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Unit-Iv Service Performance: Evaluating Success of Service Offering

1) Service quality is evaluated based on moments of truth with customers and five key dimensions: reliability, responsiveness, assurance, empathy, and tangibles. 2) There are gaps between expected and perceived service quality, which can be addressed through various prescriptions like improving market research and communications. 3) Both soft and hard measures are used to assess service quality, with hard measures focusing on quantifiable operational processes and outcomes.

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Riya Kaushik
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143 views22 pages

Unit-Iv Service Performance: Evaluating Success of Service Offering

1) Service quality is evaluated based on moments of truth with customers and five key dimensions: reliability, responsiveness, assurance, empathy, and tangibles. 2) There are gaps between expected and perceived service quality, which can be addressed through various prescriptions like improving market research and communications. 3) Both soft and hard measures are used to assess service quality, with hard measures focusing on quantifiable operational processes and outcomes.

Uploaded by

Riya Kaushik
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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UNIT-IV

SERVICE PERFORMANCE

EVALUATING SUCCESS OF
SERVICE OFFERING

1
MOMENTS OF TRUTH
➢ Each customer contact is called a moment of truth.

➢ Service provider has the ability either to satisfy or


dissatisfy customers when in contact with them.

➢ A service recovery is satisfying a previously


dissatisfied customers and create a persuasive
occasion to seek support

(1)
DIMENSIONS OF SERVICE QUALITY
➢ Reliability: Perform promised service dependably
and accurately.
▪ Example: receive e-NEWSPAPER at same time
each day.

➢ Responsiveness: Willingness to help


customers
promptly.
▪ Example: avoid keeping customers waiting for no
apparent reason.
(2)
DIMENSIONS OF SERVICE QUALITY

➢ Assurance: Ability to convey trust and confidence,


e.g., being polite and showing respect for
customer Nurse?

➢ Empathy: Ability to be approachable, e.g., being


a good listener-
Doctor?

➢ Tangibles: Physical facilities and facilitating goods,


e.g., cleanliness.
(3)
PERCEIVED SERVICE QUALITY

Word of Personal Past


mouth needs experience

Service Quality Assessment


Service Quality Expected 1.Expectations exceeded
Dimensions service ES<PS (Quality serendipity)
Reliability 2.Expectations met
Responsiveness ES~PS
Assurance Perceived (Satisfactory quality)
Empathy service 3.Expectations not met
Tangibles ES>PS
(Unacceptable quality)

(4)
SERVICE QUALITY GAP MODEL

(5)
Prescriptions for Closing the
Service Quality Gaps
1. Market Research gap: Learn what customers expect

2. Design gap: Specify SQ standards that reflect expectations

3. Conformance gap: Ensure service performance meets standards

4. Communications gap: Ensure that communications promises are realistic

5. Customer Satisfaction or Perceptions gap: Educate customers to see


reality of service quality delivered
CUSTOMER SATISFACTION

➢All customers want to be satisfied.

➢Customer loyalty is due only to the lack of a


better alternative

➢Giving customers some extra value will delight


them by exceeding their expectations and
ensure their repeat purchase

(8)
COSTS OF SERVICE QUALITY
(BANK EXAMPLE)

Failure costs Detection costs Prevention costs


External failure: • Process control • Quality planning
• Loss of future business • Peer review • Training program
• Negative word-of-mout • Supervision • Quality audits
• Liability insurance • Customer comment card • Data acquisition and
analysis • Inspection Recruitment and selection
• Legal judgments • Supplier evaluation
• Interest penalties
Internal failure:
• Scrapped forms
• Rework
Recovery:
• Expedite disruption
• Labor and materials

(10)
APPROACHES TO SERVICE RECOVERY

➢ Case-by-case approach customers complaint


individually but could lead to perception of
unfairness.
➢ Systematic response approach uses a protocol to
handle complaints but needs prior identification
of critical failure points and continuous updating.
➢ Early intervention approach attempts to fix a
problem before the customer is affected.
➢ Substitute service approach allows rival firm to
provide service but could lead to loss of customer.

(11)
MEASURES OF SERVICE QUALITY

Soft Measures Hard Measures


▪Not easily observed, must be ▪Can be counted, timed,
collected by talking to customers,
employees or others or measured through
▪Provide direction, guidance and audits
feedback to employees on ways
to achieve customer satisfaction ▪Typically operational
▪Can be quantified by measuring processes or outcomes
customer perceptions and beliefs
▪Standards often set
▪e.g., SERVQUAL (RATER-
Reliability, Assurance, Tangibles, with reference to
Empathy, Responsiveness), percentage of occasions
surveys, and on which a particular
customer advisory panel measure is achieved

(14)
HARD MEASURES OF SERVICE QUALITY

➢ Service quality indexes


▪ Embrace key activities that have an impact on customers
➢ Control charts to monitor a single variable
▪ Offer a simple method of displaying performance over
time against specific quality standards
▪ Enable easy identification of trends
▪ Are only good if data on which they are based are
accurate
➢ FedEx: One of the first service companies to understand
the need for an index of service quality that embraced
all the key activities that affect customers

(16)
UNDERSTANDING CUSTOMER RESPONSES TO
SERVICE FAILURE

➢ Who is most likely to complain? More affluent


➢ Where do customers complain? Telephone, Net,
Social Media
➢ What do customers expect once they have made a
complaint?
Quick response, systemic acceptance, & Procedural,
interactional, and outcome justice

(21)
SERVICE RECOVERY
➢ Service Recovery
▪ Plays a crucial role in achieving customer satisfaction by testing a
Firms commitment to satisfaction and service quality
▪ Impacts customer loyalty and future profitability
▪ Severity and “recoverability” of failure (e.g. late arrival of birthday
gift or your favorite Saree spoilt at laundry) may limit firm’s ability to
delight customer with recovery efforts
▪ Service Recovery Paradox: Customers who experience a service failure that
is satisfactorily resolved may be more likely to make future purchases than
customers without problems
▪ If second service failure occurs, the paradox disappears
▪ Best Strategy: Do it Right the First Time

Best Strategy: Do it Right the First Time


(23)
COMPONENTS OF AN EFFECTIVE
SERVICE RECOVERY SYSTEM
Do the job right
the first time
+ Effective Complaint Handling = Increased
Satisfaction and
Loyalty

Conduct research
Monitor complaints
Identify Service Complaints
Deǀelop ͞CoŵplaiŶts as
OppoƌtuŶity͟ culture

Develop effective system and


Resolve Complaints Effectively training in complaint handling

Learn from the


Recovery Conduct root cause analysis
Experience

Close the loop via feedback


(24)
STRATEGIES TO REDUCE CUSTOMER
COMPLAINT BARRIERS

(25)
HOW TO ENABLE
EFFECTIVE SERVICE RECOVERY

➢Methods:
▪ 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

(26)
SERVICE GUARANTEES HELP PROMOTE AND
ACHIEVE SERVICE LOYALTY

➢ Force firms to focus on what customers want

➢ Set clear standards

➢ Highlight cost of service failures

➢ Help firm identify and overcome fail points

➢ Reduce the risk of purchase decision and build long-term

(27)
HOW TO DESIGN SERVICE GUARANTEES

➢ Unconditional

➢ Easy to understand and communicate

➢ Meaningful to the customer

➢ Easy to invoke

➢ Easy to collect on

➢ Credible

(28)
OBJECTIVES OF CRM SYSTEMS

➢ Data collection
▪ Customer data such as contact details, demographics,
purchasing history, service preferences
➢ Data analysis
▪ Data captured is analyzed and categorized
▪ Used to tier customer base and tailor service delivery
accordingly
➢ Sales force automation
▪ Sales leads, cross-sell and up-sell opportunities
effectively identified and processed
▪ Track and facilitate entire sales cycle

(9)
OBJECTIVES OF CRM SYSTEMS

➢ Marketing Automation
▪ Mining of customer data enables the firm to target its
market
▪ Goal to achieve one-to-one marketing and cost savings
▪ Results in increasing the ROI on its marketing
expenditure
▪ Enables the assessment of the effectiveness of
marketing campaigns through the analysis of
responses
➢ Call center Automation
▪ Call center staff have customer information at their
fingertips resulting in improved service levels to
customers.
▪ Caller ID and account numbers allow call centers to
identify the customer tier the caller belongs to, and to
tailor the service accordingly.
(10)
DEFINING A CRM STRATEGY

➢ How should our value proposition change to increase


customer loyalty?
➢ How much customization or one-to-one marketing and
service delivery is appropriate and profitable?
➢ What is incremental profit potential of increasing share-
of-wallet with current customers? How much does
this vary by customer tier and/or segment?
➢ How much time and resources can we allocate to CRM
right now?
➢ If we believe in customer relationship management,
why haven’t we taken more steps in that direction in the
past?
➢ What can we do today to develop customer
relationships without spending on technology?
(17)

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