2. Learning Objectives
• To understand the basis of service quality
• To understand the role of expectations in service
quality
• To understand the role of service experience in
service quality
• To understand the service sequence
3. The Quality Problem
Service Customer as
Providing Participant
Service as Outcome (Co-producer)
Simultaneity
Process
Intangibility Perishability
Heterogeneity
Variability, Complexity
How to Determine Quality in this Situation?
i.e. How do I measure a good quality haircut?
4. The Basis of Service Quality
The perception of the
customer determines the
quality of a service
(In short: “did I get what I expected – or better?”)
i.e. Is the haircut what I expected?
5. The Basis of Perception
Perception is based on Experience of Service
compared against Expectation of Service
If experience matches
expectations, then Experience Expectation
quality is good
If experience exceeds
expectations, then
quality is great
If expectations exceed
experience, then quality
is poor
6. Expectations vs Experience
Experience and Expectation of Service have a
Process and an Outcome aspect
Getting
Something
Experiencing
Something
Outcome Outcome
Process Process
Expectation Experience
7. Can you Rely on the Outcome?
Superior Outcome may not compensate for
poor Process (or vice versa)
Outcome
Outcome
Process
Process
Expectation Experience
8. Example: Outcome Most Important
“They were rude but at least
they fixed my car properly”
“They were polite but my
car broke down again”
9. Example: Process Most Important
“The concert was great but
the t-shirts were terrible”
“The concert was bad but
they sold great t-shirts”
10. Example: Both are Important
“The food was great but
the staff were rude”
“The staff were polite but
the food was terrible”
12. What Affects Expectations
Corporate Brand
The advent of Social Media
& Image has magnified the audience
for dissatisfied customers
Sales/ Marketing
Information Outcome
What Other Process
Customers Say
Past Experience
Expectation
with Service
Relationship with
Service Provider
Experiences with
Other Services
13. Types of Expectations
Unrealistic
Explicit
Outcome
Process
Realistic
Fuzzy Make
explicit
Explicit Expectation
Implicit
14. Examples of Expectations
Explicit Unrealistic: “make Explicit Realistic: “Short
me look like Brad Pitt” back and sides”
Make
realistic
Make explicit
Fuzzy: “make me look like a Implicit: “why didn’t you ask
rockstar” me first?”
16. What Affects Experience
Experience is built up
Outcome through a series of:
Process
SERVICE ENCOUNTERS
Experience also known as
MOMENTS OF TRUTH
also known as
ACTS
17. The Basis of a Relationship
The cumulative effect of these Acts defines the
overall Service Experience and therefore the
Service Relationship
Outcome Service Relationship
Process Sequence Sequence
Episode Episode Episode Episode
Experience Act
Act
Act
Act
Act
Act
Act
Act
Act
Act
Act
Act
Source: Holmlund, Perceived Quality in Business Relationships
19. Example of a Service Sequence
A conceptual map of the customer’s experience
Above
expectation 4
(great service)
2 8 9
Expected Zone of
Service 1 3 6 Tolerance
5
Below 7
expectation
(poor service)
20. The Dangers of Delighting Customers
6 7 8
Above New Zone of
9
expectation 2
(great service) 4 Tolerance
Expected
3 5 Old Zone of
Service 1 Tolerance
Below
expectation
(poor service)
It becomes very difficult to continually delight
customers as they come to expect delight as part
of the service. The zone of tolerance shifts.
21. Final Word on Service Quality
• What the customer thinks is critical to service quality
• The outcome and the process need to meet expectations
• What you do defines quality as much as what you say
• Getting expectations right is important
• Service Quality is dynamically built up over a period of
time through a series of Acts.
Editor's Notes
Title Slide
Services are difficult to graspwhich makes defining quality difficult.IntangibilityIntangibility of services can make quality difficult to quantify without experiencing that quality. This makes services difficult to try out before using them. Service as ProcessGoods are something that customers get, services are something that happens to (or for) customers, and customers are all different.Service Providing and OutcomeServices have a process and an outcome. Customers care about both the process (how the service is delivered) and the outcome (what they get). Customer as Participant (Co-producer)The customer generally participates in a service whereas good are generally pre-produced for the customer. The participation of the customer in the service can add to the variiability of the service.SimultaneityGood are produced and persist and can be used later. Services are produced and consumed at the same time. If the service is temporary, the quality is difficult to measure.PerishabilityManaging capacity is an important element of managing services. When demand exceeds service capacity – customers wait (lowering quality)All this leads to HeterogeneityThe value (and therefore quality) of the service depends on the tastes or requirements of the customer.All this makes defining specific quality measures for a service complex
Services are difficult to graspwhich makes defining quality difficult.IntangibilityIntangibility of services can make quality difficult to quantify without experiencing that quality. This makes services difficult to try out before using them. Service as ProcessGoods are something that customers get, services are something that happens to (or for) customers, and customers are all different.Service Providing and OutcomeServices have a process and an outcome. Customers care about both the process (how the service is delivered) and the outcome (what they get). Customer as Participant (Co-producer)The customer generally participates in a service whereas good are generally pre-produced for the customer. The participation of the customer in the service can add to the variiability of the service.SimultaneityGood are produced and persist and can be used later. Services are produced and consumed at the same time. If the service is temporary, the quality is difficult to measure.PerishabilityManaging capacity is an important element of managing services. When demand exceeds service capacity – customers wait (lowering quality)All this leads to HeterogeneityThe value (and therefore quality) of the service depends on the tastes or requirements of the customer.All this makes defining specific quality measures for a service complex
The solution to the complexity problem is a customer centric measure. Perceived outcome compared against the expected outcome.In short the quality is good if the customer says “I got what I expected from this service.. …or better”
Perceived quality is a relative measure which compares the customers experience of a service against the customers expectations of the service.If experience of the service matches expectations then the quality is good.If experience of the service exceeds expectations then the quality is great.If experience of the service does not meet expectations then the quality is poor.
For most services, both the process and the outcome quality are important. The both have expectations and they both need to be met.Example: In a restaurant, both the services AND the food are important.
If the process is important to the customer, then it needs to meet the customer’s expectations. Example: Good food cannot compensate for poor service or dirty surroundings. If the outcome is important to the customer, then it needs to meet the customer’s expectations.Example: Clean surroundings and polite staff cannot compensate for a bad haircut.
Here is an example of a service where the outcome is more important than the process. Good quality process cannot make up for a poor outcome.
Here is an example of a service where the process is more important than the outcome. Good quality outcome cannot make up for a poor process.
Here is an example of a service where both the process and the outcome are important. A failure of either one affects the perception of the service.
Title Slide
Customer expectations are set in a number of ways, not all of which the company has control over.It is important to realise that marketing is only part of the story.Past experience, reputation, and what other customers say strongly influences the expectations.In this way the people who deliver the service have a role to play in setting expectations around the quality through previous service situations.What other customers’ say is important, this is called word of mouth. Social media has amplified the audience for dissatisfied customers.
Customers have different types of expectations which affect what customers perceive that they should experience from a service. Managing these expectations is half of the equation for managing Service Quality. The four types of expectations are:Fuzzy Expectations: Desire for outcome without clear expectation on how service will fulfil this.Implicit Expectations: Unstated assumption that the service provides this level of quality.Unrealistic Explicit Expectations: Clearly understood expectations that are beyond the capability of the Service Provider to deliver.Realistic Explicit Expectations: Clearly understood expectations that are within the capability of the Service Provider to deliver.Generally the goal is to make fuzzy and implicit expectations into explicit (and realistic) expectations, and to manage down unrealistic expectations.
Customers have different types of expectations which affect what customers perceive that they should experience from a service. Managing these expectations is half of the equation for managing Service Quality. The four types of expectations are:Fuzzy Expectations: Desire for outcome without clear expectation on how service will fulfil this.Implicit Expectations: Unstated assumption that the service provides this level of quality.Unrealistic Explicit Expectations: Clearly understood expectations that are beyond the capability of the Service Provider to deliver.Realistic Explicit Expectations: Clearly understood expectations that are within the capability of the Service Provider to deliver.Generally the goal is to make fuzzy and implicit expectations into explicit (and realistic) expectations, and to manage down unrealistic expectations.
Title Slide
A service encounter is either: Getting something, and/orExperiencing somethingWhen receiving a service and customer may experience many service encounters.
Act: A single interaction. Example: ordering a bottle of wine at a hotel restaurantEpisode: All acts that contribute to a specific outcome. Example: having a meal at a hotel restaurantSequence: All acts and sequencesinteractions related to a particular service. Example: a stay in a hotelService Relationship: The total overall customer’s interactions and perceptions of the service provider.Example: Likelihood to stay in a hotel
Title Slide
The customer’s experience can be mapped through a service sequence. This is an abstract map showing how the perceived quality of service can be affected by the different acts. The customer may have had some great service (Act 4) and some poor service (Act 7).
Because expectations are set by previous experiences of the service, continually delighting the customer can create a situation where the customer’s expectations rise. If the last three times you were upgraded to business class, you will experience disappointment if it doesn’t happy on the fourth time.
