Lesson Proper for Week 13

DEFINING QUALITY IN CUSTOMER SERVICE

With customer expectations evolving so quickly, we’re often asked a basic (and
important!) question: What is quality in customer service?
Related questions often follow: Who determines what quality is? How should we
define it? What guidelines or specifications should we establish to manage and
measure it?
Given how fast services are evolving, these questions have never been as important
as now. Let’s look at what quality means and where quality standards should come
from.

Quality
The attributes of a product or service.
We’ve probably all heard or used the term quality in a general sense: “I need some
quality sports headphones.” Or, “Their service team does a quality job every time.”
What we really mean is, high quality, or exceptional quality. Quality is, simply, the
attributes of a product or service. So, to define what great quality means, we need a
point of reference.
That’s where standards come in. Standards refer to the requirements,
specifications, guidelines or characteristics established for customer service.
Standards should reflect and provide guidance on what needs to happen — what we
want to apply or replicate — across all customer interactions. They should provide a
template that leads to consistent service.

There are three major sources of input for establishing quality standards:

1. Customer expectations
One is customer expectations. With service, unlike manufacturing, there is no
tangible product. So there are many ways to approach quality in this context.
But researchers and practitioners alike agree that customer expectations
must form the basis for defining quality standards in customer service.
Accordingly, we can define service quality as “The customer’s perception of
how well our service meets his or her expectations.” Both the services we
deliver and the expectations we help to create are important aspects of
quality.
2. Standard
The requirements, specifications, guidelines or characteristics established for
customer service. (ISO)
3. Service Quality
The customer’s perception of how well our service meets his or her
expectations.
Mission, vision and values
A second source of input for establishing quality standards is the organization’s
mission, vision and values. Every organization, in any industry, whether small or
large, public or private, has a unique personality. It should be reflected in quality
standards.
The century-old financial services company Northwestern Mutual has built a brand
of safety and stability. Formal, effective professionalism matching this image is
integral to their services.
Moo.com, a London-based print-on-demand company, encourages their team to (in
their words) be passionate, lovely and ambitious. Their mantra is, “We’re not happy
until you’re happy”, and their quality standards lead to services that, like the
company name, are more playful than those of many other firms.
In both examples, quality standards create effective services that are right for these
organizations’ brands. Both have high standards. But can you imagine the customer
confusion they’d were they to swap quality standards for a day?
A company’s mission, vision and values are not standards, per se. They are
generally not specific enough. But when direction and values are inculcated into a
culture — when they are reinforced at every level — they powerfully guide decisions
and behavior. They inform the development of quality standards and make them far
easier to implement.

Stakeholders
A third source of input into quality standards are stakeholders. Stakeholder refers
broadly to anyone or any group that has an interest or concern in an organization.
Employees, shareholders, suppliers, government, industry associations, and the
community, are all stakeholders. This source of input shapes many of the quality
standards we’ll need to establish related to compliance
— those that we have to get right.
For example, various government agencies administer privacy and security
regulations in financial, healthcare and other sectors. These requirements must be
built into internal quality standards, given the risks of non-compliance.
In another example, evaluation sources in the travel sector, such as Michelin and
Forbes, rate hotels, typically up to 5 stars. The Forbes Travel Guide uses more than
800 standards as part of their assessment. Many are very specific—for example, for
a five-star rating arriving guests must be greeted and provided assistance within 60
seconds, phone calls are not to be left on hold for longer than 30 seconds without
offering a callback, and many others. Since ratings significantly influence a hotel’s
marketing and revenue, quality standards should reflect requirements aligned with
the appropriate level of service.
It’s important to remember, your agents are also stakeholders. They have incredible
insight into what customers need and want, because they spend time with them
every day. And the more involved they are in establishing your quality standards,
the greater the likelihood they’ll buy into and support them.
Effective quality standards bring together and reflect input from all three of these
sources: customer expectations, the organization’s mission and vision, and
stakeholders. Your quality standards will be unique to your organization, because
they reflect your brand and customers.

What is service quality, its determinants, features and five stars?

Service quality consists of both the quality of facilitating services as well as core
services that improves the value of core services to the customers. The businesses
that provide tangible goods render facilitating services for example, in banks
checking an account is a core service product while automated teller services
twenty-four hours telephone access to account information are all facilitating
services. Facilitating services sometimes are more valuable than core services to
the customers. For instance, the hotel may produce tangible goods in the form of
several varieties of dishes that are its core products. Quick services, cordial relation
with the customers are hotels facilitating services.

Service quality is not under estimated. Due to poor services of customers several
services operating companies lose their customers. In accordance with the studies,
it is said that a company can boost their profits by cent percent by first retaining
five percent more customers than their competitors. Companies with long term
period customers can outperform their competitors financially with more turnovers
in spite of the fact that their market share is smaller whereas unit costs are higher.
Quality is defined equally in terms of both in service products and manufactured
products. The nature of service suggests that it must respond to the customer
requirements. Customer expectations should be exceeded or met by the service.
The production of services differs from manufacturing in many ways and these
differences have noteworthy involvement in the management of service quality.

Quality is of eight proportions. They are explained by Garvin that are applicable to both
manufactured goods and services. They are as follows:
Perceived quality Conformanc
e
Aesthetics Reliabilit
Serviceability y Features or
Durability Performance characteristics

Besides the above mentioned eight proportions, services have other distinctive
proportions. They are as follows:
 Responsiveness – Will the problems that are not expected be solved by the
service personnel quickly or not?
 Convenience and acceptability – Is the service adjustable easily?
 Consistency – Are the services delivered on varying each time?
  Courtesy – Do frontline workers behave politely with customers?
 Completeness – Is the delivery of all products done?

 Timeliness – Will the package or service be delivered on time?

 Time – How much time it will take for a business to render services totally?

Ten determinants of service quality

1. Understanding – It involves knowing customers by making more efforts to
understand the customer's requirements and wants.
2. Tangibles – It encompasses the physical evidence of the service.
3. Security – It is the liberty from doubts or danger risks.
4. Credibility – It is nothing but honesty, believability and trustworthiness.

5. Communication – It is the process where the customers are informed in their

own understandable language as well as it encompasses listening to
customers. Communication means that the business has to make several
adjustments for various customers that in turn results in increasing the
sophistication level with a well-educated customer as well as speaking.
6. Courtesy – It involves friendly attitude as well as nature of personal politeness.

7. Access – It involves availability as well as easy method of contact.

8. Competence – It means possessing the needed skills and knowledge for the
purpose of performing the services.
9. Reliability – It involves dependability and performance consistency. Reliability
means that the service is done correctly the very initial time by the business
and it also means that the business honors its premises.
10.Responsiveness – It means the willingness of a worker for the sake of
providing service. Responsiveness encompasses timeliness of service.

Service quality features

 Adjustment of the system of control in the presence of customers

 Acceptances and variances ranges will not apply
 Difficulty of defining the production measurement
 The presence of customer during the service process as well as performance
of the inspection in the end
 Goodwill or reputation of the business
  Delivery person's behavior

Five stars of service quality

1. Tangibles – Appearances of written materials, personnel, equipment and
physical facilities.
2. Empathy – Caring and personal attention given to the customers.

3. Assurance – Courtesy and employees' knowledge as well as their ability to

inspire confidence and trust.
4. Responsiveness – Readiness to provide services and quick aid to the
customers.
5. Reliability – Ability of doing the promised services correctly.

What’s the Difference between Service Quality and Customer Satisfaction?

Although they are interrelated concepts, there is a difference between service
quality and customer satisfaction. As discussed further in a separate article on
customer satisfaction (CSAT), CSAT is the customer’s evaluation of the
product/service relative to the customer’s prior expectations. Service quality,
however, is the consumer’s estimate of the firm’s overall level of quality. (Please
note that the components of service quality are discussed further in a review of the
SERVQUAL model.) To understand this distinction better, let’s consider a simple
example below.

Service Quality versus Customer Satisfaction example

Assume that there is a small fast-food store in a local area. The store provides a
basic quality of burgers and fries on a take-away basis only, but at very reasonable
prices. The store is generally clean, but not overly attractive, and tends to serve its
meals with 5 to 10 minutes turnaround. This type of store tends to appeal to local
residents who are attracted to its convenience and price value. The customers
would tend purchase food on a regular basis (say every few weeks) when they don’t
have time to cook (or don’t feel like cooking), simply as a replacement for lunch or
dinner prepared at home.
These regular customers would know what to expect from this store and, therefore,
would be generally satisfied with the food, price and service. However, they would
generally acknowledge that the overall quality of this business (in terms of service –
take-away only, physical facilities, food quality) is relatively low as compared to
most other restaurants and food outlets. Therefore, even though the customers
recognize that the firm’s overall (service) quality is low, they are satisfied because it
fits within their range of expectations for this store. The opposite situation might
apply when visiting a very expensive restaurant – where a consumer may recognize
the high overall quality of the firm, but be disappointed on some aspects due to
quite high expectations. This is demonstrated the above diagram/model.

Measuring Quality in Hospitality Industry

People have been arguing that performance is difficult to measure in the service
industry. This is due to the fact that people are not aware that service is also a
product, the most famous models that measure quality service in the hospitality
industry are the following:

The Five Gap Model

Parasuraman, Zeithaml & Berry’s (1994) Quality Service Model is a helpful
instrument to define the objectives of quality management. It is essentially focuses
on customer (customer-oriented) and it helps to clarify the co-service process.
The SERVQUAL Instrument - According to Postma & Jenkins (1997), the supposed
quality has to be measured, both internally and
externally. Perceived Quality Service Model - Gronroos’ (1990) Perceived
Quality Service Model is a supportive tool to understand issues that affect customer
perceived quality in a business’s service.

The Critical Incident Technique(CRIT) - Attempts to recognize what is happening in

the various “moments of truth” and the results are gathered from various samples
after deep investigations. It’s helpful in providing useful and accordingly quality
improvement.
Other Tools for Improvement - Apart from the internal and external measurement,
there are some other tools to monitor quality of products or services and achieve
continuous improvement in the tourism industry; Mystery guest/Mystery shopper(a
technique of covertly visiting companies in inquiry, to check the quality of services
offered), market evaluations, complaints and incidences (oral or written complaints)
in definite forms, audit reports, satisfaction Surveys(questionnaires), benchmarking,
and self-assessments by employees or managers through evaluation the company’s
situation in comparison to other competitors.

Practical Methods for Measuring Service Quality

Here are practical techniques and metrics for measuring your service quality.

1. SERVQUAL - This is the most common method for measuring the subjective
elements of service quality. Through a survey, you ask your customers to rate the
delivered service compared to their expectations. Its questions cover what
SERVQUAL claims are the 5 elements of service quality : RATER.
 Reliability - the ability to deliver the promised service in a consistent and
accurate manner.
 Assurance - the knowledge level and politeness of the employees and to what
extend they create trust and confidence.
 Tangibles - the appearance; of e.g. the building, website, equipment and
employees.
 Empathy - to what extend the employees care and give individual attention.
 Responsiveness - how willing the employees are to offer a speedy service.
2. Mystery Shopping - This is a popular technique used for retail stores, hotels, and
restaurants, but works for any other service as well. It consists of hiring an
"undercover customer" to test your service quality – or putting on a fake moustache
and going yourself, of course.

3. Post Service Rating - This is the practice of asking customers to rate the service
right after it’s been delivered. Different scales can be used for the post service
rating. Many make use of a number rating from 1 – 10. There’s possible ambiguity
here, though, because cultures differ in how they rate their experiences . People
from individualistic cultures, for example, tend to choose the extreme sides of the
scale much more often than those from collectivistic cultures. In line with
stereotypes, Americans are more likely to rate a service as “amazing” or "terrible,"
while the Japanese will hardly ever go beyond “fine” or "not so good." It's important
to be aware of when you have an international audience. Simpler scales are more
robust to cultural differences and more suited for capturing service quality.
Customers don’t generally make a sophisticated estimation of service quality.
4. Follow-Up Survey - With this method you ask your customers to rate your service
quality through an email survey – for example via Google Forms . It has a couple
advantages over the post-service rating. For one, it gives your customer the time
and space for more detailed responses. You can send a SERVQUAL type of survey,
with multiple questions instead of one.
That’d be terribly annoying in a post-service rating. It also provides a more holistic
overview of your service. Instead of a case-by-case assessment, the follow-up
survey measures your customers’ overall opinion of your service. It’s also a useful
technique if you didn’t have the post service rating in place yet and want a quick
overview of the state of your service quality. But there are plenty of downsides as
well. Such as the fact that the average inbox already looks more like a jungle than a
French garden. Nobody’s waiting for more emails – especially those that demand
your time. With a follow-up survey, the service experience will also be less fresh.
Your customers might have forgotten about it entirely, or they could confuse it with
another experience. And last but not least: To send an email survey, you must first
know their emails.
5. In-App Survey - With an in-app survey, the questions are asked while the visitor is
on the website or in the app, instead of after the service or via email. It can be one
simple question –
e.g. "how would you rate our service" – or it could be a couple of questions.
Convenience and relevance are the main advantages. SurveyMonkey offers some
great tools for implementing something like this on your website. Also check out
hotjar's guide on website feedback.

6. Customer Effort Score (CES) - This metric was proposed in an influential Harvard
Business Review article. In it, they argue that while many companies aim to
"delight" the customer – to exceed service expectations – it’s more likely for a
customer to punish companies for bad service than it is for them to reward companies
for good service. While the costs of exceeding service expectations are high, they
show that the payoffs are marginal. Instead of delighting our customers, so the
authors argue, we should make it as easy as possible for them to have their
problems solved. That’s what they found had the biggest positive impact on the
customer experience , and what they propose measuring. Don’t ask: “How satisfied
are you with this service?” – its answer could be distorted by many factors, such as
politeness. Ask: “How much effort did it take you to have your questioned
answered?” The lower the score, the better. CEB found that 96% of the customers
with a high effort score were less loyal in the future, compared to only 9% of those
with low effort scores.
7. Social Media Monitoring - This method has been gaining momentum with the rise
of social media. For many people, social media serve as an outlet. A place where
they can unleash their frustrations and be heard. And because of that, they are the
perfect place to hear the unfiltered opinions of your customers – if you have the
right tools. Facebook and Twitter are obvious choices, but also review platforms like
TripAdvisor or Yelp can be very relevant. Buffer suggests to ask your social media
followers for feedback on your service quality. Two great tools to track who’s
talking about you are Mention and Google Alerts.
8. Documentation Analysis - With this qualitative approach you read or listen to your
respectively written or recorded service records. You’ll definitely want to go through
the documentation of low-rated service deliveries, but it can also be interesting to
read through the documentation of service agents that always rank high. What are
they doing better than the rest? The hurdle with the method isn’t in the analysis,
but in the documentation. For live chat and email support it’s rather easy, but for
phone support it requires an annoying voice at the start of the call: “This call could
be recorded for quality measurement.”
9. Objective Service Metrics - These stats deliver the objective, quantitative analysis
of your service. These metrics aren’t enough to judge the quality of your service by
themselves, but they play a crucial role in showing you the areas you should
improve in.
 Volume per channel. This tracks the amount of inquiries per channel. When
combined with other metrics, like those covering efficiency or customer
satisfaction, it allows you to decide which channels to promote or cut down.
 First response time. This metric tracks how quickly a customer receives a
response on her inquiry. This doesn’t mean their issue are solved, but it’s the
first sign of life – notifying them that they’ve been heard.

 Response time. This is the total average of time between responses. So let’s
say your email ticket was resolved with 4 responses, with respective
response times of 10, 20, 5, and 7 minutes. Your response time is 10.5
minutes. Concerning reply times , most people reaching out via email expect
a response within 24 hours; for social channels it’s 60 minutes. Phone and
live chat require an immediate response, under two minutes.
 First contact resolution ratio. Divide the number of issues that's resolved
through a single response by the number that required more responses.
Forrester research showed that first contact resolutions are an important
customer satisfaction factor for 73% of customers.
 Replies per ticket. This shows how many replies your service team needs on
average to close a ticket. It’s a measure of efficiency and customer effort.
 Backlog Inflow/Outflow. This is the number of cases submitted compared to
the number of cases closed. A growing number indicates that you’ll have to
expand your service team.
 Customer Success Ratio. A good service doesn’t mean your customers always
finds what they want. But keeping track of the number that found what they
looked for versus those that didn’t, can show whether your customers have
the right ideas about your offerings.
 "Handovers" per issue. This tracks how many different service reps are
involved per issue. Especially in phone support, where repeating the issue
is necessary, customers hate handovers. HBR identified it as one of the four
most common service complaints.
 Things Gone Wrong. The number of complaints/failures per customer inquiry.
It helps you identify products, departments or service agents that need some
"fixing."

 Instant Service/Queueing Ratio. Nobody likes to wait. Instant service is the best
service. This metric keeps track of the ratio of customers that were served
instantly versus those that had to wait. The higher the ratio, the better your
service.

 Average Queueing Waiting Time. The average time that queued customers
have to wait to be served.
 Queueing Hang-ups. How many customers quit the queueing process? These
count as a lost service opportunity.
 Problem Resolution Time. The average time before an issue is resolved.

 Minutes Spent Per Call. This can give insight on who are your most efficient
operators.