapacityconstrainedservicebusinessesarediscussedindetailinChapter9
revenuemanagementstrategiesareexploredinChapter6.
Encourageuseoflowercostservicedeliverychannelsandselfservice.Shifting
deliverytomorecosteffectiveservicedeliverychannels,suchastheInternetorselfservice
machines,improvesproductivity.Italsohelpsindemandmanagementbyreducingthe
pressureonemployeesandcertaintypesofphysicalfacilitiesatpeakhours.Many
technologicalinnovationsaredesignedtogetcustomerstoperformtaskspreviously
undertakenbyserviceemployees(Figure14.16).Theissuesrelatedtocustomersplayinga
moreactiveroleascoproducersoftheservicearediscussedindetailinthecontextof
serviceprocessdesigninChapter8.
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Figure14.16.Selfservicepumpswithcreditcardreadershaveincreased
gasstationproductivity.
Askcustomerstousethirdparties.Insomeinstances,managersmaybeableto
improveserviceproductivitybyusingthirdparties.Specialistintermediariesmayenjoy
economiesofscale,allowingthemtoperformthetaskmorecheaplythanthecoreservice
provider.Thisallowstheserviceprovidertofocusonqualityandproductivityinitsown
areaofexpertise.Anexampleofanintermediaryisatravelagency.Wediscussedtheuseof
intermediariesindetailinChapter5inthecontextofdistribution.
LO13
Knowhowproductivityimprovementsimpactqualityandvalue.
How Productivity Improvements Impact Quality and Value

Managersshouldseeproductivityimprovementsasbusinessprocessesusedtotransform
resourceinputsintotheoutcomesdesiredbycustomers.Thisisespeciallysoforprocesses
thatnotonlycrossdepartmentalandsometimesgeographicboundaries,butalsothosethat
linkthebackstageandfrontstageareasoftheserviceoperation.Hence,asfirmsmake
productivityimprovements,theyneedtoexaminetheimpactonthecustomerexperience.
Front-Stage Efforts to Improve Productivity
Inhighcontactservices,manyproductivityimprovementsarequitevisible.Somechanges
simplyrequireacceptancebycustomers,whileothersrequirecustomerstohavenew
patternsofbehaviorintheirdealingswiththeorganization.Ifalotofchangesare
suggested,thenitmakessensetoconductmarketresearchfirsttodeterminehow
customersmayrespond.Failuretoconsidertheeffectsoncustomersmayresultinalossof
businessandcanceloutanticipatedproductivitygains.(ReferbacktoChapter8onhowto
manageandovercomecustomersreluctancetochangeinserviceprocesses.)
How Backstage Changes May Impact Customers
Themarketingimplicationsofbackstagechangesdependonwhethertheyaffectorare
noticedbycustomers.Ifairlinemechanicsdevelopaprocedureforservicingjetengines
morequicklywithoutincurringincreasedwageratesormaterialcosts,theairlinehas
obtainedaproductivityimprovementthathasnoimpactonthecustomersservice
experience.
Otherbackstagechanges,however,mayextendfrontstageandaffectcustomers.
Marketersshouldbeupdatedonproposedbackstagechangestopreparecustomersfor
them.Atabank,forinstance,thedecisiontoinstallnewcomputersandprintersmaybe
duetoplanstoimproveinternalqualitycontrolsandreducethecostofpreparingmonthly
statements.However,thisnewequipmentmaychangetheappearanceofbankstatements
andthetimeofthemonthwhentheyareposted.Ifcustomersarelikelytonoticesuch
changes,anexplanationmaybeneeded.Ifthenewstatementsareeasiertoreadand
understand,thechangemaybeworthpromotingasaserviceimprovement.
A Caution on Cost-Reduction Strategies
Serviceproductivityimprovementsusuallyfocusongettingridofwasteandreducinglabor
costsifitdoesnotinvolvenewtechnology.Reducingfrontstagestaffingeithermeansthat
theremainingemployeeshavetoworkharderandfasterorthattherearenotenough
personneltoservecustomersfastatbusytimes.Althoughemployeesmaybeabletowork
fasterforashortperiodoftime,fewcandothatforlongperiods.Theybecometired,make
mistakes,andtreatcustomersinacoldmanner.Workerswhoaretryingtodotwoorthree
thingsatthesametimemaydoapoorjobofeachtask.Toomuchstressleadsto
dissatisfactionandfrustration.Abetterwayistosearchforserviceprocessredesign
opportunitiesthatleadtogreatimprovementsinproductivityandatthesametime
increaseservicequality.Biometricsissettobecomeanewtechnologythatmayallowboth
(seeServiceInsights14.4).
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ServiceInsights14.4:BiometricsTheNextFrontierin
DrivingProductivityandServiceQuality?
Intensecompetitivepressuresandextremelylowmarginsinserviceindustries
donotallowfirmstoincreasecoststoimprovequality.Rather,thetrickisto
alwayslookforwaystoachievegreatimprovementsinservicequalityand
efficiencyatthesametime.ThisissomethingWirtzandHeracleoustermed
costeffectiveserviceexcellence.TheInternethas,inthepast,allowedmany
firmstodojustthat.Ithaschangedindustriesincludingfinancialservices,
bookandmusicretailing,andtravelagencies.Biometricsmaybethenext
majortechnologydrivingfurtherserviceandproductivityimprovementsinthe
servicesector.
Biometricsistheidentificationofindividualsbasedonaphysical
characteristicortrait.Physicalcharacteristicsincludefingerprints,facial
recognition,handgeometry,andthestructureoftheiris.Traitsinclude
signatureformation,keystrokepatternsandvoicerecognition.Biometrics,as
somethingyouare,isbothmoreconvenientandsaferthansomethingyou
know(passwordsorpiecesofpersonalinformation)orsomethingyouhave
(cardkeys,smartcards,ortokens).Thereisnoriskofforgetting,losing,
copying,loaning,orgettingyourbiometricsstolen(Figure14.17).
Figure14.17.Customerscannotforgetorlosetheirbiometrics!
Applicationsofbiometricsrangefromcontrollingaccesstoservicefacilities
(usedbyDisneyWorldtoprovideaccesstoseasonpassholders),voice
recognitionatcallcenters(usedbytheHomeShoppingNetworkandCharles
Schwabtoenablefastandhasslefreeclientauthentication),selfservice
accesstosafedepositvaultsatbanks(usedbytheBankofHawaiiandFirst
TennesseeBank),andcashingchecksinsupermarkets(usedbyKroger,Food
4Less,andBILO).
Biometricsarecurrentlyinuseinvariousindustries.Inthehealthcare
industry,theyareusedtoprotectthemedicalrecordsofpatients.Inthe
financeindustry,biometricsareusedforauthenticationfortransactions.
Schoolsuseitforlibrarybookissue,orfordebitofcateringaccountsbased
onthechildsfingerscan.Theuseofbiometricswillbecomeincreasingmore
prevalent.
Sources:JochenWirtzandLoizosHeracleous,BiometricsMeets
Services,HarvardBusinessReview,February2005,4849Loizos
HeracleousandJochenWirtz,BiometricsTheNextFrontierinService
Excellence,ProductivityandSecurityintheServiceSector,Managing
ServiceQuality16,no.1(2006):CatherineJTilton,TheRoleof
BiometricsinEnterpriseSecurity,DellPowerSolutions,2006,
www.dell.com/powersolutions (http://www.dell.com/powersolutions)
http://en.wikipedia.org/wiki/Biometrics_in_schools
(http://en.wikipedia.org/wiki/Biometrics_in_schools) ,accessedMarch12,2012.
Chapter Summary
LO1Qualityandproductivityaretwinpathsforcreatingvalueforcustomersand
thefirm.Qualityfocusesonthebenefitscreatedforcustomers,andproductivityaffectsthe
financialcoststothefirm.
LO2Customersperceivedservicequalityconsistsoffivemaindimensions:(1)
tangibles,(2)reliability,(3)responsiveness,(4)assurance,and(5)empathy.
LO3Thegapsmodelisanimportanttooltodiagnoseandaddressservicequality
problems.Weidentifiedsixgapsthatcanbethecauseofqualityshortfalls:
Gap1theknowledgegap.
Gap2thepolicygap.
Gap3thedeliverygap.
Gap4thecommunicationsgap.
Gap5theperceptionsgap.
Gap6theservicequalitygap.Itisthemostimportantgap.InordertocloseGap6,the
otherfivegapshavetobeclosedfirst.
Wesummarizedaseriesofpotentialcausesforeachofthegapsandprovidedgeneric
prescriptionsforaddressingthecausesandtherebyclosingthegaps.
LO4Therearebothsoftandhardmeasuresofservicequality.Softmeasuresare
usuallybasedonperceptionsofandfeedbackfromcustomersandemployees.Hard
measuresrelatetoprocessesandtheiroutcomes.
LO5Feedbackfromcustomers(i.e.,mostlysoftmeasures)shouldbe
systematicallycollectedviaacustomerfeedbacksystem(CFS).ThekeyobjectivesofaCFS
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are:
Assessmentandbenchmarkingofservicequalityandperformance.
Customerdrivenlearningandimprovement.
Creatingacustomerorientedserviceculture.
LO6Firmscanuseavarietyoftoolstocollectcustomerfeedback,including(1)
totalmarketsurveys,(2)annualsurveysonoverallsatisfaction,(3)transactionalsurveys,
(4)servicefeedbackcards,(5)mysteryshopping,(6)unsolicitedcustomerfeedback(e.g.,
complimentsandcomplaints),(7)focusgroupdiscussions,and(8)servicereviews.
Areportingsystemisneededtochannelfeedbackanditsanalysistotherelevantparties
totakeaction.
LO7Hardmeasuresrelatetooperationalprocessesandoutcomesandcanbe
counted,timed,orobserved.Controlchartsareasimplemethodofdisplayingperformance
onhardmeasuresovertimeagainstspecificqualitystandards.
LO8Keytoolstoanalyzeandaddressimportantservicequalityproblemsare:
Fishbonediagramstoidentifythecausesofqualityproblems.
Paretoanalysistoassessthefrequencyofqualityproblemsandidentifythemostcommon
causes.
Blueprintingtoexactlydeterminethelocationoffailpointsinacustomerserviceprocess
andthenhelptoredesigntheprocess.
LO9Therearefinancialimplicationsofservicequalityimprovements.Areturn
onquality(ROQ)approachassessesthecostsandbenefitsofspecificqualityinitiatives.
LO10Besidesquality,productivityisanotherimportantpathtoincreasevalue.
LO11Itisimportanttodifferentiatethesethreeconcepts:
Productivityinvolvestheamountofoutputsbasedonagivenlevelofinputs(e.g.
input/outputratio).
Efficiencyinvolvesisusuallytimebasedandcomparedtoastandardsuchasindustry
average(e.g.speedofdelivery).
Effectivenessreferstothedegreeagoal,suchascustomersatisfaction,ismet.
Productivityandefficiencycannotbeseparatedfromeffectiveness.Firmsthatstrivetobe
moreproductive,efficient,andeffectiveinconsistentlydeliveringcustomersatisfactionwill
bemoresuccessful.
LO12Genericmethodstoimproveproductivityinclude(1)costcontrol(2)
reductionofwasteofmaterialsandlabor(3)trainingemployeestoworkmore
productively(4)providingemployeeswithequipmentandinformationthatwillenable
themtoworkfasterandbetter(5)broadeningthejobscopeofemployeestoreduce
bottlenecksanddowntime(6)usingexpertsystemssothatparaprofessionalscandothe
workpreviouslydonebyhigherpaidexperts.
Customerdrivenmethodstoimproveproductivityinclude(1)changingthetimingof
customerdemandtobettermatchcapacitytodemand(2)encouragingtheuseoflower
costservicedeliverychannelsandreplacinglaborwithmachinesandSSTsand(3)getting
customerstousethirdpartiesforpartsoftheservicedelivery.
LO13Whenimprovementsaremadetoproductivity,firmsneedtobearinmind
thatbothfrontstageandbackstageimprovementscanhaveanimpactonservicequality
andthecustomerexperience.
LO14TQM,ISO9000,MalcolmBaldrigeApproach,andSixSigmaare
systematicandoftencomplementaryapproachestomanagingandimprovingservice
qualityandproductivity.
Unlock Your Learning
ThesekeywordsarefoundwithinthesectionsofeachLearningObjective(LO).Theyare
integraltounderstandingtheservicesmarketingconceptstaughtineachsection.Havinga
firmgraspofthesekeywordsandhowtheyareusedisessentialtohelpingyoudowellon
yourcourse,andintherealandverycompetitivemarketingsceneoutthere.
LO11Intangible
2Productivity
3Servicequality
LO24Access
5Assurance
6Communication
7Competence
8Courtesy
9Credibility
10Empathy
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11Reliability
12Responsiveness
13Security
14Tangibles
LO315Closethegaps
16Communicationsgap
17Deliverygap
18Knowledgegap
19Perceptionsgap
20Policygap
21Servicegap
LO422Hardmeasures
23Hardstandards
24Softmeasures
25Softstandards
LO526Assessment
27Benchmarking
28Customerfeedbacksystems
29Customerdrivenimprovements
30Customerdrivenlearning
31Customerorientedserviceculture
LO632Annualsurveys
33Customerfeedbackcollectiontools
34Feedbackloop
35Focusgroupdiscussion
36Mysteryshopping
37Servicefeedbackcards
38Serviceperformancereport
39Serviceperformancereview
40Serviceperformanceupdate
41Servicereviews
42Totalmarketsurveys
43Transactionalsurveys
44Unsolicitedcustomerfeedback
LO745Hardmeasures
46Operationalprocesses
47Servicequality
48Servicequalityindex(SQI)
LO849Blueprinting
50Causeandeffectanalysis
51Fishbonediagram
52Paretoanalysis
53Returnonquality
54Rootcauseanalysis
55Servicequalityproblems
LO956Assessbenefits
57Assesscosts
58Qualityimprovement
59Qualityinitiatives
60Returnonquality
61Servicereliability
LO1062Definingproductivity
63Input
64Measuringproductivity
65Peopleprocessingservices
66Possessionprocessingservices
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LO1167Effectiveness
68Efficiency
69Financialvalue
70Productivity
71Timebased
LO1272Customerdemand
73Customerdrivenapproaches
74Productivityimprovementstrategies
75Selfservice
76Servicedeliverychannels
77Serviceprocessredesign
LO1378Backstage
79Biometrics
80Costreductionstrategies
81Frontstage
82Serviceproductivityimprovements
APPENDICES83SERVQUAL
84DMAIC
85ISO9000
86MalcolmBaldrigeModel
87SixSigma
88TotalQualityManagement
Howwelldoyouknowthelanguageofservicesmarketing?Quizyourself!
Notfortheacademicallyfaintofheart
Foreachkeywordyouareabletorecallwithoutreferringtoearlierpages,give
yourselfapoint(andapatontheback).Tallyyourscoreattheendandseeifyou
earnedtherighttobecalledaservicesmarketeer.
Score
018ServicesMarketingisdoneagreatdisservice.
1934Themidnightoilneedstobelit,pronto.
3550Iknowwhatyoudidntdoallsemester.
5166ByGeorge!Youregettingthere.
6783Now,goforthandmarket.
8488Thereshouldbeamarketingconceptnamedafteryou.
KnowYourESM
ReviewQuestions
1.Explaintherelationshipsbetweenservicequality,productivity,and
profitability.
2.Identifythegapsthatcanoccurinservicequality,andthestepsthatservice
marketerscantaketopreventthem.
3.Whyarebothsoftandhardmeasuresofservicequalityneeded?
4.Whatarethemainobjectivesofaneffectivecustomerfeedbacksystem?
5.Whatarethekeycustomerfeedbackcollectiontools?Whatarethe
strengthsandweaknessesofeachofthesetools?
6.Whatarethemaintoolsservicefirmscanusetoanalyzeandaddress
servicequalityproblems?
7.Whyisproductivitymoredifficulttomeasureinservicethanin
manufacturingfirms?
8.Whatarethekeytoolsforimprovingserviceproductivity?
9.HowdoconceptssuchasTQM,ISO9000,MalcolmBaldrigeApproach,
andSixSigmarelatetomanagingandimprovingservicequalityand
productivity?(RefertoAppendix14.3.)
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WorkYourESM
ApplicationExercises
1.Reviewthefivedimensionsofservicequality.Whatdotheymeaninthe
contextof(a)anindustrialrepairshop,(b)aretailbank,(c)aBig4
accountingfirm?
2.Howwouldyoudefineexcellentservicequalityforaninquiry/information
serviceprovidedbyyourcableorelectricitycompany?Callaservice
organization,gothroughaserviceexperience,andevaluateitagainstyour
definitionofexcellence.
3.Collectafewcustomerfeedbackformsandtools(customerfeedbackcards,
questionnaires,andonlineforms),andexplainhowtheinformationgathered
withthosetoolscanbeusedtoachievethemainobjectivesofeffective
customerfeedbacksystems.
4.Consideryourownrecentexperiencesasaserviceconsumer.Onwhich
dimensionsofservicequalityhaveyoumostoftenexperiencedalargegap
betweenyourexpectationsandyourperceptionsoftheserviceperformance?
Whatdoyouthinktheunderlyingcausesmightbe?Whatstepsshould
managementtaketoimprovequality?
5.Inwhatwayscanyou,asaconsumer,helptoimproveproductivityforat
leastthreeserviceorganizationsthatyoupatronize?Whatdistinctive
characteristicsofeachservicemakesomeoftheseactionspossible?
6.Doaliteraturesearch,andidentifythecriticalfactorsforasuccessful
implementationofISO9000,theMalcolmBaldrigeModel,andSixSigma
inservicefirms.(RefertoAppendix14.3).
Appendix 14.1. Measuring Service Quality Using Servqual

Tomeasurecustomersatisfactionwithvariousaspectsofservicequality,ValarieZeithaml
22
andhercolleaguesdevelopedasurveyinstrumentcalledSERVQUAL. Itsbasedonthe
premisethatcustomerscanevaluateafirmsservicequalitybycomparingtheirperceptions
ofitsservicewiththeirownexpectations.SERVQUALisseenasagenericmeasurement
toolthatcanbeappliedacrossabroadspectrumofserviceindustries.
Initsbasicform,thescalecontains21perceptionitemsandaseriesofexpectationitems,
reflectingthefivedimensionsofservicequalitydescribedinTable14.5.Respondents
completeaseriesofscalesthatmeasuretheirexpectationsofcompaniesinaparticular
industryonawidearrayofspecificservicecharacteristics.Subsequently,theyareaskedto
recordtheirperceptionsofaspecificcompanywhoseservicestheyhaveused.When
perceivedperformanceratingsarelowerthanexpectations,thisisasignofpoorquality.
Thereverseindicatesgoodquality.
Table14.5.TheSERVQUALscale
Source:AdaptedfromParasuraman,A.,Zeithaml,V.A.,andBerry,L.
SERVQUAL:AMultipleItemScaleforMeasuringConsumerPerceptionsof
ServiceQuality,JournalofRetailing64,(1988):1240.
Limitations of SERVQUAL
23
SERVQUALiswidelyused,butthereareanumberoflimitationsofthismeasure.
Therefore,themajorityofresearchersusingSERVQUALomitsfrom,addsto,orchanges
thelistofstatementspurportingtomeasureservicequality.Otherresearchsuggeststhat
SERVQUALmainlymeasurestwofactors:intrinsicservicequality(resemblingwhat
Grnroostermedfunctionalquality)andextrinsicservicequality(whichreferstothe
tangibleaspectsofservicedeliveryandresemblestowhatGrnroosreferredtoastechnical
24
quality).
ThesedifferentfindingsdontunderminethevalueofZeithaml,Berry,andParasuramans
achievementinidentifyingsomeofthekeyunderlyingconstructsinservicequality.Rather,
theyhighlightthedifficultyofmeasuringcustomerperceptionsofqualityandtheneedto
customizedimensionsandmeasurestotheresearchcontext.
Appendix 14.2. Measuring Service Quality in Online Environments

SERVQUALwasdevelopedtomeasureservicequalitymostlyinafacetofaceservice
encountercontext.However,intodaysonlineenvironment,differentservicequality
dimensionswithnewmeasurementitemsbecomerelevant(Figure14.18).
Figure14.18Whencommitmentandconstantimprovementmeetheadon
thechallengeofchangingmarkets,technologiesandenvironments,success
becomesaclearerpicture.
Tomeasureelectronicservicequalityonwebsites,Parasuraman,Zeithaml,andMalhotra
createda22itemscalecalledESQUAL,reflectingthefourkeydimensionsofefficiency(Is
navigationeasy?Cantransactionsbecompletedquickly?Doesthewebsiteloadquickly?),
systemavailability(i.e.,Isthesitealwaysavailable?Doesitlaunchrightaway?Isitstable
anddoesnotcrash?),fulfillment(i.e.,areordersdeliveredaspromised?Andofferingsare
describedtruthfully?),andprivacy(i.e.,Isinformationprivacyisprotectedandpersonal
25
informationnotsharedwithothersites?). ServiceInsights14.5offersthelatest
perspectivesonthistopicandaddressesthechallengeofintegratingservicequality
measuresacrossbothvirtualandphysicalchannels.
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ServiceInsights14.5:NewThinkingonDefiningand
MeasuringEServiceQuality
TomanagersofcompanieswithaWebpresence,sayJoelCollierandCarol
Bienstock,anawarenessofhowcustomersperceiveservicequalityis
essentialtounderstandingwhat[they]valueinanonlineservicetransaction.
Eservicequalityinvolvesmorethanjustinteractionswithawebsite
(describedasprocessquality).Itextendstoincludeoutcomequalityand
recoveryquality,andeachmustbemeasured.Theseparationofcustomers
fromprovidersduringonlinetransactionshighlightstheimportanceof
evaluatinghowwellafirmhandlescustomersquestions,concerns,and
frustrationswhenproblemsarise.
Processquality.Customersinitiallyevaluatetheirexperienceswithane
retailingwebsiteagainstfiveprocessqualitydimensions:privacy,design,
information,easeofuse,andfunctionality.Thislastconstructreferstoquick
pageloads,linksthatdontleadtodeadends,avarietyofpaymentoptions,
accurateexecutionofcustomercommands,andabilitytoappealtoa
universalaudience(includingthedisabledandthosewhospeakother
languages).
Outcomequality.Customersevaluationsofprocessqualityhavea
significanteffectontheirevaluationofoutcomequality,madeupoforder
timeliness,orderaccuracy,andordercondition.
Recoveryquality.Intheeventofaproblem,customersevaluatethe
recoveryprocessagainstinteractivefairness(abilitytolocateandinteractwith
technologysupportforawebsite,includingtelephonebasedassistance),
proceduralfairness(policies,procedures,andresponsivenessinthe
complaintprocess),andoutcomefairness.Howthecompanyrespondshasa
significanteffectonthecustomerssatisfactionlevelandfutureintentions.
MultichannelIssues
Goingonestepfurther,RuiSousaandChristopherVossnotethatmany
servicesoffercustomersachoiceofbothvirtualandphysicaldelivery
channels.Customersevaluationsofservicequalityareformedacrossall
pointsofcontacttheyhavewiththefirm.Inamultichannelsetting,
researchersmustmeasurephysicalquality,virtualquality,andintegration
qualitytheabilitytoprovidecustomerswithaseamlessserviceexperience
acrossmultiplechannels.Achievingconsistencyacrosssuchinteractionsis
particularlyrelevantwhenafirmaddsnewvirtualchannels,accompaniedby
specialistsupportsystemsthatoftenarepoorlyintegratedwithexisting
systems.Toavoidsuchfragmentationandachieveconsistentservicequality,
SousaandVosscallforexplicitlinksbetweenthefirmsmarketingand
operationsfunctions.
Sources:JoelE.CollierandCarolC.Bienstock,MeasuringService
QualityinERetailing,JournalofServiceResearch8,(February2006):
260275RuiSousaandChristopherA.Voss,ServiceQualityin
MultichannelServicesEmployingVirtualChannels,JournalofService
Research8,(May2006):356371.
Appendix 14.3. Systematic Approaches to Quality and Productivity

Improvement and Process Standardization
Manyofthethinking,tools,andconceptsintroducedinChapter14originatefromTotal
QualityManagement(TQM),ISO9000,SixSigma,andtheMalcolmBaldrigeModel.We
discusseachoftheseapproachesandrelatethembacktotheservicequalityand
productivitycontextinthefollowingsections.
LO14
ExplainhowTQM,ISO9000,theMalcolmBaldrigeApproach,andSixSigmarelateto
managingandimprovingservicequalityandproductivity.
Total Quality Management

TotalQualityManagement(TQM)conceptswereoriginallydevelopedinJapan.Theyare
widelyusedinmanufacturingandmorerecentlyinservicefirms,includingeducational
institutions(seeServiceInsights14.6).TQMcanhelporganizationstoattainservice
excellence,increasetheproductivityofservicedeliveryprocesses,andbeacontinuedsource
26
ofvaluecreationthroughthefeedingofinnovativeprocessesforthefirm.
SomeconceptsandtoolsofTQMcanbedirectlyappliedtoservices.Asdiscussedinthis
chapter,TQMtoolssuchascontrolcharts,flowcharts,andfishbonediagramsarebeingused
byservicefirmswithgreatresultsformonitoringservicequalityanddeterminingtheroot
causesofspecificproblems.
Sureshchanderetal.identified12criticaldimensionsforsuccessfulimplementationofTQM
inaservicecontext:(1)topmanagementcommitmentandvisionaryleadership(2)human
resourcemanagement(3)technicalsystem,includingserviceprocessdesignandprocess
management(4)informationandanalysissystem(5)benchmarking(6)continuous
improvement(7)customerfocus(8)employeesatisfaction(9)unioninterventionand
27
employeerelations(10)socialresponsibility(11)servicescapesand(12)serviceculture.
ISO 9000 Certification

Thereare162countriesthataremembersoftheInternationalOrganizationfor
Standardization(ISO)basedinGeneva,Switzerland,thatpromotesstandardizationand
qualitytofacilitateinternationaltrade.ISO9000comprisesrequirements,definitions,
guidelines,andrelatedstandardstoprovideanindependentassessmentandcertificationof
afirmsqualitymanagementsystem.TheofficialISO9000definitionofqualityis:The
totalityoffeaturesandcharacteristicsofaproductorservicethatbearonitsabilityto
satisfyastatedorimpliedneed.Simplystated,qualityisaboutmeetingorexceedingyour
customersneedsandrequirements.Toensurequality,ISO9000usesmanyTQMtools
andinternalizestheiruseinparticipatingfirms.
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ServiceInsights14.6:TQMinEducationalInstitutions
Highereducationalinstitutionsareincreasinglycompetingfortalented
studentsandhavestartedtoacceptthattheyhavetobemorecustomer
centricintheirapproachtoincreasestudentsatisfaction.Whatisthemeaning
ofservicequalityinahighereducationalinstitution?Sakthivel,Rajendran,
andRajuproposedaTQMmodelwithfivevariablesthatmeasuredifferent
dimensionsofservicequalityinaninstitutionofhigherlearning,andthey
suggestthatthesevariableswillincreasestudentsatisfaction.
Commitmentoftopmanagement.Topmanagementhastowalkthetalk
andmakesurethatwhatispreachedintermsofeducationalexcellenceand
servicequalityisreallybeingpracticed.
Coursedelivery.Whileinstitutionsofhigherlearninghirepeoplewith
expertknowledge,thereisaneedforsuchexpertknowledgetobe
transmittedexpertly,withpassion.
Campusfacilities.Attentionneedstobefocusedonhavingexcellent
infrastructureandfacilitiesforstudentlearningaswellasfortheir
extracurricularactivities.Thesefacilitiesalsohavetobeproperlymaintained.
Courtesy.Thisisapositiveattitudetowardstudentsthatwillcreatea
friendlylearningenvironment.
Customerfeedbackandimprovement.Continuousfeedbackfromstudents
canleadtoimprovements.
TheresearchersstudiedengineeringstudentsfromamixofISOcertifiedand
nonISOcertifiedinstitutions,andfoundthatISO9001:2000certified
institutionswereadoptingTQMfasterandofferedabetterqualityeducation
thannonISOcertifiedinstitutions.
Furthermore,theirfindingsshowedthatwhileallfivevariablestogetherdid
predictstudentsatisfaction,twovariablesinparticularweremoreimportantin
affectingstudentsatisfaction.Thevariableswerecommitmentoftop
managementandcampusfacilities.Topmanagementneedstobe
committedtoqualityassuranceinmakingsuretheothervariablesarein
placetoimprovethestudentexperience.
Figure14.19.Higherlearningincreasinglyfocusonservice
qualityandTQM.
Source:P.B.Sakthivel,G.Rajendran,andR.Raju,TQMImplementation
andStudentsSatisfactionofAcademicPerformance,TheTQM
Magazine17,no.6(2005):573589.
ServicefirmsgenerallyadoptedISO9000standardslaterthanmanufacturingfirmsdid.
MajorservicesectorsthathaveadoptedISO9000certificationincludewholesaleandretail
firms,ITserviceproviders,healthcareproviders,consultancyfirms,andeducational
institutions.ByadoptingISO9000standards,servicefirms,especiallysmallones,cannot
onlyensurethattheirservicesconformtocustomerexpectationsbutalsoachieve
improvementsinproductivity.
MalcolmBaldrige Model
TheMalcolmBaldrigeNationalQualityAward(MBNQA)wasdevelopedbytheNational
InstituteofStandardsandTechnology(NIST)withthegoalofpromotingbestpracticesin
qualitymanagementandrecognizingandpublicizingqualityachievementsamongUSfirms.
CountriesotherthantheUnitedStateshavesimilarqualityawardsthatfollowthe
MBNQAmodel.
Theframeworkisgenericanddoesnotdistinguishbetweenmanufacturingandservice
organizations,buttheawardhasaspecificservicecategory,andthemodelcanbeusedto
createacultureofongoingserviceimprovements.Majorservicesfirmsthathavewonthe
awardincludeRitzCarlton,FedEx,theUniversityofWisconsin,XeroxBusinessServices,
BoeingAerospaceSupport,CaterpillarFinancialServicesCorp.,andAT&T.Researchhas
28
confirmedthatemployingthisframeworkcanimproveorganizationalperformance.
TheMalcolmBaldrigeModelassessesfirmsonsevenareas:
1)Leadershipcommitmenttoaservicequalityculture.
2)Planningprioritiesforimprovement,includingservicestandards,performancetargets,
andmeasurementofcustomersatisfaction,defects,cycletime,andproductivity.
3)Informationandanalysisthatwillaidtheorganizationtocollect,measure,analyze,and
reportstrategicandoperationalindicators.
4)Humanresourcesmanagementthatenablesthefirmtodeliverserviceexcellence,
rangingfromhiringtherightpeople,todevelopment,involvement,empowerment,and
motivation.
5)Processmanagement,includingmonitoring,continuousimprovement,andprocess
redesign.
6)Customerandmarketfocusthatallowsthefirmtodeterminecustomerrequirements
andexpectations.
29
7)Businessresults.
Six Sigma
TheSixSigmaapproachwasoriginallydevelopedbyMotorolatoimproveproductquality
andreducewarrantyclaims,andwassoonadoptedbyothermanufacturingfirmstoreduce
defectsinavarietyofareas.
Subsequently,servicefirmsembracedvariousSixSigmastrategiestoreducedefects,reduce
30
cycletimes,andimproveproductivity. Asearlyas1990,GECapitalappliedSixSigma
methodologytoreducethebackroomcostsofsellingconsumerloans,creditcardinsurance,
andpaymentprotection.ItspresidentandCEODenisNaydensaid,
AlthoughSixSigmawasoriginallydesignedformanufacturing,itcanbeappliedto
transactionalservices.Oneobviousexampleisinmakingsurethemillionsofcreditcardand
otherbillsGEsendstocustomerarecorrect,whichdrivesdownourcostsofmaking
adjustments.Oneofourbiggestcostsinthefinancialbusinessiswinningnewcustomers.If
31
wetreatthemwell,theywillstaywithus,reducingourcustomeroriginationcosts.
Statistically,SixSigmameansachievingaqualitylevelofonly3.4defectspermillion
opportunities(DPMO).Tounderstandhowstringentthistargetis,considermaildeliveries.
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Ifamailservicedeliverswith99%accuracy,itmisses3,000itemsoutof300,000
deliveries.ButifitachievesaSixSigmaperformancelevel,onlyoneitemoutofthistotal
willgoastray.
Overtime,SixSigmahasevolvedfromadefectreductionapproachtoanoverallbusiness
improvementapproach.AsdefinedbyPande,Neuman,andCavanagh:
SixSigmaisacomprehensiveandflexiblesystemforachieving,sustainingandmaximizing
businesssuccess.SixSigmaisuniquelydrivenbycloseunderstandingofcustomerneeds,
disciplineduseoffacts,data,andstatisticalanalysis,anddiligentattentiontomanaging,
32
improving,andreinventingbusinessprocesses.
Processimprovementandprocessdesign/redesignaretwostrategiesthatformthe
cornerstoneoftheSixSigmaapproach.Processimprovementstrategiesaimtoidentifyand
eliminatetherootcausesoftheservicedeliveryproblems,therebyimprovingservice
quality.Processdesign/redesignstrategiesactasasupplementarystrategyto
improvementstrategy.Ifarootcausecantbeidentifiedoreffectivelyeliminatedwithin
theexistingprocesses,eithernewprocessesaredesignedorexistingprocessareredesigned
tofullyorpartiallyaddresstheproblem.
ThemostpopularSixSigmaimprovementmodelforanalyzingandimprovingbusiness
processesistheDMAICmodel,showninTable14.6.DMAICstandsfor:
Definetheopportunities.
Measurekeysteps/inputs.
Analyzetoidentifyrootcauses.
Improveperformance.
Controltomaintainperformance.
Table14.6.ApplyingtheDMAICmodeltoprocessimprovementand
redesign
Source:ReproducedfromPande,P.,Neuman,R.P.,andCavanagh,R.R.(2000).
TheSixSigmaWay.NewYork:McGrawHill.
Which Approach Should a Firm Adopt?

Astherearevariousapproachestosystematicallyimprovingaservicefirmsservicequality
andproductivity,thequestionarisesastowhichapproachshouldbeadoptedTQM,ISO
9000,theMalcolmBaldrigemodel,orSixSigma.TQMcanbeappliedatdifferinglevelsof
complexity,andbasictoolssuchasflowcharting,frequencycharts,andfishbonediagrams
probablyshouldbeadoptedbyanytypeofservicefirm.ISO9000seemstosuitthenext
levelofcommitmentandcomplexity,followedbytheMalcolmBaldrigeModel,andfinally
SixSigma.Whilethesearethetraditionalapproaches,therearealsootherapproachesthat
arenottraditionallyused,includingJapanesequalitysystemssuchasKanseiengineering
andQualityFunctionDeploymentthatcanhelptoincorporatethevoiceofthecustomer
33
intoafirmsservicedesigntoimproveservicequality.
Anyoneoftheapproachescanbeausefulframeworkforunderstandingcustomerneeds,
analyzingprocesses,andimprovingservicequalityandproductivity.Firmscanchoosea
particularprogram,dependingontheirownneedsanddesiredlevelofsophistication.Each
programhasitsownstrengths,andfirmscanusemorethanoneprogramtoaddontothe
other.Forexample,theISO9000programcanbeusedforstandardizingtheprocedures
andprocessdocumentation,andthentheSixSigmaandMalcolmBaldrigeprogramscan
beusedtoimproveprocessesandtofocusonperformanceimprovementacrossthe
organization.
Akeysuccessfactorofanyoftheseprogramsdependsonhowwelltheparticularquality
improvementprogramispartoftheoverallbusinessstrategy.Firmsthatimplementone
oftheseprogramsduetopeerpressureorjustasamarketingtoolwillbelesslikelyto
34
succeedthanfirmsthatviewtheseprogramsasimportantdevelopmenttools. Service
championsmakebestpracticesinservicequalitymanagementacorepartoftheir
35
organizationalculture.
TheNationalInstituteofStandardsandTechnology(NIST),whichorganizestheMalcolm
BaldrigeAwardprogram,hasanindexcalledtheBaldrigeIndexofMalcolmBaldrige
36
Awardwinners.ItwasobservedthatwinnersalwaysoutperformedtheS&P500index.
Sadly,Motorola,atwotimewinneroftheaward,hasbeensufferingfinanciallyandlosing
marketsharepartlyduetothefirmsfailuretokeepupwithnewtechnology.Clearly,
successcannotbetakenforgranted.Commitmentandconstantimprovementthatfollow
changingmarkets,technologies,andenvironmentsarekeysforsustainedsuccess.
Endnotes
1 .AdaptedfromAudreyGilmore,ServiceMarketingManagementCompetencies:A
FerryCompanyExample,InternationalJournalofServiceIndustryManagement9,no.1
(1998):7492,www.stenaline.com (http://www.stenaline.com),accessedMarch12,2012.
2 .ValarieA.Zeithaml,A.Parasuraman,andLeonardL.Berry,DeliveringQuality
Service.NewYork:TheFreePress,1990.
3 .A.Parasuraman,ValarieA.Zeithaml,andLeonardL.Berry,AConceptualModelof
ServiceQualityandItsImplicationsforFutureResearch,JournalofMarketing49,(Fall
1985):4150ValarieA.Zeithaml,LeonardL.Berry,andA.Parasuraman,
CommunicationandControlProcessesintheDeliveryofServices,JournalofMarketing
52,(April1988):3658.
4 .ThesubgapsinthismodelarebasedonthesevengapmodelbyChristopher
Lovelock,ProductPlus,NewYork:McGrawHill,1994:112.
5 .ValarieA.Zeithaml,MaryJoBitner,andDwayneD.Gremler,ServicesMarketing:
IntegratingCustomerFocusacrosstheFirm5/E,NewYork:McGrawHill,2009,297.
6 .ThissectionisbasedpartiallyonJochenWirtzandMonicaTomlin,Institutionalizing
CustomerdrivenLearningthroughFullyIntegratedCustomerFeedbackSystems,
ManagingServiceQuality10,no.4(2000):205215.Additionalreadingonservicequality
measurementcanbefoundinChingChowYang,EstablishmentandApplicationsofthe
IntegratedModelofServiceQualityMeasurement,ManagingServiceQuality13,no.4
(2003):310324.
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7 .LeonardL.BerryandA.Parasuraman,ListeningtotheCustomerTheConceptofa
ServiceQualityInformationSystem,SloanManagementReview38,(Spring1997):6576.
8 .Customerlisteningpracticeshavebeenshowntoaffectserviceperformance,growth,
andprofitability.SeeWilliamJ.Glynn,SeandeBrca,TeresaBrannick,BrianFynes,and
SeanEnnis,ListeningPracticesandPerformanceinServiceOrganizations,International
JournalofServiceIndustryManagement14,no.3(2003):310330.
9 .BakerW.E.andSinkulaJ.M.,TheSynergisticEffectofMarketOrientationand
LearningOrientationonOrganizationalPerformance,JournaloftheAcademyof
MarketingScience27,no.4(1999):411427.
10.NeilA.Morgan,EugeneW.Anderson,andVikasMittal,UnderstandingFirms
CustomerSatisfactionInformationUsage,JournalofMarketing69,(July2005):131151.
11.Forreadingoncustomerfeedbackonlinetools,refertoRobertA.Opoku,Gathering
CustomerFeedbackOnlineandSwedishSMEs,ManagementResearchNews29,no.3
(2006):106127.
12.LeonardL.BerryandA.Parasuramanprovideanexcellentoverviewofallkeyresearch
approachesdiscussedinthissectionplusanumberofothertoolsintheirpaper,Listeningto
theCustomerTheConceptofaServiceQualityInformationSystem,SloanManagement
Review38,(Spring1997):6576.
13.Foradiscussiononsuitablesatisfactionmeasures,seeJochenWirtzandLeeMeng
Chung,AnExaminationoftheQualityandContextSpecificApplicabilityofCommonly
UsedCustomerSatisfactionMeasures,JournalofServiceResearch5,(May2003):345
355.
14.Notethatfeedbackprovidedtothefirmisverydifferenttothatpostedpublicly.For
example,onebusinessownerhadtheopportunitytomeetmembersofanonline
communitywhohadgivenhisrestaurantonlymediocreratings.Tohissurprise,hefound
thatthereviewerswerenotinthesamesegmentashiscustomerbase,andeventhough
theylikedhisfood,theydowngradedhisrestaurantastheyfeltthepricewastoohigh.It
turnedoutthatpricewastheissueasthereviewerswerelessaffluentthentheirnormal
customers.See:DuncanSimester,WhenYouShouldntListentoYourCritics,Harvard
BusinessReview,June2011:42.Hence,thisshowsthatonlinereviewsarenotreliable
becausewedonotknowifthepeoplewhoareratingtherestaurantareeventhesameas
thetargetcustomer,andusingthesameyardsticks.Infact,wearenotevensurewhether
thepersonwashiredbythecompanytoprovidethefeedback.Hence,itissometimes
difficulttofindoutwhetherpubliclypostedfeedbackandratingsarelegitimate.Yet,
customersinthemarketdolookatthefeedbackinonlinereviewstomaketheirpurchasing
decisions.See:RaymondR.LiuandWeiZhang,InformationalInfluenceofOnline
CustomerFeedback:AnEmpiricalStudy,DatabaseMarketingandCustomerStrategy
Management17,no.2(2010):120131.
15.RobertJohnstonandSandyMehra,BestpracticeComplaintManagement,Academy
ofManagementExecutive16,no.4(2002):145154.
16.CommentsbyThomasR.Oliver,thenseniorvicepresident,salesandcustomerservice,
FederalExpressreportedinChristopherH.Lovelock,FederalExpress:Quality
ImprovementProgram.Lausanne:InternationalInstituteforManagementDevelopment,
1990.
17.ChristopherLovelock,ProductPlus:HowProduct+Service=CompetitiveAdvantage.
NewYork:McGrawHill,1994,218.
18.Thesecategoriesandtheresearchdatathatfollowhavebeenadaptedfrominformation
inD.DarylWyckoff,NewToolsforAchievingServiceQuality,CornellHoteland
RestaurantAdministrationQuarterly(AugustSeptember2001),2538.
19.RolandT.Rust,AnthonyJ.Zahonik,andTimothyL.Keiningham,ReturnonQuality
(ROQ):MakingServiceQualityFinanciallyAccountable,JournalofMarketing59(April
1995):5870andRolandT.Rust,ChristineMoorman,andPeterR.Dickson,Getting
ReturnonQuality:RevenueExpansion,CostReduction,orBoth?JournalofMarketing66
(October2002):724.
20.KennethJ.Klassen,RandolphM.Russell,andJamesJ.Chrisman,Efficiencyand
ProductivityMeasuresforHighContactServices,TheServiceIndustriesJournal18
(October1998):118JamesL.Heskett,ManagingintheServiceEconomy.NewYork:
TheFreePress,1986.
21.Foramoreindepthdiscussiononserviceproductivity,refertoCynthiaKarenSwank,
TheLeanServiceMachine,HarvardBusinessReview81,no.10(2003):123129.
22.A.Parasuraman,ValarieA.Zeithaml,andLeonardBerry,SERVQUAL:AMultiple
ItemScaleforMeasuringConsumerPerceptionsofServiceQuality,JournalofRetailing
64,(1988):1240.
23.See,forinstance,FrancisButtle,SERVQUAL:Review,Critique,ResearchAgenda,
EuropeanJournalofMarketing30,no.1(1996):832SimonS.K.LamandKaShingWoo,
MeasuringServiceQuality:ATestRetestReliabilityInvestigationofSERVQUAL,
JournaloftheMarketResearchSociety39,(April1997):381393TerrenceH.Witkowski
andMaryF.Wolfinbarger,ComparativeServiceQuality:GermanandAmericanRatings
AcrossServiceSettings,JournalofBusinessResearch55,(2002):875881LisaJ.
MorrisonCoulthard,MeasuringServiceQuality:AReviewandCritiqueofResearchUsing
SERVQUAL,InternationalJournalofMarketResearch46,Quarter4,(2004):479497.
24.GerhardMels,ChristoBoshoff,andDenonNel,TheDimensionsofServiceQuality:
TheOriginalEuropeanPerspectiveRevisited,TheServiceIndustriesJournal17,(January
1997):173189.
25.A.Parasuraman,ValarieA.Zeithaml,andArvindMalhotra,ESQUAL:AMultiple
ItemScaleforAssessingElectronicServiceQuality,JournalofServiceResearch7,no.3
(2005):213233.
26.C.MeleandM.Colurcio,TheEvolvingPathofTQM:TowardsBusinessExcellenceand
StakeholderValue,InternationalJournalofQualityandReliabilityManagement23,no.5
(2006):464489C.Mele,TheSynergicRelationshipBetweenTQMandMarketingin
CreatingCustomerValue,ManagingServiceQuality17,no.3(2007):240258.
27.G.S.Sureshchandar,ChandrasekharanRajendran,andR.N.Anantharaman,AHolistic
ModelforTotalServiceQuality,InternationalJournalofServiceIndustryManagement12,
no.4(2001):378412.
28.SusanMeyerGoldsteinandSharonB.Schweikhart,EmpiricalSupportfortheBaldrige
AwardFrameworkinUSHospitals,HealthCareManagementReview27,no.1(2002):
6275.
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29.AllanShirks,WilliamB.Weeks,andAnnieStein,BaldrigeBasedQualityAwards:
VeteransHealthAdministrations3YearExperience,QualityManagementinHealth
Care10,no.3(2002):4754NationalInstituteofStandardsandTechnology,Baldrige
FAQs,http://www.nist.gov/baldrige/about/baldrige_faqs.cfm
(http://www.nist.gov/baldrige/about/baldrige_faqs.cfm),accessedMarch12,2012.
30.JimBiolos,SixSigmaMeetstheServiceEconomy,HarvardBusinessReview80,
(November2002):35.
31.MikelHarryandRichardSchroeder,SixSigmaTheBreakthroughManagement
StrategyRevolutionizingtheWorldsTopCorporations.NewYork:Currency,2000,232.
32.PeterS.Pande,RobertP.Neuman,andRonaldR.Cavanagh,TheSixSigmaWay:
HowGE,Motorola,andOtherTopCompaniesAreHoningtheirPerformance.NewYork:
McGrawHill,2000.
33.MarvinE.Gonzalez,ReneDentisteMueller,andRhondaW.Mack,AnAlternative
ApproachinServiceQuality:AnebankingCaseStudy,TheQualityManagementJournal
15,no.1(2008):4159.
34.GavinDick,KevinGallimoreandJaneC.Brown,ISO9000andQualityEmphasis:An
EmpiricalstudyofFrontRoomandBackRoomDominatedServiceIndustries,
InternationalJournalofServiceIndustryManagement12,no.2(2001):114136and
AdrianHughesandDavidN.Halsall,Comparisonofthe14DeadlyDiseasesandthe
BusinessExcellenceModel,TotalQualityManagement13,no.2(2002):255263.
35.CathyA.EnzandJudyA.Siguaw,BestPracticesinServiceQuality,CornellHoteland
RestaurantAdministrationQuarterly(October2000):2029.
36.EightNISTStockInvestmentStudy,(USA:Gaithersburg,NationalInstituteof
StandardsandTechnology,March2002).
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Essentials of Services Marketing, Second Edition

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Chapter 14. Improving Service Quality and Productivity

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Integrating Service Quality and Productivity Strategies

What Is Service Quality?

Dimensions of Service Quality

Identifying and Correcting Service Quality Problems

The Gaps Model in Service Design and Delivery

Key Ways to Close the Gaps in Service Quality

Measuring and Improving Service Quality

Soft and Hard Service Quality Measures

Learning from Customer Feedback

Key Objectives of Effective Customer Feedback Systems

Use a Mix of Customer Feedback Collection Tools

Analysis, Reporting, and Dissemination of Customer Feedback

Hard Measures of Service Quality

Tools to Analyze and Address Service Quality Problems

Root Cause Analysis: The Fishbone Diagram

BlueprintingA Powerful Tool for Identifying Fail Points

Assess Costs and Benefits of Quality Initiatives

Determine the Optimal Level of Reliability

Defining and Measuring Productivity

Defining Productivity in a Service Context

Service Productivity, Efficiency, and Effectiveness

Improving Service Productivity

Generic Productivity Improvement Strategies

Customer-Driven Approaches to Improve Productivity

How Productivity Improvements Impact Quality and Value

Unlock Your Learning

Appendix 14.1. Measuring Service Quality Using Servqual

Appendix 14.2. Measuring Service Quality in Online Environments

Appendix 14.3. Systematic Approaches to Quality and Productivity

Total Quality Management

ISO 9000 Certification

Which Approach Should a Firm Adopt?

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