Service Marketing 3rd Set a

Managing Service Quality and Service Recovery

Improving Service Quality and Reducing Gaps

Learning Objectives set - 1

• Define service quality

• Explore key tools for measuring and improving productivity

What Is Service Quality?

Components of Quality: Service-based

https://youtu.be/ym9gMC-Bv80

Other Considerations in Service Quality Measurement

• In uncompetitive markets or in situations where customers do not have a free choice,

researchers should use needs or wants as comparison standards

- Time constraints
 • Services high in credence characteristics may cause consumers to use process factors and
tangible cues as proxies to evaluate quality—halo effect

- Process factors: Customers’ feelings

The Gaps Model—A Conceptual Tool to Identify and Correct Service Quality Problems

Seven Service Quality Gaps

Prescriptions for Closing the Seven Service Quality Gaps

1. Knowledge gap: Learn what customers expect

2. Standards gap: Specify SQ standards that reflect expectations

3. Delivery gap: Ensure service performance meets standards

4. Internal communications gap: Ensure that communications promises are realistic

5. Perceptions gap: Educate customers to see reality of service quality delivered

6. Interpretation gap: Pretest communications to make sure message is clear and unambiguous

7. Service gap: Close gaps 1 to 6 to meet customer expectations consistently

Composition of FedEx’s Service Quality Index—SQI

Tools to Analyze and Address Service Quality Problems

• Fishbone diagram

- Cause-and-effect diagram to identify potential causes of problems

• Pareto Chart

- Separating the trivial from the important. Often, a majority of problems is caused by a
minority of causes (i.e. the 80/20 rule)

• Blueprinting

- Visualization of service delivery, identifying points where failures are most likely to
occur

Cause-and-Effect Chart for Flight Departure Delays

Case: Analysis of Causes of Flight Departure Delays

Blueprinting

• Depicts sequence of front-stage interactions experienced by customers plus supporting

backstage activities

• Used to identify potential fall points—where failures are most likely to appear

• Shows how failures at one point may have a ripple effect later

• Managers can identify points which need urgent attention

- Important first step in preventing service quality problems

Achieving Service Recovery and Obtaining Customer Feedback

Learning Objectives set - 2

• Uncover customer complaining behaviour

• Design effective service recovery strategies

• Create institutionalized systematic learning from feedback

https://youtu.be/2O_30zbjYv4

Customer Complaining Behaviour Customer Response Categories to Service Failures

Customers Often View Complaining as Difficult and Unpleasant

1 - Source: Courtesy of Images.com.

Three Dimensions of Perceived Fairness in Service Recovery Process

 2 - Source: Tax and Brown

Customer Responses to Effective Service Recovery

Importance of Service Recovery

• Plays a crucial role in achieving customer satisfaction

• Tests a firm’s commitment to satisfaction and service quality

- Employee training and motivation is highly important

• Impacts customer loyalty and future profitability

- Complaint handling should be seen as a profit centre, not a cost centre

The Service Recovery Paradox

• Customers who experience a service failure that is satisfactorily resolved more likely to make
future purchases than customers without problems (Note: not all research supports this
paradox)

• If second service failure occurs, the paradox disappears—customers’ expectations have been
raised and they become disillusioned

• Severity and “recoverability” of failure (e.g., spoiled wedding photos) may limit firm’s ability to
delight customer with recovery efforts

• Best strategy: Do it right the first time

Principles of Effective Service Recovery Systems

Components of an Effective Service Recovery System

Strategies to Reduce Customer Complaint Barriers

How to Enable Effective Service Recovery

• Be proactive—on the spot, before customers complain

• Plan recovery procedures

• Teach recovery skills to relevant personnel

• Empower personnel to use judgment and skills to develop recovery solutions

How Generous Should Compensation Be?

• Rules of thumb for managers to consider:

- What is positioning of our firm?

 - How severe was the service failure?

- Who is the affected customer?

Learning from Customer Feedback

Key Objectives of Effective Customer Feedback Systems

• Assessment and benchmarking of service quality and performance

• Customer-driven learning and improvements

• Creating a customer-oriented service culture

Customer Feedback Collection Tools

• Total market surveys

• Post-transaction surveys

• Ongoing customer surveys

• Customer advisory panels

• Employee surveys/panels

• Focus groups

• Mystery shopping

• Complaint analysis

• Capture service operating data

Key Customer Feedback Collection Tools: Strengths and Weaknesses

Entry Points for Unsolicited Feedback

• Frontline employees
 • Intermediaries acting for original supplier

• Managers contacted by customers at head/regional office

• Complaint cards deposited in special box or mailed

• Telephone or e-mail

• Complaints passed to company by third-party recipients

• Disseminate the information to relevant parties to take action Immediately

• Track over time

https://youtu.be/nNc_zoHi3AA

Summary

• Customer can complain by taking public action, private action or no action at all

• Components of an effective recovery system include:

- Doing it right the first time

- Effective complaint handling

- Identifying service complaints

- Resolving complaints effectively

- Learning from the recovery experience

• Institutionalized systematic learning from feedback delivers valuable feedback to management

Thank you!