26 CHALLENGES IN MANAGING SERVICE QUALITY

Dr. Puja Waalia Mann

1.0 Introduction

As a consumer you expect services to offer you satisfaction of the needs at the most reasonable price. As a service manager do you think it is always possible to offer high service quality standards at the economical rates? May be you will have to think twice before agreeing to the question. That is so because it is not always feasible to offer the highest standards of quality meeting the expectations of the consumers at the lowest possible prices. There are several factors inhibiting the service managers in offering the service quality which is perceived to have satisfied the consumer’s expectations. In this module we will look at the various hindrances in the way of offering high service Quality and the means to overcome the sme to earn the competitive advantage.

1.1 Learning Objectives

In this module, you will learn:

a)      Meaning of Service Quality

b)      Meaning of Service Quality Management

c)      Challenges in Managing Service Quality

d)      Overcoming Challenges

1.2 Key Words:

Service Quality, Service Quality Management, Challenges in Service Quality management, Servqual 1.3

Introduction to Service Quality Management

The process of managing the quality of services delivered to a customer according to his expectations is called Service Quality Management. It basically assesses how well a service has been given, so as to improve its quality in the future, identify problems and correct them to increase customer satisfaction. Service quality and assessment of how well a delivered service conforms to the clients expectations. Service business operators often assess the service quality provided to their customers in order to improve their service to quickly identify problems & to better assess client satisfaction. A business with high service quality will meet customer need while remaining competitive. The aim may be achieve by understanding and improving operational process identifying problems quickly and systematically establishing valid and reliable service performance measure and thereby measuring customer satisfaction.

From the viewpoint of business service quality is an achievement in customer service which can be reflected at each service encounter. Customers forms service expectation from past experience, word of Mouth and Advertising. In general customer compare perceive service with expected service in which if the former falls short the latter feels disappointed. The Measurement of Subjective aspect depends upon conformity of expected benefit with perceived result. This in turn depends upon the customer expectation in terms of service they might receive and the service providers ability to provide the expected service.

Successful companies add benefit to their offerings that not only satisfy the customers but also surprise and delight them. Delighting customer is a matter of exceeding their expectations. Sometimes service quality may be related to service potential too. For Example, a Managers Qualification and the quickness of service and service result.

Service quality = Perception – Expectation

•  Service quality is nothing but the difference between the service expectation & service actually received by the customers.
• The Process of Managing the quality of services delivered to a customer according to his expectation is called Service quality Management. It is basically assesses how well a service has been given , so as to improve its quality in the future, identify problems and correct them to increase customer satisfaction.

1.4 Dimensions of Service Quality

Measuring of service quality relies on the customer’s perception and this could be different from the expected service. A customer expectation of a particular service is determined by factors such as recommendation, personal needs and past experience. The expected and the perceived service may sometimes not be equal and thus comes the SERVICE GAP into picture. Customers generally have a tendency compare the service they experience to the service they expect. If the experience does not match the expectation the company perceives a service gap. To determine the gap between services expected and perceived service, several models are used like the SERVQUAL model, RATER model, e-SERVICE QUALITY etc. The main dimensions of service quality determination are as follows:

• Reliability – This is the ability to perform the service dependably and accurately, as promised. In software service, it would be the correct technical functioning of the application and various features such as GUI features, billing, product information etc.
• Responsiveness – How quickly the services are rendered to the customer and the promptness of service delivery. With respect to software services, it would be the ability to respond to customer problems or give solutions.
• Assurance – This is a measure of the ability to convey trust to the customers and how well they extend the courtesy. Software assurance involves the amount of confidence the customer has in handling the software application or navigating a site, the belief he has on the information provided and its clarity, reputation etc.
• Empathy – Giving personalized attention, understanding the requirements and caring for the customers. The software service would include customized applications, one-to-one customer attention, security privacy and understanding customer preferences.
• Tangibles – The physical attributes like appearance, equipment, facilities etc. When we speak of software services, the tangibles would be aesthetics of the software application or website, navigation features, accessibility, flexibility etc.

CHECK YOUR PROGRESS

1.      What is the meaning of Service Quality Management?

2.      What are the determinants of Service Quality Management?

3.      With the help of an example, explain when does a consumer feel satisfied with the Service Quality?

4.      What is the meaning of SERVQUAL?

1.4 Importance of Service Quality Management

Service quality relates to the customer and it is important for organizations to be customer focussed in all of their activities. Many organizations find that how customers are treated is of equal importance (if not greater) in their memory than the product/service itself. We all know that it is the negative customer experiences we tend to remember rather than the positive ones! It is also more likely that it is the bad experiences we tell others (potential customers) about.

Most major companies and organizations have launched quality management and improvement programmes and committed themselves to listening to their customers. In the public sector, central government departments and agencies have adopted charters setting out standards. Local councils and health authorities have developed several initiatives – including major “cultural” change projects, quality assurance units, and increased public consultation. Generally a much greater emphasis has been placed on responding to customers in recent years.

To manage service quality, organizations need to:

·         Set objectives with precise targets.

·         Commit resources to achieving those targets.

·         Measure whether they have met their targets.

·         Review these targets.

1.5 Challenges in Service Quality Management

The task of improving service in organization is complex, it involves knowing what to do on multiple fronts such as Technology, Service System, Employee selection, Training & Education and Reward System. It involves knowing how to implement these actions and how to transform activity into sustainable development. While product quality is measured through its ability to meet the user’s requirement and the value of its features and characteristics, service quality is more of a comparison of the customer expectations and the service performance. Though the principles of improving product quality are applicable to services as well, it’s very important to know the focus areas of improvement with respect to increasing customer satisfaction when it comes to service quality management. This can be done by measuring the gap between customers’ expectations and how they perceive the services offered to them. The larger the gap size, the more improvements to be made. Dissatisfied customers hurt the long-term profits and success of service organizations due to:

(1)  failure of the customer to return for future business;

(2)  reduction in the customer’s frequency of visits; and

(3)  negative word-of-mouth advertising. Therefore, managers may consider improving not only service quality and customer satisfaction, but also perceived customer value in their offerings. Ignoring customer value may cause lowered customer satisfaction and reduced repeat business. Basically, service organizations’ efforts for improving service quality and customer satisfaction should be conducted holistically, including value enhancement. One customer’s negative experience with a service provider can be disseminated among many potential clients, which is not the case in traditional service environments. As a result, understanding the factors that influence online customer satisfaction is very important for online service providers. One of these factors is trust, which has a positive impact on customer loyalty, customer satisfaction, and perceived value. When customers cannot physically examine the quality of a service, they have a higher level of uncertainty about the purchase outcome and more hesitation in making the purchase.

Recently a number of articles have focused on the importance of Six-Sigma for services and the challenges of applying this quality improvement methodology to service operation. Service quality management is knowledge-driven, it relies on people’s continuous development, network-intense collaboration (sharing ideas and knowledge), and value co-creation to attain sustainable competitive advantage.

The Six most common myths about Six-Sigma are:

1.      It is all about Statistics.

2.      It is good Only for Manufacturing Process.

3.      It is effective in large Organization.

4.      It is the same as Total quality Management.

5.      It Requires Strong infrastructure and Massive Training.

6.      It is not cost Effective.

SERVQUAL, later called RATER, is a quality management framework. SERVQUAL was first published in 1977 by Valarie Zeithaml, A. Parasuraman & Leonard Berry to measure quality in the service sector. The SERVQUAL service quality model was developed by a group of American authors, ‘Parasu’ Parasuraman, Valarie Zeithaml and Len Berry, in 1988. It highlights the main components of high quality service. The SERVQUAL authors originally identified ten elements of service quality, but in later work, these were collapsed into five factors – reliability, assurance, tangibles, empathy and responsiveness – that create the acronym RATER.

Businesses using SERVQUAL to measure and manage service quality deploy a questionnaire that measures both the customer expectations of service quality in terms of these five dimensions, and their perceptions of the service they receive. When customer expectations are greater than their perceptions of received delivery, service quality is deemed low.

In addition to being a measurement model, SERVQUAL is also a management model. The SERVQUAL authors identified five Gaps that may cause customers to experience poor service quality. Let us discuss these Service Gaps and how can these be closed:

Gap 1: Requirements Gap– This is the first Gap discussed in the model which is the result of ignorance of marketers understanding of what the consumer desires or expects. Failure to identify the consumer’s core need for buying a service results in Requirements Gap. This gap can be addressed through the following actions:

i) Marketing research- a systematically planned and implemented marketing research can help management in identifying what the consumers seek and desire while purchasing a service.

ii) Open Communication- there should be adequate and clear communication between the consumers and the service delivery personnel on one hand and between the service delivery employees and the management on the other hand to better understand the consumer’s expectations.

iii) Consumer relations- the service transaction with a consumer should be with the view to develop a long term relationship instead of only making a one point of time sales.

iv) Managing Service recovery- this is a means of understanding the reason of dissatisfaction of an employee with a service and ensuring to offer a rectified service to the aggrieved consumer. At the same time, it is important to learn lessons from this experience so that such a deficiency of service delivery may not happen in any future service encounter.

Gap 2: Design Gap- This is the second gap which may occur due to the basic design of the service being offered to the consumer. The marketers may fail to incorporate satisfactory service standards and hence may not be able to design a quality service. This gap may be overcome by the following steps:

i)  Good Service design- The service should be clearly designed from creation to its delivery. Then the firm must work on developing a connect with the consumers perception of the service design so that the deliberately created design is positively taken by the target consumers.

ii) Adding performance standards- A good service design should be based on the performance standards desired by the consumers. Every step must be taken not to fall below the expectations of the consumers on such specified levels.

iii) Developing physical evidence- this relates to offering an appropriate service physical evidence to the consumer as this would be the only variable visible to the consumer. From here the consumer could be convinced of a quality service experience in line with his expectations.

Gap 3: Quality Specification and delivery Gap

This is the gap between service quality specification and service delivery. This gap may arise through service personnel being poorly trained, incapable or unwilling to meet the set service standard. The possible major reasons for this gap are:

· Deficiencies in human resource policies such as ineffective recruitment, role ambiguity, role conflict, improper evaluation and compensation system

·  Ineffective internal marketing

· Failure to match demand and supply

· Lack of proper customer education and training

Gap 4: Imbalance between promotional communication and internal performance

Gap 4 is the difference between service delivery and external communication. Consumer expectations are highly influenced by statements made by company representatives and advertisements. The gap arises when these assumed expectations are not fulfilled at the time of delivery of the service. For example, the hospital printed on the brochure may have clean and furnished rooms, but in reality it may be poorly maintained, in which case the patients’ expectations are not met. The discrepancy between actual service and the promised one may occur due to the following reasons:

· Over-promising in external communication campaign

· Failure to manage customer expectations

·  Failure to perform according to specifications

Gap 5: Satisfaction Gap

The satisfaction gap is between expected service and experienced service. This gap arises when the consumer misinterprets the service quality. For example, a physician may keep visiting the patient to show and ensure care, but the patient may interpret this as an indication that something is really wrong.

FIG 1: THE HIERARCHY OF CUSTOMER EXPECTATION

CHECK YOUR PROGRESS

5.      What is the meaning of Service Gap?

6.      Write a note on Satisfaction gap.

7.       With the help of an example describe the hierarchy of consumers expectations.

8.      Discuss the most significant challenge in the Service Quality Management?

Determinants

The ten determinants that may influence the appearance of a gap are:

1. Competence is the possession of the required skills and knowledge to perform the service. For example, there may be competence in the knowledge and skill of contact personnel, knowledge and skill of operational support personnel and research capabilities of the organization.

2. Courtesy is the consideration for the customer’s property and a clean and neat appearance of contact personnel, manifesting as politeness, respect, and friendliness.

3. Credibility includes factors such as trustworthiness, belief and honesty. It involves having the customer’s best interests at prime position. It may be influenced by company name, company reputation and the personal characteristics of the contact personnel.

4.  Security enables the customer to feel free from danger, risk or doubt including physical safety, financial security and confidentiality.

5. Access is approachability and ease of contact. For example, convenient office operation hours and locations.

6. Communication means both informing customers in a language they are able to understand and also listening to customers. A company may need to adjust its language for the varying needs of its customers. Information might include for example, explanation of the service and its cost, the relationship between services and costs and assurances as to the way any problems are effectively managed.

7. Knowing the customer means making an effort to understand the customer’s individual needs, providing individualized attention, recognizing the customer when they arrive and so on. This in turn helps to delight the customers by rising above their expectations.

8. Tangibles are the physical evidence of the service, for instance, the appearance of the physical facilities, tools and equipment used to provide the service; the appearance of personnel and communication materials and the presence of other customers in the service facility.

9. Reliability is the ability to perform the promised service in a dependable and accurate manner. The service is performed correctly on the first occasion, the accounting is correct, records are up to date and schedules are kept.

10. Responsiveness is the readiness and willingness of employees to help customers by providing prompt timely services, for example, mailing a transaction slip immediately or setting up appointments quickly.

1.6 Overcoming Challenges in Managing Service Quality

According to studies conducted an improvement in Service design and delivery help achieve higher levels of service quality. Sometimes a service design change and enhancement in the facilities provided may go a long way in achieving customer satisfaction. However in service delivery changes can be brought about in service delivery process with an ease, because the environment in which service delivery takes place will yield a proper interaction between customers and service providers. The relationship between the service performance measures and to determine the operational improvements that can be required to increase customer satisfaction. This is used to make improvement plans in order to increase the level of customer satisfaction. A service culture revolves around the appreciation of good service and offering good service is considered a natural part of life in the organization. Some of the values that are embedded in a service culture include joy, teamwork, integrity, excellence, social profit, innovation and respect among the employees in the organization. Developing a service culture can improve performance and create competitive advantage. However it may take a long time before it is embraced by the employees.

The priority of the service team should be collect the right information from whatever source is available with them and measure it quantitatively for better service performance. Service performance measure evaluates the current performance of the service and ensures that it is continuing to reliably meet the design specification. Customer measure indicates the impact of service performance on the customers. The correlation between the Monetary and Customer measure determine the revenue generating potential of the business. This arrangement can reveal the increase in customer satisfaction specially when the company is competing against its competitor and hence, companies can use such information for future use.

CHECK YOUR PROGRESS

9. How does Tangibility result in the service gap?
10. What are the determinants of Service Quality?
11. With the help of a suitable example, explain how you can overcome challenges in the delivery of Service Quality?
12. What is the role of competence as a challenge to Service Quality?

Conclusion

Quality is an increasingly important variable to gauge the service firm’s competitiveness. But it is not easy to either measure or ensure high quality services despite the desire of the management and the consumers. This is so, because it is important to investigate what the consumers wish to receive in a service and then design the service accordingly. This understanding of the consumer’s needs and service quality deliverability has to be shared with the service personnel so that the same level of quality is delivered at each service encounter. While there may be a number of reasons which may cause a gap of service performance, there are various other hindrances in the actual delivery of Quality service. The Service manager needs to keep these obstacles in view to design a service production and delivery plan in such a way so as to overcome the challenges.

Summary

Service Quality refers to the consumers’ perception of meeting of their expectations by a given service delivery. A service marketer may attempt to offer the best service quality, yet if the consumer does not perceive it to be so, he may fail to satisfy the consumers or make a high quality seller impression amongst the target consumers. There could be a number of reasons responsible for the failure on the part of the service manager to offer high quality services, some of which may be controllable and other may be uncontrollable. Given the understanding of the factors leading to a service gap , the service manager can put efforts to overcome these gaps. Such management of overcoming the challenges may sometimes include just eth training of the Service personnel and sometimes may need a complete overhaul in the basic service design.

Learn More:

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b) Gilbert, G.R., & Veloutsou, C. (2007). A cross-industry comparison of customer satisfaction. Journal of

Services Marketing, 20(5), 298-308.

c) Gonzálea, E.A., & Brea, J.A. (2005). An investigation of the relationship among service quality, customer

satisfaction and behavioural intentions in Spanish health spas. Journal of Hospitality & Leisure Marketing,

13(2), 67-90.

d) Ishikawa, K., “What is Total Quality Control? The Japanese Way”, Prentice Hall, 1985e) Zeithaml, V.A.,

Bitner, M.J., & Gremler, D.D. (2006). Services marketing: integrating customer focus across the firm (4th ed.,

pp.117). Singapore: McGraw-Hill