Measuring and Improving Service Quality

Tangible products tend to have concrete specifications with objective ways to measure adherence to those specifications. Measuring the quality of the products is typically done by the quality assurance or quality control function.

When it comes to services however there are some challenges posed by their intangible nature. When purchasing services the customer is usually interested in the outcome or experience being provided. This means that the quality of the service is based on an subjective evaluation from the point of view of the customer. This makes it more difficult for the service provider organization to objectively measure service quality. These challenges however can be overcome through a structured approach to measuring, analyzing and improving service quality.

The first step of improving service quality is to start measuring service quality; it is hard to improve that which is not measured. The second step is to start identifying gaps between the customers’ perception of service quality and the service provider’s desired level of performance. The final step is to use this new found information to look for ways to improve service quality.

Measuring Service Quality

When it comes to ensuring service quality there are two important aspects to consider: the customer’s expectations and the customer’s perception of the performance. If the perceived performance exceeds expectations, the customer can be considered satisfied. If the expectations are not met, the customer will typically be dissatisfied.

These expectations and the resulting perception of performance can be analyzed along five dimensions: responsiveness, assurance, tangibles, empathy and reliability.

Responsiveness refers to how promptly the service provide is able to respond to the needs of the customer.

Assurance is the level of confidence the customer has that the service will be performed adequately.

Tangibles refers to the physical aspects involved in the rendering of services. This includes the facility, equipment and personnel that are performing the services.

Empathy is the service provider’s sense of caring and understanding of the customer and their needs.

Reliability is the ability of the service provider to consistently provide services dependably and accurately compared to what was promised.

These five dimensions are part of the RATER model, which originated from the SERVQUAL service quality framework. This framework was developed in 1977 by Zethaml, Parasuraman, and Berry. This was the most complete attempt at building a framework for thinking about and measuring service quality. It originally used ten aspects of service quality: competence, courtesy, credibility, security, access, communication, knowing the customer, tangibles, reliability, and responsiveness. In 1988 seven of these were collapsed into assurance and empathy, leading to the simplified dimensions found in RATER.

These dimensions are not completely independent. For example, the quality of the facilities, considered under tangibles, can have an affect on the customer’s level of confidence, considered under assurance. They are also not necessarily equal in importance. The importance of each dimension may depend on the specific services being provided as well as on the specific customers and their needs and expectations.

This leads to some challenges with using SERVQUAL as a quantitive model for measuring service quality. But the dimensions provide a useful qualitative model for analyzing and improving service quality.

Service Quality Gaps

With a framework in place to analyze customer expectations and perceptions of service quality, the next step is to look for gaps between expected performance and perceived performance.

In order for the service provider to satisfactorily perform services it must understand customer expectations, be able to perform according to those expectations and communicate effectively with the customer throughout the entire process. Each customer’s expectations will be influenced by the provider’s communication as well as by other external factors, including previous experiences and input from other customers.

There can be gaps during each one of these steps. The service provider organization may fail to understand customer expectations. Even if the expectations are understood, the provider may fail to translate those expectations into adequate service quality specifications. Even if the service quality specifications are adequate, the organization may fail to deliver according to those standards. Lastly, there may be a mismatch between what the organization is able to achieve and what it is communicated to the customer. The combined gaps in any of these steps will ultimately create a gap between what customers expect and how they perceive the organization’s performance.

The Management Perception Gap

A gap between customer expectations and management’s understanding of those expectations can arise due to insufficient market research or management that is too far removed from front line customer interaction.

The Quality Specification Gap

A gap between management’s understanding of customer expectations and the service quality specifications of the organization can arise due to a lack of standardization, insufficient planning or a lack of commitment to service quality.

The Service Delivery Gap

A gap between service quality standards and actual service delivery can arise due to lack of teamwork, low morale, ineffective management or insufficient capacity to meet demand.

Marketing Communication Gap

A gap between actual service delivery and the promised service delivery can arise due to inadequate communication between service delivery and sales or marketing or failure to manage customer expectations throughout the service delivery process.

Perceived Service Quality Gap

The overall gap between expected service and the perceived level of service can usually arise due to the previous four gaps combined with the uniqye background and previous experiences of each customer.

Improving Service Quality

The actual steps required to improve service quality will depend on the specific situation, but they can be grouped into three categories: understanding, performance, and communication.

The best way to improve understanding of customer needs and expectations is to increase the amount of time that members of the organization, including management, spend observing and interacting with customers. This can include customer visits and shadowing those performing front line services. Customer surveys can also be used to collect information, although surveys do not remove the need for observing and interacting with customers directly.

Internally, customer personas can be built to help everyone in the organization try to visualize and understand one or more stereotypical customers. This can include information about the customer’s background, needs and expectations. Exercises can be performed where employees take turns trying to argue from the customer’s point of view.

Improving performance will depend on the specific services being performed. The approaches however fall into two categories. One approach is to invest in creating service quality standards and developing rigurous training so that all employees understand how to properly perform services. It is also important for management to observe how services are being performed in order to identify gaps in service quality standards or additional training opportunities. This is often the approach selected by large organizations and when done properly it can lead to consistent service quality.

The other approach is to hire great people, work hard to retain and motivate them, coach them in areas where they need improvement, and give them the freedom to delight customers. With this approach it is particularly important for management to be intimately familiar with employees and the work they perform in order to be able to properly identify coaching opportunities. This approach can work particularly well for small organizations who may opt to do this instead of investing in standards and training. But relying solely on this approach can be difficult as the size of an organization increases. It is important to find the right balance between these two approaches.

Communication can easily undo all of the hard work put into improving understanding and performance. When it comes to improving communication, as it relates to service quality, it is important to make sure that communication to customers is prompt, that expectations are properly set up front, and that any changes or deviations are communicated as soon as possible. All communications should reflect an understanding of the customer’s needs and expectations and consider the organization’s ability to perform according to those expectations.

Summary

Improving service quality requires measuring service quality, identifying gaps, and implementing measures to close those gaps. RATER (responsiveness, assurance, tangibles, empathy and reliability) provides a useful model for measuring service quality. The service quality gaps (management perception, quality specification, service delivery, marketing communication, and perceived service quality) provide a conceptual model for thinking about where the organization is falling short in meeting customer expectations. Improvements to service quality can be categorized into three groups, understanding, performance and communication.

As long as the organization is able to properly understand the needs of the customer, perform according to those expectations and communicate effectively throughout the process it is likely to find that the customers’ perception of the service performance is aligned with the customer’s expectations and that customers are therefore satisfied with the service quality of the organization.

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