OPSM 405 Service Management

1. Koç University OPSM 405 Service Management Class 5: Introduction to Service Quality Chapter 8 Zeynep Aksin zaksin@ku.edu.tr

2. Defining Service Quality • Specifications • Company: Standard operating procedures • Customer: Personal expectations • Misalignment of company and customer specifications can lead to dissatisfaction, even if the service is delivered as designed

3. Customer assesment of service quality:The SERVQUAL model external communication Dimensions of service quality word of mouth personal needs past experience • tangibles • reliability • responsiveness • competence • courtesy • credibility • security • access • communication • understanding • the customer expected service Perceived service quality perceived service

4. The customer gap Expected service Perceived service

5. Search-experience-credence properties Most services Most goods Clothing Jewelry Furniture Houses Automobiles Restaurant Meals Vacation Haircuts Child care TV repair Legal services Root canal Auto repair Medical diagnosis

6. Stages in consumer decision making • Need recognition: customer has a need to fulfill or problem to solve • Information search: customer seeks out information to satisfy need • Evaluation of alternatives: selects a subset of alternatives and evaluates them • Purchase: chooses brand and buys • Purchase outcome: customer evaluates choice made and decides whether it meets expectations

7. Information search for services • Typically personal sources are used: • mostly due to experience type qualities of services • Also because many services are local • Not much advertising • Postpurchase information seeking is more common • More perceived risk in purchasing services

8. Evaluation of alternatives for services • A much smaller evoked set typically • Competing services not displayed together as in supermarkets for example • Firms offering the exact same service in same locality is less common • Difficulty of obtaining sufficient purchasing information • An important contender is self-service

9. Service purchase and consumption • Mood and emotion matters • Mood and emotions may influence customer behavior • Mood and emotion bias the way customers judge service encounters • Moods and emotion may affect the way information is absorbed and retrieved

10. Postpurchase evaluation for services • Dissatisfaction may be attributed to ones self more; service customers complain less • Innovations diffuse less • Intangible so features can’t be displayed • They are typically unique to buyer so hard to generalize • Can’t test on a limited basis-can’t be sampled • New service may require behavior change which is hard to do • Service consumers tend to be more brand loyal

11. Customer assesment of service quality external communication Dimensions of service quality word of mouth personal needs past experience • tangibles • reliability • responsiveness • competence • courtesy • credibility • security • access • communication • understanding • the customer expected service Perceived service quality perceived service

12. Customer expectation levels High Ideal expectations: everyone says this restaurant is the best in town and I want to go there for my anniversary Normative should expectations: it is expensive but it should be good Experience based norms: Most times this restaurant is quite good Acceptable expectations: I expect the restaurant to be adequate Minimum tolerable expectations: I expect terrible service since the price is very low Low

13. Zone of tolerance Desired service Zone of tolerance Adequate service

14. Two important facts • Different customers have different zones of tolerance • Zones of tolerance differ by importance attributed to service dimension

15. Important questions to contemplate • Should providers underpromise? • Should companies try to delight? • Do customer expectation escalate?

16. Customer perceptions • Interaction quality+physical environment quality+outcome quality => service quality • Service quality+product quality+price => customer satisfaction • Perceived service quality is a component of customer satisfaction

17. The five dimensions of service quality • tangibles: how do I look? • reliability: am I keeping promises? • responsiveness: am I prompt and willing? • assurance: am I capable, polite, and credible? • empathy: do I care? Do I individualize?

18. Examples of five service quality dimensions

19. Recall: service encounters as foundations of service quality • Series of episodes • Simple or complex • Affects consumer body, mind, emotions • Focus on consumer, service provider, physical evidence in designing

20. Sources of pleasure displeasure in service encounters • Recovery: how employees respond to service failure • Adaptability: employee response to customer needs and requests • Spontaneity: unprompted and unsolicited employee actions • Coping: employee response to problem customers

21. Recovery: acknowledge problem, explain cause, apologize, compensate/upgrade, lay out options, take responsibility Ignore customer, blame customer, leave customer to fend for herself, downgrade, act as if nothing is wrong General service behaviors: Dos and Don’ts

22. Adaptability: recognize the seriosness of the need, acknowledge, anticipate, attempt to accommodate, adjust the system, explain rules and policies, take responsibility Ignore, promise but fail to follow through, show unwillingness to try, embarrass the customer, laugh at the customer, avoid responsibility General service behaviors: Dos and Don’ts

23. Spontaneity: take time, be attentive, anticiapte needs, listen, provide information, show empathy Exhibit impatience, ignore, yell, laugh, or swear, steal from customers, discriminate General service behaviors: Dos and Don’ts

24. Coping: listen, try to accommodate, explain, let go of the customer Take customer dissatisfaction personally, let customer dissatisfaction affect others General service behaviors: Dos and Don’ts