What is Service Quality?
Service quality refers to the degree to which a service meets or exceeds customer expectations. It is a measure of how well a service is delivered and how it satisfies customers’ needs and desires. Service quality is often assessed based on several dimensions, including reliability, responsiveness, assurance, empathy, and tangibles.
Table of Content
- 1 What is Service Quality?
- 2 Concept of Service Quality
- 3 Dimensions of Service Quality
- 4 Defining Service Quality Factors
- 5 Delivering and Measuring Service Quality
Concept of Service Quality
A customer made a purchase at XYZdepartmental store and headed to his car. Of the three packages he had purchased, he forgot one at the store and left. The customer returned in a short while to claim the package, but it was gone. He checked with security to see if someone had found the package, but no one had.
As a gesture of goodwill, the store head replaced the products the customer had lost free ofcharge. Can you imagine how pleasantly surprised the customer must have been? He must be extremely delighted with the service experience that he received at the store.
From the example given above, you may conclude that service quality relates to providing a total experience rather than only basic services. You know that service is characterised as intangible and perishable. However, the effects of experiences generated by high quality service encounters are recollected by customers for a long time.
This not only helps in retaining customers by increasing their loyalty, but also creates a positive word of mouth that can bring in more customers.
The following are some standard definitions of quality:
- According to ISO 9000, Quality is a degree to which a set of inherent characteristics fulfils requirements.
- Quality is a key requirement in every field. According to quality guru Joseph Juran, the term ‘quality’ implies fitness foruse, which depends on providing products or services to customers as per their expectations
- According to Philip B. Crosby, quality is conformance to requirement.
- According to Paraguayan and Berry, quality is exceeding what customers expect from the service.
- According to Garvin, quality can be defined from different perspectives: user-based, product-based, and manufacturing-based, value-based and transcendent view.
Service quality refers to the assessment of how services are delivered to the client and whether or not they conform to the customers’ demand. Quality services have a significant impact on business performance, customer satisfaction and profitability. For example, a restaurant providing good quality food and services attracts more customers than one that provides good food, but poor quality of service.
Services are usually provided directly to customers – for example, in healthcare and education. For this reason, they require customer participation during performance. For example,service providers interact with customers when styling their hair, serving meal, delivering a lecture or opening a bank account. Therefore, service providers should be friendly, competent and responsive.
Recognising that customer participation is required during the delivery of services and ensuring high service quality is a key differentiator in the market place, as customers take into account reliable and responsive services while making a purchase decision.
In order to satisfy customers, organisations are required to measure the existing and desired quality of services. Service quality can be measured by determining the difference between service expectations and services actually experienced by customers. Customers have certain expectations from services. If customers experience the same service as they expect, the difference will be zero and the service quality is said to be good. The higher the difference, lower will be service quality.
Services are designed to deliver maximum customer satisfaction so that a customer feels delighted and makes repeat purchases. However, an excellent service can be delivered only if a service organisation understands what the customer actually wants or expects from a service package.
For this, it is of utmost importance to translate customer needs, wants and expectations into a detailed service design and process description. Such detailed list is called a service specification document, which includes details such as customer expectations, technical specifications, quality specifications, infrastructure specifications, etc.
Dimensions of Service Quality
Customers’ expectations from a service largely depend on their past experience, their requirements and word-of-mouth publicity. When customer expectations are different from the actual service provided, it may create a gap or difference that may affect the overall quality of service. A service gap refers to the difference in the expected level of service and the actual level ofservice delivered.
In the present competitive scenario, customers have a large number of options to switch to. If a service gap remains for a long period of time, there are high chances that an organisation may lose its customers.
Therefore, it is crucial for an organisation to keep check on service gapsand maintain consistent quality. This can be possible if an organisation takes into account 10 dimensions of quality while delivering services.
Let us discuss these dimensions of service quality in detail.
In literal terms, competence refers to the possession of essential skills and knowledge required to perform something successfully. In the context of services, competence refers to the efficiency of a service to attain maximum customer satisfaction.
It is one aspect that creates a large difference between two similar services. For example, competence of employees in handling customers at retail stores, especially in adverse situations like customer grievance, may help the store to maintain its image and retain the customer.
Lack of competence may not only affect a business negatively, but also harm the organisation’s market position and image. An organisation may develop competence in several areas, including knowledge and skills of employees, operational support system and research abilities of the organisation.
Courtesy refers to the politeness, consideration and friendliness of service personnel towards a customer. If service personnel are humble, it creates an impression of high service quality in the minds of customers. For example, when a customer visits a retail store while selecting products, a service personnel can help the customer in making the selection by asking for his/ her requirements.
Similarly, a polite greeting (‘good morning sir’ or ‘good evening ma’am’) by store employees also instils a positive image of the store in the minds of customers.
It includes factors such as reliability, trust and honesty. In other words, customers consider a service provider credible if it attaches a high priority to customers’ interests. Customers usually associate the credibility factor with the name of the organisation or brand, reputation of the organisation and characteristics of employees.
For example, Microsoft Corporation is an American multinational software corporation that develops, manufactures, licenses and supports a variety of products and services related to computing. It is considered to be one of the world’s most credible organisations.
It refers to the customers’ feeling of being free from danger, risk or doubt. In other words, it includes physical safety, financial security and confidentiality that a service provider provides to a customer; thereby building the trust ofcustomers.
For example, no customer would like to deal with an insurance company that cannot guarantee the safety and security of the monetary possession ofits customers.
It is customers’ approachability and ease of contact with service personnel. In other words, access includes suitable office operation hours and locations. There are various situations when a customer needs to get assistance from service providers.
For example, suppose youbuya newsmartphone bycompany A.However, you find it difficult to operate the handset. In such a situation, you may try to find a service centre of company A that can help in solving your problem.
Now, if you do not get access to such a service centre, it would create a poor impression in your mind about service quality. Today, most organisations provide 24/7 services through their call centres in order to increase customer accessibility.
Communication as a dimension of service quality refers to informing customers in a language they are able to understand, listening to them carefully and providing them required solutions. For example, various Business Process Outsourcing (BPO) units adjust their languages to the varying needs of their customers.
Service organisations may need to communicate with customers on various points, including explanation of the service, its cost and assurance to manage any problem that may arise.
Knowing the Customer
It means paying heed to customer needs and providing them with undivided attention. This is a part of exceeding customer expectations and delighting them. Today, most service organisations ask their customers to fill the ‘Know Your Customer (KYC)’ form which helps in identifying and verifying the identity of its customers.
Apart from this, it helps organisations to send promotional messages to customers and take their feedback, thereby improving service quality.
It encompasses all tangibles involved in the process of service delivery. It is mainly provided at the location where service is delivered to customers. Physical evidence allows customers to make judgments about the organisation.
There are certain expectations regarding the physical evidence. For example, customers want a clean, friendly environment in a restaurant. In the business class section on an airplane, customers expect a room to lie down.
It is earned when service performance is as per the promises made to customers. While determining the reliability of any service organisation, performance accuracy, updated records and properly followed schedules are taken into account.
Therefore, you can say that reliability is the ability to perform the promised service in a precise manner. For example, Domino’s Pizza, an international franchise pizza delivery corporation, is associated with the credibility of delivering pizzas in 30 minutes. In case a delivery is late, the product is provided free-of-charge.
It refers to the eagerness and enthusiasm of service personnel, which result in customers getting prompt and timely services. For example, McDonald’s, the fast food retail chain, is not only known for its speed of service, but the employees at McDonald’s are also trained to deal with customers in a friendly and professional manner.
Defining Service Quality Factors
There are many factors that affect the quality of services provided by different organisations. However, these factors differ across organisations based on the nature and size of business, target audience, etc.
Therefore, an organisation attempting to enhance its customer service should understand factors influencing service delivery. There are two major factors that influence the quality of any service organisation.
These factors are explained as follows:
Level of Service Provider’s Skill
Quality in a service organisation largely depends on the skill level of the service provider. In some service industries such as insurance, travel and tourism, etc., mediators/middlemen/agents play a major role in providing service to customers.
Such industries have a wider reach and depend largely on intermediaries as they help in providing services to customers. For this reason, many organisations outsource the customer contact function to professional organisations. This ultimately influences the quality standard ofservices.
Level of Customer Interaction
In services such as railways, telecommunications, mail delivery, etc., the interaction of the service provider with the customer is limited. On the other hand, in services such as banking, hospitality, airlines, etc., the service personnel regularly come in direct contact with customers.
In this case, as the service personnel deliver service in the presence of the customer, it becomes difficult for them to rectify a mistake without it being noticed by the customer.
Therefore, recruiting the right people, training them and constantly enforcing the organisation’s values and commitment to customer service are the basic steps that a service provider needs to take to develop and enhance service quality.
Delivering and Measuring Service Quality
Marketing efforts and high advertising expenditure can help a service organisation in attracting first-time customers. However, these new customers will not become repeat purchasers if they do not receive adequate services and are unhappy. Therefore, it is essential that services are customer oriented. For this, it is also important that the quality of services and the adjoining infrastructure is maintained at an optimum level.
A service is said to be effective if it continuously exceeds customer expectations in terms ofpositive attitudes and skills of employees, approachability for service requests and so on. To provide quality services consistently, a service provider may define various standards of service quality.
However, it is difficult to conclude whether a service meets the required quality standards or not. For this reason, organisations use different methods for measuring service quality. Such methods used for measuring service quality are discussed as follows:
This is the most common and important method for measuring the critical parameters of service quality which include reliability, assurance, tangibles, empathy and responsiveness.This model is also called the RATER model or framework. A detailed explanation ofthis model is given later in the chapter.
It refers toan activity wherein the management of a service organisation hires certain people who act as undercover customers and receive the service from their service facility. In such cases, the employees at the service facility and managers do not have any idea that the customer they are dealing with is a proxy customer sent by the service provider.
After receiving the service, the proxy customer provides his/her detailed feedback to the organisation which is used to evaluate service quality.
Post Service Rating
In this method, a customer is asked to fill up a feedback form that contains questions pertaining to the quality of service availed by the customer. The form may contain either objective or subjective questions.
At times, combinations of objective and subjective questions are also asked. The analysis of the feedback forms helps the service provider to evaluate service quality.
Objective Service Metrics
There are certain metrics that can be calculated quantitatively and help a service organisation in evaluating the quality of services. These metrics, however, should not be used in isolation.
Some examples of service metrics include:
- Volume per channel: This metric measures the number of inquiries per channel.
- First response time: This metric measures the time in which a customer receives his/her first response from the service provider.
- Response time: This metric is calculated as the average of all response times from the time a customer enquires till his/her inquiry is resolved.
- Inflow-outflow ratio: This ratio is calculated by dividing the number of enquiries pouring in (received) per unit of time by the number of enquiries resolved per unit of time.
Most organisationstoday are expanding their reach using all possible ways. One such way is mobile-based applications. Nowadays, it is quite simple to download mobile-based applications of different products and service providers.
For example, most banks have their own apps, which makes it easier for customers to avail different services provided by a bank. On the other hand, it becomes convenient for the service provider to take customers’ feedback.
Customer Effort Score (CES)
This concept suggests that customers hardly reward organisations that exceed their expectations but tend to punish organisations in case they provided bad services. The cost of delighting customers by exceeding their expectations is quite high with negligible increase in payoffs.
Therefore, it is suggested that service organisations should concentrate on providing effective processes for solving customers’ problems and grievances.
This approach also makes use of feedback forms. However, the types of questions used in forms differ. For example, a service provider should not ask “How satisfied are you with this service?”; instead they should ask “How much effort did it take youto get the solutions for your queries”.
The level of effort could vary on a scale from 1 to 10 where 1 means a little effort and 10 mean a lot of efforts. The customer effort scores are then summed up and a high effort score suggests that the customer was probably displeased with the experience.