Defining Service Quality

Quality is much easier to define when manufacturing tangible products. Manufacturing quality may simply involve conformance to specifications. A manufacturer can evaluate the level of a product’s quality based on what was produced relative to the design specifications. A defect occurs when a product fails to meet set specifications. The specifications come from product engineers who may be designing the product based on what market research data show that customers want. It may also come from some other type of communication that indicates customer wants and needs.

In services, evaluating the level of quality is much more elusive. Quality specifications for services come from multiple sources simultaneously, and these include the company and the individual customers. The company presents specifications as standard operating procedures.

Customers present specifications based on their personal expectations of what their service experience will be. Misalignment between company and customer specifications for the ser­vice process leads to dissatisfaction, even when the process goes exactly as it was designed. The misalignment of specifications can be avoided through communication. However, if the service performance does not address individual customer needs, the customer will not require the service.

Service quality is often defined as the satisfaction of customer expectations. One of the basic concepts of the TQM philosophy is continuous process improvement. This concept implies that there is no acceptable quality level because the customer’s needs and expectations are constantly changing and becoming more dependent.

Service quality can thus be defined as the difference between customer expectations; of the service and the perceived service. If expectations are greater than performance, then per­ceived quality is less than satisfactory and; hence, customer dissatisfaction occurs.

An American Society for Quality survey on end-user perceptions of improvement factors that influenced purchase showed the following rankings.

• Performance
• Features
• Service
• Warranty
• Price
• Reputation

The factors of performance, features, service and warranty are part of the product or ser­vice quality. Therefore, it is evident that product quality and service are more important than the price. Organizations that focus on improving the quality of service succeed in the long run. Box 16.1 discusses service quality at Kingfisher Airlines.

Box 16.1 Service Quality at Singapore Airlines (SIA)

Singapore Airlines is a global company dedicated to providing air transport services of the highest quality. Singapore Airlines (SIA) is consistently recognized as the world’s best airline. It is regularly voted for ‘best business class’, ‘best cabin crew service’, ‘best in-flight food’, ‘best for punctuality and safety’, ‘best for business travellers’, ‘best air cargo carrier’, and ‘Asia’s most admired company’. As well as being the ‘best’, SIA is also one of the most profitable airlines. The company’s senior manage­ment explains how their customer service advantage has been maintained, revealing that customer satisfaction need not necessarily be traded off for profitability.

What really helps the airline stand apart is not the seats or the food or even the entertainment (though it has all that), but the service it provides for its customers. People who work for the airline are trained to treat passengers with respect and care—something that is increasingly unusual these days. Profitable every year since the beginning, Singapore Airlines (SIA) frequently wins interna­tional awards for top customer service and in-flight quality. Here’s how they do it:

1. Clarity and commitment
2. Continuous training
3. Career development
4. Internal communication
5. Consistent external communication
6. Connection with customers
7. Benchmarking
8. Improvement, investment, and innovation
9. Rewards and recognition
10. Professionalism, pride, and profits

1. Performance

Performance involves “fitness for use.” This indicates that the product and service is ready to be used by the customer at the time of sale. Other considerations are:

• Availability, which is the probability that the product will operate when needed.
• Reliability, which is freedom from failure over time.
• Maintainability, which is the ease of keeping the product operational.

2. Features

The identifiable features or attributes of a product or service are psychological, time- oriented, contractual, ethical and technological. Features are secondary characteristics of a product or service. For example, the primary function of an automobile is transportation whereas the stereo system fitted in a car is a secondary characteristic and is termed a feature.

3. Service

Services are emphasized to give customers added value. Customer service is intangible and cannot be quantified. It is easier to achieve product excellence than provide excellent cus­tomer satisfaction.

4. Warranty

The warranty of a product represents a commitment to guarantee a level of service sufficient to satisfy the customer. The warranty of a product represents an organization’s public prom­ise of product quality with a guarantee to give customer satisfaction.

5. Price

Today’s customers are willing to pay a higher price to obtain value. Customers are constantly evaluating the products and services of an organization against those of its competitors to determine who provides the greater value. However, in our highly competitive environment, each customer’s concept of value is continuously changing. Everyone having contact with the customer must make ongoing efforts.

6. Reputation

Most of us find ourselves rating organizations by our overall experience with them. Total cus­tomer satisfaction is based on the entire experience with the organization and not just the prod­uct. Customers are willing to pay a premium for a trusted brand name, which often becomes part of a customer’s life. It cost five times more to win over new customers than it does to retain an existing customer. An effective marketing retention strategy is achieved through the use of feedback gathered using information-collecting tools.

Many service organizations such as hotels, airlines, banks and financial services have well-developed quality systems. Employees and information technology are the two main components of the service quality system.

Employees: Motivated employees are the key to improved services. The service quality sys­tems begin with a commitment to the customers. Customers evaluate a service primarily by the quality of human contact. Research has demonstrated that when a service employee’s job satisfaction is high, customer satisfaction is high, and that when job satisfaction is low, customer satisfaction is low. Many service companies act on the motto “If we take care of our employees, they will take care of our customers.” For example, ICICI OneSource is able to improve service quality because of its focus on employee recruitment, training and promo­tion programmes.

The Taj group of hotels is a service company with an exemplary focus on its people. All employees are treated just as guests would be treated. The company’s focus is on developing a skilled and empowered workforce operating with joy and pride by ensuring that everyone knows what they are supposed to do, by monitoring how well they do it and by providing the authority to make changes as necessary.

Information technology: Information technology is essential for quality in modern service organizations because of the high volumes of information they must process and because customers demand service at ever-increasing speed. Information technology incorporates computing, communication, data processing and various other means of converting data into useful information. The intelligent use of information technology not only leads to improved quality and productivity, but also to competitive advantage, particularly when technology is used to better serve the customer and to make it easier for customers to do business with the company.

Many service industries exploit information technology to improve customer service. One way of gaining a competitive edge is by differentiating the services provided to customers. For example, there has been a tremendous improvement in the service levels of banks after the advent of ATMs and online banking services. Oberoi Hotels has used IT effectively to improve service quality. IT has been used to create a database of all their guests and their preferences. The knowledge about individual customer preferences, difficulties encountered during their previous stays, details about the family and personal interests and preferred credit cards is stored in the database accessible to every hotel in the group. This guest profiling system allows each customer to be treated as an individual, and it gives front-desk employees immediate access to information such as whether the guest smokes, whether he or she prefers scented or unscented soap and what kind of pillow he or she prefers.

7. Dimensions of Service Quality

Customers do not perceive quality in a one-dimensional way, but rather judge quality based on multiple factors relevant to the context. There are five specific dimensions of service qual­ity that apply across a variety of service contexts; they are reliability, responsiveness, assur­ance, empathy and tangibles. These are explained below:

Reliability: It is defined as the ability to perform the promised service dependably and accrately. Reliability means that the company delivers on its promises about providing service, delivery, pricing and problem resolution. Customers want to do business with companies that keep their promises, particularly promises about the service outcomes and core service attributes.

Responsiveness: This dimension emphasizes attentiveness and promptness in dealing with customer requests, questions, complaints and problems. It is the willingness to help cus­tomers and to provide prompt service. Responsiveness is communicated to customers by the length of time they have to wait for assistance, or answers to questions or attention to problems. It also captures the notion of flexibility and ability to customize the service to customer needs.

In order to excel in the dimension of responsiveness, a company must be certain to view the process of service delivery and the handling of requests from the customers’ point of view rather than from the company’s point of view. To distinguish themselves on the respon­siveness front, companies need responsive front-line people in all contact positions and well-staffed customer service departments.

Assurance: It is defined as employees’ knowledge and courtesy and the ability of the firm and its employees to inspire trust and confidence. Assurance is likely to be particularly important for services that the customer perceives as involving high-risk and/or about which they feel uncertain with regard to their ability to evaluate outcomes. For example, medical, banking, insurance, brokerage and legal services.

In case of a professional service provider, a visible evidence of degrees, honours and awards and special certifications may give a new customer confidence in a professional service provider. In case of insurance companies, trust and confidence are embodied in the organization itself. In case of insurance agents, securities brokers or counselors, public rela­tions officers, the company seeks to build trust and loyalty between key contact people and individual customers. In this case, trust and confidence is embodied in the person who links the customer to the company.

Empathy: It is defined as the caring, individualized attention that the firm provides to its customers. The essence of empathy is conveying, through personalized or customized ser­vice, that customers are unique and special.

Tangibles: It is defined as the appearance of physical facilities, equipment, personnel and communication materials. These provide physical representations or images of the e-service that new customers and existing customers will use to evaluate quality. Although tangibles are often used by service companies to enhance their image, provide continuity and signal quality to customers, most companies combine tangibles with another dimension to create a service quality strategy for the firm.

8. Process of Service Quality Management

1. Setting the right standard: It is necessary to have the right standard for service quality or else the quality assurance process will deliver inappropriate levels of service. Quality stan­dards are not just related to manufacturing, but cover all other functions.
2. Implementing quality service: The implementation process involves total commitment from all the levels of the organization. Team efforts play an important role. Effective imple­mentation of service quality is possible through excellent internal programmes such as TQM.
3. Monitoring service quality: Some of the tools and techniques that are used to monitor service quality are statistical tools, quality function deployment, internal performance anal­ysis and customer satisfaction analysis.

Box 16.2 discusses the measures taken by Meenakshi Mission Hospital and Research Centre to ensure service quality.

Meenakshi Mission Hospital and Research Centre (MMHRC) is the first hospital in India to set up a service quality department. The organization is focused towards patient care. Some of the quality­conscious approaches adopted by the hospital are:

Quality Management System

Customer satisfaction and continual improvement are given priority with ISO 9001:2000 set objectives. Around 115 departments are audited once every four months.

Feedback Solutions

The hospital has a feedback system in place to measure the quality of service rendered. Feedbacks are important tools to measure the services rendered. The ward secretaries administer a prescribed format when the patient is discharged after their stay at MMHRC. The quality service department analyses and interprets customer satisfaction and amicably resolves the customer complaints. Minimization of customer complaints and speedy remedial actions are the quality parameters set for this department.

Kaizen Day

A “Kaizen day” is organized once in four months. The main reason for the Kaizen day is to cel­ebrate quality failures through well-enacted role-plays, which are powerful tools to change atti­tudes. Employees are encouraged to discuss the root causes for failures in detail to prevent such happenings in future. Various awards such as Extra mile, Best Employee and Spark Master Award are given to the employees.

Thank you Board

The appreciation given by the patients are posted on a wall named the “Thank you wall.” This is an important source of motivation for the employees.

9. Tools Used for Determining Customer Expectations

A variety of tools are available to determine customer expectations. Some of them are cus­tomer satisfaction surveys, employee feedback, focus groups, toll-free telephone numbers, report cards and the Internet. They are explained below:

Customer satisfaction survey: Customers are essential for the survival of businesses. The best way to find out whether customers are satisfied is to ask them. Organizations need to retain existing customers while targeting new customers. Measuring customer satisfaction provides an indication of how successful the organization is at providing products and/or services to the market. The best time to conduct a customer satisfaction survey is when the experience is fresh in their minds. The following questions may be asked:

• How satisfied are you with the purchase you made (of a product or service)?
• How satisfied are you with the service you received?
• How satisfied are you with our company overall?
• How likely are you to buy from us again?
• How likely are you to recommend our products/services to others?
• How likely are you to recommend our company to others?

There are many ways to ask customers whether they are satisfied with the company, its products, and the services they have received. Customers can be met face-to-face, they can be called on the phone and they can be mailed a questionnaire, etc.

An effective customer satisfaction survey programme should focus on measuring cus­tomer perceptions of how well the company delivers on the critical success factors and dimensions of the business. These usually include factors such as service promptness, staff responsiveness and an understanding of the customer’s problem.

The most important thing about conducting a customer satisfaction survey is what the company does with the data collected. Key driver analysis is the study of the relationships among many factors to identify the most important ones. Key driver analysis has many applications. One of the most common is in the area of customer satisfaction and loyalty.

The answers obtained from different customers must be compiled. The company needs to look for trends and differences by region and/or product. The most important thing is to act on the information. The company needs to fix the things the customers have com­plained about, investigate their suggestions, and improve itself and its products in those areas that mean the most to the customers. The company also needs to give feedback to the customers stating that their answers were appreciated.

Employee feedback: Employees are often an untapped source of information. Employees can offer insight into conditions that inhibit service quality in the organization. Although cus­tomer research reveals what is happening, employee research reveals why it is happening. Employee feedback should be proactively solicited.

Focus groups: A focus group is a research method used to find out what the customers are really thinking. A group of customers is assembled in a meeting room to answer a series of questions. A skilled moderator, who probes into the participants’ thoughts, ideas, percep­tions, or comments, asks carefully structured questions. The moderator has a clear under­standing of the type of information wanted and a plan for obtaining it. Meetings are designed to focus on current, proposed and future products and services. The people selected to par­ticipate have the same profile as the customers that the organization is trying to attract. As an incentive to participate, these people are reimbursed for their time. Focus groups are some­times used internally in organizations to examine internal issues.

Toll-free telephones numbers: Toll-free service phone numbers are an effective technique for receiving complaint feedback. Organizations can respond faster and more cheaply to the complaint. Such a number does not, however, reach those who have decided not to buy the product or those who have discovered some likable features in a competitor’s product.

Report card: The report card is a very effective information-gathering tool. It is usually sent to each customer on a quarterly basis. The data are analysed to determine areas for improvement.

The Internet: Some managers are beginning to monitor discussions that take place on the Internet to find out what customers are saying about their products. Internet users frequently seek advice regarding their everyday activities or activities related to specific interests, hob­bies or sports. News groups, electronic bulletin boards and mailing lists can be scanned using key word searches, if one knows that a company’s product is of interest to participants in cer­tain activities, hobbies or professions. Ideally, messages that compare a company’s products with those of its competitors can be uncovered. Though it can be a source of creative ideas, one of the drawbacks of monitoring Internet conversations is that the conversations can be unfocussed.

Source: Poornima M. Charantimath (2017), Total Quality Management, Pearson; 3rd edition.