Measuring Quality of Services

Source: A. Parasuraman University of Miami

Issues How do customers perceive and evaluate service quality?What are managers’ perceptions about service quality?Do discrepancies exist between the perceptions of customers and those of managers?Can customers’ and managers’ perceptions be combined into a general model of service quality?How can service organizations improve customer service and achieve excellence?

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Services and Their Customer Expectations

HospitalPatient receive the correct treatments?Patient treated courteously by all personnel?Hospital environment support patient recovery?

BankCustomer’s transactions completed with precision?Bank comply with government regulations?Customer’s statements accurate?

Service quality is more difficult to measure than for goodsService quality perceptions depend on

Expectations versus realityProcess and outcome

Types of service qualityNormal: Routine service deliveryExceptional: How problems are handled

Quality Management In Services

SERVQUAL: Measuring Service Quality

5

Determinants of Perceived Service Quality

Dimensions of Service Quality

1. Access2. Communication3. Competence4. Courtesy5. Credibility6. Reliability7. Responsiveness8. Security9. Tangibles10.

Understanding/Knowing the Customer

ExpectedService

PerceivedService

ServiceQuality

Gap

PerceivedServiceQuality

Word ofMouth

PersonalNeeds

PastExperience

External Communication

to Customers

6

Correspondence between SERVQUAL Dimensions and Original Ten Dimensions for Evaluating

Service QualityOriginal Ten

Dimensions forEvaluating Service

Quality

TANGIBLESRELIABILITYRESPONSIVENESSCOMPETENCE

COURTESY

CREDIBILITY

SECURITY

ACCESS

COMMUNICATION

UNDERSTANDING/ KNOWING THECUSTOMER

TANGIBLES RELIABILITY RESPONSIVENESS ASSURANCE EMPATHY

SERVQUAL Dimensions

7

Definitions of the SERVQUAL Dimensions

Tangibles: Appearance of physical facilities, equipment, personnel, and communication materials.Reliability: Ability to perform the promised service and accurately.Responsiveness: Willingness to help customers and provide prompt service.

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Definitions of the SERVQUAL Dimensions

Assurance: Knowledge and courtesy of employees and their ability to inspire trust and confidence.Empathy: Caring, individualized attention the firm provides its customers.

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Relative Importance of Service Dimensions [Study

1]

TANGIBLES 11%

EMPATHY 16%

RELIABILITY 32%

ASSURANCE 19%

RESPONSIVENESS

22%

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Relative Importance of Service Quality Dimensions [Study 2]

Mean Number of Points Allocated out of 100 Points

37

9

1318

23

29

12

17

19

23

28

12

18

20

23

33

11

1519

23

32

14

1518

21

Computer Manufacturer All Companies Retail Chain

Auto Insurer Life InsurerReliability Responsiveness Assurance Empathy Tangibles

11

1.00

0.00

-1.00

-2.00Tangibles Reliability Responsive-

nessAssurance Empathy

Mean SERVQUAL Scores by Service Dimension

[Study 1]

12

Nature of Service Expectations

Desired Service

Zoneof

Tolerance

Adequate Service

Level Customers Believe Can and Should Be

Delivered

Minimum Level Customers Are Willing

to Accept

13

Gap Model of Service Quality

Customer

Company

Customer Perceptions

Customer Expectations

Gap 5

Service Delivery Designs

Gap 2

Service Delivery

Gap 3Communications

to Customers

Gap 4

Perceptions of Customer Expectations

Gap

1

Source: Zeithaml & Bitner

Gap Model of Service Quality

Gap 5: Customer Perceptions - Customer Expectations Gap 1: Not Knowing What Customers Expect

Company Perception of Customer Expectations - Actual

Gap 2: Not Selecting the Right Design Standards

Service Design Standards - Company Perception of Customer Expectations

Gap Model of Service Quality

Gap 3: Not Delivering to Service Standards:

The Operations GapActual Service Performance - Standards

Gap 4: Not Matching Performance to Promises

Actual Service Performance - Promised Performance

Gap 3: Translating the Service Standards into the Delivery

Operation

Gap 3a: Operational Design

People: Employees, Managers, & Customers

Process: Role of Service Blueprinting

Equipment/Facilities, i.e., Tangibles Plus a Whole Lot More

Gap 3b: Operational Control

Ensuring the Quality of the Outcome, Especially When Using Intermediaries

Enhancing the Operational Design Through Feedback

Gap 3: Role of Employees in Operational Design & Delivery

Staffing and Scheduling ShortcomingsIneffective RecruitmentRole Ambiguity & Role ConflictWrong Skills for Process - Equipment ElementsFlaws in Evaluation & Compensation SystemsLack of Empowerment & Teamwork

Gap 3: Role of Customers in Operational Design & Delivery

Customers Not Performing Their Role in the Process

Lack of UnderstandingLack of AbilityLack of WillingnessAmbiguity & Uncertainty About What They Want

Gap 3: Role of Customers in Operational Design & Delivery

No Reward for Good PerformanceInteraction with Other CustomersImpact: Customers Introduce Variability to an OperationSolution: Limit & Control Customer Involvement Through Process Design & Technology

Gap 3: Role of Process in Operational Design & Delivery

Matching Demand to Capacity Through Demand Management

Pricing: Yield ManagementCustomer CommunicationAlternative Service Delivery ProcessesComplementary Products

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Gap 3b: Maintaining Operational Control

Quality Control ProceduresMeasure OutcomesMeasure Processes

Controlling Quality through the Supply ChainIntermediariesDistributed Delivery Network

Enhancing the Operational Design Through Feedback

Properly measuring customer perceptions

TWO APPROACHES FOR MEASURING MSA AND MSS

Two-Column Format QuestionnaireDirect measures of MSA and MSS

Three-Column Format QuestionnaireDifference-score measures of MSA and MSS

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TWO-COLUMN FORMAT

Please think about the quality of service ________ offers compared to the two different levels of service defined below:

MINIMUM SERVICE LEVEL - the minimum level of service performance you consider

adequate. DESIRED SERVICE LEVEL - the level of service performance you desire.

For each of the following statements, please indicate: (a) how ______’s performance compares with your minimum service level by circling one of the numbers in the first column; and (b) how ______’s performance compares with your desired service level by circling one of the numbers in the second column. Compared to My Minimum Compared to My Desired Service Level ____’s Service Level ____’s Service Performance is: Service Performance is: The No The No

When it comes to … Lower Same Higher Opin- Lower Same Higher Opin- ion ion

1. Prompt service 1 2 3 4 5 6 7 8 9 N 1 2 3 4 5 6 7 8 9 N to policyholders

2. Employees who are 1 2 3 4 5 6 7 8 9 N 1 2 3 4 5 6 7 8 9 N consistently courteous

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THREE-COLUMN FORMAT

We would like your impressions about ________’s service performance relative to your expectations. Please thinkabout the two different levels of expectations defined below:

MINIMUM SERVICE LEVEL - the minimum level of service performance you consider adequate.

DESIRED SERVICE LEVEL - the level of service performance you desire.

For each of the following statements, please indicate: (a) your minimum service level by circling one of the numbersin the first column; and (b) your desired service level by circling one of the numbers in the second column; and (c)your perception of ___________’s service by circling one of the numbers in the third column.

My Minimum My Desired My Perception Service Service of ____’s Service Level is: Level is: Performance is:

No

When it comes to … Low High Low High Low High Opin- ion

1. Prompt service 1 2 3 4 5 6 7 8 9 1 2 3 4 5 6 7 8 9 1 2 3 4 5 6 7 8 9 N

to policyholders

2. Employees who are 1 2 3 4 5 6 7 8 9 1 2 3 4 5 6 7 8 9 1 2 3 4 5 6 7 8 9 N

consistently courteous

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Measurement Error: Percent of Respondents Answering Incorrectly

Two-ColumnFormat

Three-ColumnFormat

ComputerManufacturer 8.6% 0.6%

Retail Chain 18.2% 1.8%

Auto Insurer 12.2% 1.6%

Life Insurer 9.9% 2.7%

Type of Company

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Mean Service Quality Scores (Combined Across All Companies)

TWO-COLUMN FORMATQUESTIONNAIRE

THREE-COLUMN FROMATQUESTIONNAIRE

MSA Scores MSS Scores MSA Scores MSS Scores

Reliability 6.8 5.9 0.2 -1.0

Responsiceness 6.7 5.7 0.3 -1.1

Assurance 6.8 5.9 0.4 -0.9

Empathy 6.5 5.6 0.2 -1.2

Tangibles 7.1 6.4 1.1 -0.2

SERVQUAL Dimensions

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Revised SERVQUAL Items

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Reliability1. Providing services as promised2. Dependability in handling customers'

service problems3. Performing services right the first

time4. Providing services at the promised

time5. Keeping customers informed about

when services will be performed

Revised SERVQUAL Items

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Responsiveness6. Prompt service to customers7. Willingness to help customers8. Readiness to respond to customers' requestsAssurance 9. Employees who instill confidence in

customers10. Making customers feel safe in their

transactions11. Employees who are consistently courteous12. Employees who have the knowledge to

answer customer questions

Revised SERVQUAL Items

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Empathy13. Giving customers individual attention14. Employees who deal with customers

in a caring fashion15. Having the customer's best interest

at heart16. Employees who understand the

needs of their customers

Revised SERVQUAL Items

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Tangibles17. Modern equipment18. Visually appealing facilities19. Employees who have a neat, professional appearance20. Visually appealing materials associated

with the service21. Convenient business hours

Definition of e-Service Quality (e-SQ)

e-SQ is the extent to which a Website facilitates efficient and effective shopping, purchasing and delivery of products and services.

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Dimensions of e-Service Quality from Focus Groups

AccessEase of NavigationEfficiencyCustomization/ PersonalizationSecurity/Privacy

ResponsivenessAssurance/TrustPrice KnowledgeSite AestheticsReliabilityFlexibility

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Reliability

SAMPLE ATTRIBUTESSite does not crashAccurate billingAccuracy of orderAccuracy of account informationHaving items in stockTruthful informationMerchandise arrives on time

DEFINITION

Correct technical functioning of the site and the accuracy of service promises, billing and product information.

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Efficiency

SAMPLE ATTRIBUTES

Site is well organizedSite is simple to useSite provides information in reasonable chunksSite allows me to click for more information if I need it

DEFINITION

The site is simple to use, structured properly, and requires a minimum of information to be input by the customer.

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e-Service Quality vs. Traditional SQ

Several dimensions are the same, but specific attributes underlying them are differente-SQ involves some new dimensions Empathy -- and other ‘hi-touch’ oriented attributes -- do not seem to be as critical for e-SQ except when customers experience problems;

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Technology Readiness (TR)

An organization’s ability to use technology effectively in marketing to and serving customers critically depends on the technology readiness of its customers and employees

Technology Readiness (TR) refers to “people’s propensity to embrace and use new technologies for accomplishing goals in home life and at work

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Key Insights from Qualitative Research Studies

TR doesn’t just refer to possessing technical skills; TR is much more a function of people’s beliefs and feelings about technologyPeople’s beliefs can be positive about some aspects of technology but negative about other aspectsThe relative strengths of the of positive and negative beliefs determine a person’s receptivity to technology

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Receptive toTechnology

NeutralResistant toTechnology

Technology-Beliefs Continuum

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Link between Technology Beliefs and Technology Readiness

High

Receptive toTechnology

NeutralResistant toTechnology

Low

Medium

Tec

hn

olo

gy

Rea

din

ess

Technology-Beliefs Continuum40

Key Insights from Quantitative Research Studies

TR consists of four facets or dimensions that are fairly independent of one anotherPeople’s ratings on a set of belief statements about technology can be combined to create a reliable and valid measure of TR -- i.e., a “Technology Readiness Index” [TRI]The TRI is a good predictor of people’s technology-related behaviors and preferencesA meaningful typology of customers can be created based on their TR scores on the four dimensions

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Definitions of the TR Drivers

Optimism: Positive view of technology; belief that it offers increased control, flexibility and efficiencyInnovativeness: Tendency to be a technology pioneer and thought leaderDiscomfort: Perceived lack of control over technology and a feeling of being overwhelmed by itInsecurity: Distrust of technology and skepticism about its working properly

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OPT. TRIINS.DIS.INN.

Mean TRScores

TR Scores by Dimension and Overall TRI

0

0,5

1

1,5

2

2,5

3

3,5

4

4,5

1 2 3 4 5

US 1999 US 2000 US 2001 Austria 2001

* **

*Austrian and US scores are signifcantly different

Characteristics of Technology Segments

Optimism Innovative- Dis- Insecu- ness comfort

rity

Explorers High High Low LowPioneers High High High HighSkeptics Low Low Low LowParanoids High Low High HighLaggards Low Low High High

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Greater than 50% Ownership/Usage of Technology-Based Products/Services

(as of 1999)

Explorers: Computers, cell phones, caller ID, ATMs, online services, telephone bankingPioneers: Computers, cell phones, caller ID, ATMs, online servicesSkeptics: Computers, ATMsParanoids: ATMsLaggards: None

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END