9 Service Quality

Understanding Service Quality

Service quality is a critical factor in the success of any service-oriented business. It can be defined as the degree to which a service meets or exceeds customer expectations. Unlike product quality, which can be measured objectively, service quality is largely determined by customer perception, making it both more challenging to measure and more crucial to manage effectively.

Attributes of Service Quality – RATER model of Service Quality

Service quality is typically evaluated based on five key attributes that make up the acronym RATER:  Reliability, Assurance, Tangibles, Empathy, Responsiveness. 

Reliability: refers to the ability to perform the promised service dependably and accurately. It’s often considered the most important dimension of service quality.

Example: A package delivery service consistently delivers parcels on time and to the correct address. If they promise next-day delivery, customers can rely on receiving their package the next day.

1. When the company promises to do something by a certain time, it does so.
2. When you have a problem, the company shows a sincere interest in solving it.
3. The company performs the service right the first time.
4. The company provides its services at the time it promises to do so.
5. The company insists on error-free records.

Assurance: the knowledge and courtesy of employees and their ability to inspire trust and confidence. It’s particularly important for services that are perceived as high risk or where customers feel uncertain about their ability to evaluate outcomes.

Example: A financial advisor demonstrates in-depth knowledge of investment strategies, explains complex concepts clearly, and maintains a professional demeanor, instilling confidence in clients about their financial decisions.

1. The behavior of employees instills confidence in customers.
2. You feel safe in your transactions with the company.
3. Employees are consistently courteous with you.
4. Employees have the knowledge to answer your questions.

Tangibles: the appearance of physical facilities, equipment, personnel, and communication materials. While services are intangible, the tangible elements associated with the service can significantly impact customer perceptions.

Example: A dental office maintains a clean, modern waiting area with comfortable seating and up-to-date magazines. The staff wears crisp, clean uniforms, and all equipment appears sterile and well-maintained.

1. The company has modern-looking equipment.
2. The company’s physical facilities are visually appealing.
3. The company’s employees appear neat.
4. Materials associated with the service (such as pamphlets or statements) are visually appealing.

Empathy: providing caring, individualized attention to customers. It’s about treating customers as individuals and showing that the company understands and cares about their specific needs.

Example: A hotel remembers a returning guest’s preferences (like room type or pillow choice) and proactively accommodates these without the guest having to ask.

1. The company gives you individual attention.
2. The company has operating hours convenient to all its customers.
3. The company has employees who give you personal attention.
4. The company has your best interests at heart.
5. Employees understand your specific needs.

Responsiveness: the willingness to help customers and provide prompt service. It involves being attentive to customer needs and responding quickly to requests or complaints.

Example: In a restaurant, a waiter notices a customer looking around and immediately approaches to ask if they need anything, rather than waiting for the customer to call for attention.

1. Employees tell you exactly when services will be performed.
2. Employees give you prompt service.
3. Employees are always willing to help you.
4. Employees are never too busy to respond to your requests.

Measuring Service Quality

Several techniques can be employed to measure service quality:

1. SERVQUAL questionnaire: A standardized survey instrument based on the five service quality attributes (described in the next section).
2. Mystery shopping: Undercover evaluators assess the service experience as customers.
3. Focus groups: In-depth discussions with small groups of customers to gather qualitative feedback.
4. Online reviews: Analysis of customer comments on various digital platforms.
5. Complaint analysis: Systematic examination of customer complaints to identify recurring issues.
6. Transactional surveys: Short surveys distributed to customers immediately after service delivery.
7. Annual surveys: Comprehensive yearly assessments of customer satisfaction and loyalty.
8. Net Promoter Score (NPS): A metric that measures customer loyalty and likelihood to recommend the service.

These various measurement techniques serve different purposes in the spectrum of service quality management. Some methods, such as mystery shopping, service reviews, and complaint analysis, provide specific, actionable insights that frontline employees and managers can implement immediately.

For instance, mystery shopping can identify precise areas where service protocols aren’t being followed, while complaint analysis can highlight recurring issues that need addressing.

On the other hand, techniques like annual surveys and Net Promoter Score (NPS) are more suited to gauging overall customer satisfaction and loyalty, informing strategic decisions at higher organizational levels.

Focus groups and online reviews occupy a middle ground, offering both specific feedback and broader trends. Feedback cards provide quick, in-the-moment insights, useful for day-to-day operations.

By employing a combination of these techniques, organizations can build a comprehensive picture of their service quality, addressing both immediate, tactical improvements and long-term, strategic enhancements to customer experience.

The GAP Model of Service Quality

The GAP model is a framework for understanding and improving service quality. It identifies five potential gaps in service delivery:

Knowledge gap: The difference between customer expectations and management’s perception of these expectations.

Example: A high-end restaurant assumes its customers primarily value exquisite food presentation and exotic ingredients. However, customers actually prioritize portion size and the ability to customize their meals. This misunderstanding represents a knowledge gap between what customers expect and what management thinks they expect.

Policy gap: The difference between management’s perception of customer expectations and service quality specifications.

Example: An airline’s management correctly understands that customers value punctuality. However, their flight scheduling policy doesn’t allow enough time for potential delays or aircraft turnaround, leading to frequent delays. This represents a policy gap where the service quality specifications don’t match the understood customer expectations.

Delivery gap: The difference between service quality specifications and the service actually delivered.

Example: A hotel has a policy that room service should be delivered within 30 minutes of ordering. However, due to understaffing and poor coordination between kitchen and delivery staff, orders frequently take 45-60 minutes to arrive. This is a delivery gap where the actual service falls short of the specified standard.

Communications gap: The difference between service delivery and what is communicated about the service to customers.

Example: A cell phone company advertises “unlimited data” in their marketing materials. However, in reality, they significantly slow down data speeds after a certain usage threshold. This discrepancy between what is communicated and what is delivered represents a communications gap.

Customer gap: The difference between customer expectations and perceptions of the service received.

Example: A customer visits a highly-rated, expensive hair salon expecting a transformative haircut and style. While the salon provides a competent service, it doesn’t meet the customer’s elevated expectations, resulting in disappointment. This difference between the customer’s expectations and perceptions of the service received is the customer gap.

SERVQUAL Survey Instrument

The SERVQUAL survey instrument is a standardized questionnaire designed to measure service quality across the five dimensions: Reliability, Responsiveness, Assurance, Empathy, and Tangibles. Developed by Parasuraman, Zeithaml, and Berry in the 1980s, it remains one of the most widely used tools for assessing service quality.

Structure of the SERVQUAL instrument:

1. The questionnaire typically consists of 22 paired statements.
2. Each pair includes one statement to measure customer expectations and another to measure perceptions of the service actually received.
3. Respondents rate each statement on a 7-point Likert scale, ranging from “Strongly Disagree” (1) to “Strongly Agree” (7).

Administration of SERVQUAL:

1. Pre-service expectations: Ideally, customers complete the expectations portion BEFORE receiving the service, rating what they expect from an excellent service provider in the industry.
2. Post-service perceptions: AFTER experiencing the service, customers complete the perceptions portion, rating their actual experience with the specific service provider.
3. Gap analysis: The difference between the expectations and perceptions scores for each item is calculated. Negative gaps indicate areas where the service falls short of expectations, while positive gaps suggest the service exceeds expectations.

Interpretation and application:

• The results highlight specific areas where service quality needs improvement.
• By comparing scores across dimensions, organizations can prioritize improvement efforts.
• Repeat administration over time allows tracking of service quality improvements.
• Benchmarking against competitors or industry standards is possible if using a standardized version of the instrument.

Limitations:

• The instrument may need adaptation for specific service contexts.
• There’s debate about whether measuring expectations is necessary or if perceptions alone are sufficient.
• The length of the survey (44 items in total) can lead to respondent fatigue.

Despite these limitations, SERVQUAL remains a valuable tool for many organizations in assessing and improving their service quality. Its structured approach provides actionable insights into customer perceptions across multiple dimensions of service quality.

See the appendix for the complete 22 items and an example of how they would be used in a bank.

Mapping SERVQUAL survey to the GAP Model

The SERVQUAL model is primarily designed to measure the Customer Gap (Gap 5), which is the difference between customer expectations and perceptions. However, the other four gaps in the model (Gaps 1-4) contribute to and help explain the Customer Gap. Here’s how

SERVQUAL relates to all five gaps:

Knowledge Gap (Gap 1):

While SERVQUAL doesn’t directly measure this gap, the results can highlight discrepancies between what customers expect and what management thinks they expect. If there are consistent, large negative gaps across many items or dimensions, it may indicate a Knowledge Gap.

Additionally, the SERVQUAL instrument could be given to management and then compared to what customers provide to directly measure this gap.

Policy Gap (Gap 2):

SERVQUAL doesn’t directly measure this gap either. However, if the company consistently underperforms on certain dimensions despite understanding customer expectations, it might indicate a Policy Gap where service quality specifications are not aligned with those expectations.

Delivery Gap (Gap 3):

The perception scores in SERVQUAL can indirectly reflect this gap. If the company has appropriate policies and standards but consistently low perception scores, it might indicate a Delivery Gap where the actual service doesn’t meet the specified standards.

Communications Gap (Gap 4):

This gap isn’t directly measured by SERVQUAL. However, if expectation scores are consistently much higher than perception scores, especially for newer customers, it might indicate a Communications Gap where marketing messages have set unrealistic expectations.

Customer Gap (Gap 5):

This is the primary gap that SERVQUAL measures. It’s calculated directly by subtracting the perception score from the expectation score for each item. The overall SERVQUAL score represents this gap at an aggregate level.

While SERVQUAL is most directly tied to measuring the Customer Gap, it’s important to note that the results can provide insights into the other gaps:

• Large negative gaps across multiple dimensions might indicate issues with the Knowledge Gap or Policy Gap.
• Consistently low perception scores might point to problems with the Delivery Gap.
• Very high expectation scores combined with average or low perception scores could suggest a Communications Gap.

To fully diagnose issues related to Gaps 1-4, organizations typically need to complement SERVQUAL with other assessment methods such as:

• Employee surveys to understand their perception of customer expectations (Gap 1)
• Analysis of company policies and service standards (Gap 2)
• Operational audits to assess service delivery against standards (Gap 3)
• Review of marketing communications and their alignment with actual service capabilities (Gap 4)

By combining SERVQUAL results with these additional assessments, companies can gain a comprehensive understanding of all five gaps in the service quality model and develop targeted strategies for improvement.

Appendix: SERVQUAL Dimensions

Reliability:

1. When the company promises to do something by a certain time, it does so.
2. When you have a problem, the company shows a sincere interest in solving it.
3. The company performs the service right the first time.
4. The company provides its services at the time it promises to do so.
5. The company insists on error-free records.

Assurance:

6. The behavior of employees instills confidence in customers.
7. You feel safe in your transactions with the company.
8. Employees are consistently courteous with you.
9. Employees have the knowledge to answer your questions.

Tangibles:

10. The company has modern-looking equipment.
11. The company’s physical facilities are visually appealing.
12. The company’s employees appear neat.
13. Materials associated with the service (such as pamphlets or statements) are visually appealing.

Empathy:

14. The company gives you individual attention.
15. The company has operating hours convenient to all its customers.
16. The company has employees who give you personal attention.
17. The company has your best interests at heart.
18. Employees understand your specific needs.

Responsiveness:

19. Employees tell you exactly when services will be performed.
20. Employees give you prompt service.
21. Employees are always willing to help you.
22. Employees are never too busy to respond to your requests.

Complete SERVQUAL Questions for a Bank

For each pair, (a) represents the expectation question and (b) represents the perception question.

Reliability:

1a. When excellent banks promise to do something by a certain time, they do so.
1b. When XYZ Bank promises to do something by a certain time, it does so.

2a. When a customer has a problem, excellent banks show a sincere interest in solving it.
2b. When you have a problem, XYZ Bank shows a sincere interest in solving it.

3a. Excellent banks perform the service right the first time.
3b. XYZ Bank performs the service right the first time.

4a. Excellent banks provide their services at the time they promise to do so.
4b. XYZ Bank provides its services at the time it promises to do so.

5a. Excellent banks insist on error-free records.
5b. XYZ Bank insists on error-free records.

Assurance:

6a. The behavior of employees in excellent banks instills confidence in customers.
6b. The behavior of XYZ Bank’s employees instills confidence in you.

7a. Customers of excellent banks feel safe in their transactions.
7b. You feel safe in your transactions with XYZ Bank.

8a. Employees of excellent banks are consistently courteous with customers.
8b. Employees of XYZ Bank are consistently courteous with you.

9a. Employees of excellent banks have the knowledge to answer customer questions.
9b. Employees of XYZ Bank have the knowledge to answer your questions.

Tangibles:

10a. Excellent banks have modern-looking equipment.
10b. XYZ Bank has modern-looking equipment.

11a. Excellent banks’ physical facilities are visually appealing.
11b. XYZ Bank’s physical facilities are visually appealing.

12a. Employees at excellent banks appear neat.
12b. XYZ Bank’s employees appear neat.

13a. Materials associated with the service (such as pamphlets or statements) are visually appealing at excellent banks.
13b. Materials associated with the service (such as pamphlets or statements) are visually appealing at XYZ Bank.

Empathy:

14a. Excellent banks give customers individual attention.
14b. XYZ Bank gives you individual attention.

15a. Excellent banks have operating hours convenient to all their customers.
15b. XYZ Bank has operating hours convenient to all its customers.

16a. Excellent banks have employees who give customers personal attention.
16b. XYZ Bank has employees who give you personal attention.

17a. Excellent banks have the customers’ best interests at heart.
17b. XYZ Bank has your best interests at heart.

18a. The employees of excellent banks understand the specific needs of their customers.
18b. Employees of XYZ Bank understand your specific needs.

Responsiveness:

19a. Employees of excellent banks tell customers exactly when services will be performed.
19b. Employees of XYZ Bank tell you exactly when services will be performed.

20a. Employees of excellent banks give prompt service to customers.
20b. Employees of XYZ Bank give you prompt service.

21a. Employees of excellent banks are always willing to help customers.
21b. Employees of XYZ Bank are always willing to help you.

22a. Employees of excellent banks are never too busy to respond to customer requests.
22b. Employees of XYZ Bank are never too busy to respond to your requests.

Respondents would rate each statement on a 7-point Likert scale from 1 (Strongly Disagree) to 7 (Strongly Agree). The gap score for each item is calculated by subtracting the expectation score from the perception score.