qm-c4 - quality management in service

07/05/2014

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QUALITY MANAGEMENT:

Dr Le Thai Phong

Foreign Trade University

T: 0975.055.299

E:[email protected]

Chapter 1: Quality Management:

Foundation

QUALITY MANAGEMENT

AND PRODUCTIVITY

Dr L Thi Phong

Vice Dean

Faculty of Business Administration

T: 0975.055.299

E: [email protected]

QUALITY MANAGEMENT:

Dr Le Thai Phong

Foreign Trade University

T: 0975.055.299

E:[email protected]

Chapter 1: Quality Management:

Foundation

Chapter 4:

Quality Management in

service

Dr L Thi Phong

Vice Dean

Faculty of Business Administration

T: 0975.055.299

E: [email protected]

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Facts & figures

15 40% customers say satisfied still leave you for your competitors

98% unsatisfied customers never complaints. They immediately move to competitors

It costs 5-7 times to have a new customer compared to retain an existing one

Fredrick Reichheld

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Facts & Figures

Reducing 5% leaving customers can increase your

Profit from 30 to 85%;

Bhote, 1996

70% 70% customers who complaints still stay with customers who complaints still stay with you if their problems are positively solved you if their problems are positively solved

An unsatisfied customer can spread his words toAn unsatisfied customer can spread his words to8 8 12 12 othersothers

For you...

The reasons make customers leave you?

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Here are the reasons...

0

10

20

30

40

50

Found a betterproduct

Found acheaperproduct

Lack ofpersonalattention

Staff was rude,unhelpful

%

15%15% 15%15%20%20%

49%49%Product quality

Service quality}

}

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To have a better

product

To have a

cheaper

product

Lack of

Customer care

Lack of support

from your

employees

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Here are the reasons...

Whose is responsible

for customer service?

70%

Because of service quality

15% because of product quality

15%

Because of price

Contents

Session 1: concepts

Session 2: models of excellence

Session 3: measuring service quality

Session 4: service quality strategy

Session 5: service quality recovery

Session 6: service quality assurance


Service quality

Each business is a service provider. Does the service you

provide make customers smile?

- Philip Kotler -

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Service

Philip Kotler : A service is an act of performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product.

P.Kotler v Amstrong (1991)

Service

a service is a type of product. Service is

always the result of an activity or interaction

between a service supplier and a customer

and can take many forms.ISO 9004: 2001

Characteristics of service

1. Intangibility2. Inseperatability3. Variability4. Perish ability5. Ownership6. Simultaneously7. Quality measurement8. Consumer, a part of production process

9. No inventory

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Fast Food

What do customers buy?



MOBILE PHONE


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Model of excellence for service

Products

Excellent (e.g. PC business)Excellent (e.g. PC business)

Delivery Systems

Excellent (IBM man Excellent (IBM man -- Dell)Dell)

Service mindset

excellentexcellent

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Model of excellence

My stories

1...

2...


Levels of service

BasicBasicExpectedExpected

DesiredDesiredSupprisingSupprising

UnbelievableUnbelievable

UnbelievableUnbelievable

Discuss

Where are we, FTU?

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3 rules of service

1. S = P E

2. First impression is the most important

My story at Kodak photo boot, B10 Kim Lien

3. Focus on tangible feature of service

Barriers to listening to customers

Probably the most important management fundamental that is being ignored today is staying close to the customer to satisfy his needs and anticipate his wants. In too many companies, the customer has become a bloody nuisance whose unpredictable behaviour damages carefully made strategic plans, whose activities mess up computer operations, and who stubbornly insists that purchased products should work.

Business Week


the evidence of anecdotal events which occur

on a one-off basis and can cloud a managers

opinion

FTU is a Harvard in Vietnam

FTU is the number one

...

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the views of complainants which are often not

counterbalanced by non-complainants

A high percentage of customers do not complain

only one in 26 people is the figure often quoted,

based on research undertaken in USA


the opinions of a strongly articulate group of

customers which may cloud an organizations

view of customer requirements


preconceptions within the organization the

we have always done it this way and this is

what the customer wants syndrome

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It has been proved that by actively listening to

customers companies can save, rather than

expend money. The 1-10-100 rule illustrates

this point


For every pound your company might spend

on preventing a quality problem, it will spend

ten to inspect and correct the mistake after it

occurs. In the worst case, the quality failure

goes unanswered or unnoticed until after your

customer has taken delivery. To fix the

problem at this stage, you probably pay about

100 times what you could have paid to

prevent it from happening at all.

Session 3: measuring service quality

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Concept Parasuraman et al (1985, 1988):

Gap model shows you different gaps cause the difference between customer perception and customer expectation

Measuring service

SERVQUAL

SERVQUAL (service quality gap model) is a gap

method in service quality measurement, a

tool that can be used by Product Manager

across all industries.

Developed by Parasuraman, Zeithalm and

Berry in 1985

SERVQUAL

The aim of this model is to:

Identify the gaps between customer expectation

and the actual services provided at different

stages of service delivery

Close the gap and improve the customer service

identifies five different gaps:

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SERVQUAL

Customer expectation

Management perceptions of customer expectation

Service quality specifications

Service delivery

External communications to customers

Gap 1 :Knowledge gap

Source : Delivering Quality Service by Zeithmal, Parasuraman & Berry

Gap 2 :Policy gap

Gap 3 :Delivery gap

Gap 4 :Communication gap

Gap 5 :Customer gap

SERVQUAL

The Customer Gap: The Gap between

Customer Expectations and Customer

Perceptions

Expectation: what the customer expects according to available resources

Influenced by cultural background, family lifestyle, personality, demographics, advertising, experience with similar products and information available online

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SERVQUAL

Customer perception: totally subjective

Based on the customers interaction with the

product or service.

Perception is derived from the customers

satisfaction of the specific product or service

and the quality of service delivery.

SERVQUAL

The customer gap: the most important gap

In an ideal world: expectation would be

almost identical to the perception.

... should be based on a clear understanding

of the target market.

Understanding customer needs and knowing

customer expectations could be the best way

to close the gap.

SERVQUAL

The Knowledge Gap: The Gap between

Consumer Expectation and Management

Perception

managers are not aware or have not correctly interpreted the customers expectation in relation to the companys services or products.

Companies are trying to meet wrong or non-existing consumer needs.

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SERVQUAL

In a customer-orientated business, it is

important to have a clear understanding of

the consumers need for service.

To close the gap: will require comprehensive

market research.

SERVQUAL

The Policy Gap: The Gap between Management Perception and Service Quality Specification

This gap reflects managements incorrect translation of the service policy into rules and guidelines for employees

This can include poor service design, failure to maintain and continually update their provision of good customer service or simply a lack of standardisation.

This gap may see consumers seek a similar product with better service elsewhere.

SERVQUAL

The Delivery Gap: The Gap between Service

Quality Specification and Service Delivery

exposes the weakness in employee performance.

Firms may specify the service required but have subsequently failed to train their employees, put good processes and guidelines in action. As a result, employees are ill equipped to manage consumers needs.

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SERVQUAL

Some of the problems:

Employees lack of product knowledge and have

difficulty managing customer questions and issues

Organisations have poor human resource policies

Lack of cohesive teams and the inability to deliver

SERVQUAL

The Communication Gap: The Gap between Service Delivery and External Communications

Promises through advertising media and communication raise customer expectations.

When over-promising does not match the actual service delivery, it creates a communication gap.

Consumers disappointed because the promised service does not match the expected service and consequently may seek alternative product sources.

Casestudy: AMAZON.COM

Amazon.com provides books, movies, music

and games along with electronics, toys,

apparel, sports, tools, groceries and general

home and garden items.

a good example of an online business that

tries to close the service gaps in order to

thoroughly meet consumer expectations.

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Amazon.com

Understanding Customer Needs

From the time the consumer starts to shop at Amazons online store, Amazon will attempt to understand their expectations. From when a customer first makes a product selection Amazon creates a consumer profile and attempts to offer alternative goods and services that may delight the consumer. The longer the consumer shops at Amazon, the more the company attempts to identify their preferences and needs.

Amazon.com

Customer Defined Standards

Consumer selects the mode of delivery and the company tells them the expected number of days it will take to receive their merchandise.

E.g: standard shipping: 3-5 days. 1-2 also available. when a product is unavailable (immediately), out of print book can be located (three weeks), return items (30 days) and whether they pay return shipping costs.

These standards exist for many activities at Amazon from delivery to communication to service recovery.

Amazon.com

Service Performance

Amazon goes one step further

Orders often arrive ahead of the promised

dates;

Orders are accurate and are in excellent

condition because of careful shipping practice.

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Amazon.com

Customers can track packages and review previous orders at any time.

All its partners who sell used and new books and other related items meet Amazons high standards.

The company verifies the performance of each purchase by surveying the customer and posting scores that are visible to other customers.

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By the early 1990s: RATER model

Reliability: the ability to perform the promised service dependably and accurately

Assurance: the knowledge and courtesy of employees and their ability to convey trust and confidence

Tangibles: the appearance of physical facilities, equipment, personnel and communication materials

Empathy: the provision of caring, individualized attention to customers

Responsiveness: the willingness to help customers and to provide prompt service

Measuring service quality

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Your task...

Develop questionnaires based on RATER

model

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GAPCustomer

perception

Customer

expectation

SERVQUAL model

SERVPERF model

Service qualityCustomer

perception

Service quality strategy

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Defining strategic pathDefining strategic path


Some concepts ...

VISION

Who are we in the future?

MISSON

Why we are here? What business we are in?

QUALITY AIMS

Customer experience

CORE VALUES

values, beliefs of the organisation

KPIs


Approach

ORGANISATIONAL PERFORMANCE

PHILOSOPHY

RESULTS & MEASUREMENT

LEADERSHIP

STRATEGY PROCESS PEOPLE

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Management

Frontline

CUSTOMERS


Management

Frontline

CUSTOMERS


Service recovery

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Service recovery

A successful firm

Is responsible for the things it does

Prepare to accept failure

Act immediately

Response to individual


Service recovery

Service recovery is to transform a failed service to an

opportunity that you have never expected

Christopher Hart

moving from unsatisfaction to satisfaction after

providing a failed service. When having a mistake, firm

needs to solve that problem immediately for

customers.

Ron Zemke


Service recovery, why?

Only 4% unsatisfied customer complain.

In which, up to 95% keeps doing business

with the firm if their complaints are solved

immediately .

68% leave the firms because of ignorance .

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S.E.R.V.E. model

Say youre sorry Sorry for ...

Expedite the solution Show them that not only customers but ththe firm its self really interested in ..

Respond to the person Deal with them as an individual

Victory to the customer show that because of the customer, the

firm is sacrifying something or doing

something

Extend the outcome Other steps to show that the are satisfied


Your experience?

As a role of customer, have you experienced

a failed service?

Have the firm done anything to recover the

failed service?


SERVICE ASSURANCE

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Quality assurance, why?

Quality assurance forces you to adopt customer-focused approach

Quality assurance helps set clear standards Quality assurance helps receive feedback Quality assurance helps understand why we fail Quality assurance helps improve competiveness


Quality assurance

You dont have to wait. If thepatients in A&E department haveto wait more than 5 minutes, yourbill will be automatically reduced25%.

Hospital Mission, Log Gatos, CA


Service assurance

whenever you experience a mistakein your bank account, we willimmediately compensate and send aletter to say sorry to all relatedparties, ... Even credit $10 into youraccount

Bank of state of Maryland, MD

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Thank you!

qm-c4 - quality management in service

Documents

customer service

service quality session

service quality15

service quality assurance7

service supplier

service provider

service isalways

unsatisfied customers