Appreciation of Service Quality Concept David L Jones, Ph.D. Associate Professor School of Hotel & Tourism Management The Hong Kong Polytechnic University
Jan 19, 2015
Appreciation of Service Quality Concept
David L Jones, Ph.D.Associate Professor
School of Hotel & Tourism ManagementThe Hong Kong Polytechnic University
Whatever it was that got you where
you are today is not sufficient
to keep you there
What We Will Cover
• What makes services different?• What do we mean by service
quality?• How do we know if we are
delivery service quality?• How is the Asian Wave
influencing service quality?• How do we bring East and West
together in service leadership?
Service Definition
Any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of
anything.
Services Attributes & Characteristics
Services versus Goods• Intangibility
• Heterogeneity/Variability
• Inseparability– Simultaneous Production and
Consumption
• Perishability
TangibleDominant
IntangibleDominant
SaltSoft Drinks
DetergentsAutomobiles
Cosmetics
AdvertisingAgencies Airlines
InvestmentManagement
ConsultingTeaching
Fast-foodOutlets
Fast-foodOutlets
Tangibility Spectrum
Industrialized
Goods
Industrialized
Services
Differentiated
Goods
Customized
Goods
Differentiated
Services
Customized
Services
Undifferentiated Goods/Services Bundles
Differentiated Goods/Services Bundles
Customized Goods/Services Bundles
TANGIBLITY
DEGREE OF CUSTOMIZATION
LowLow
High
High
Bell’s Goods/Services Classification
Implications of Intangibility
Services cannot be inventoriedServices cannot be patentedServices cannot be readily
displayed or communicatedPricing is difficult
Shangri-la in Hong Kong
Kowloon Shangri-la
Island Shangri-la
Mandarin Oriental
What is the Difference?
Implications of Heterogeneity
Service delivery and customer satisfaction depend on employee actions
Service quality depends on many uncontrollable factors
There is no sure knowledge that the service delivered matches what was planned and promoted
Service Triangle
Implications of Simultaneous Production and ConsumptionCustomers participate in and
affect the transactionCustomers affect each otherEmployees affect the service
outcomeDecentralization may be
essentialMass production is difficult
Implications of Perishability
It is difficult to synchronize supply and demand with services
Services cannot be returned or resold
Services Marketing Mix
• Physical Evidence • People – Employees and
Customers• Process
Zeithaml & Bitner 1996
PEOPLE PHYSICAL EVIDENCE
PROCESS
Employees
Facility design Flow of activities
Customers Equipment Number of steps
Communicating culture and values
Signage Level of customer involvement
Employee research Employee dress
Other tangibles
Expanded Marketing Mix for Services
Evidence of Service from the
Customer’s Point of View
People
Process PhysicalEvidence
Contact employees Customer him/herself Other customers Operational flow
of activities Steps in process Flexibility vs.
standard Technology vs.
human
Tangible communication
Servicescape Guarantees Technology
Defining Service Quality
Service Quality
The totality of features and characteristics of a product or
service that bear on its ability to satisfy stated or implied needs.
Service Quality
• The customer’s judgment of overall excellence of the service provided in relation to the quality that was expected.
• Service quality assessments are formed on judgments of:– Outcome quality– Process quality– Physical environment quality
Customer Assessment of Service Quality
Dimensions of Service Quality
• Tangibles• Reliability• Responsiveness• Assurance• Empathy
Tangibles• Appearance of physical facilities,
equipment, personnel and communication materials
• Before, during and after• “Servicescape”
Reliability• Ability to perform the promised
service dependable and accurately
• Most significant• Promises
– Personal– Organizational– Common expectations
• Service Delivery Systems
Social Media Review Networking
Sites
Responsiveness• Willingness to help customers
and provide prompt service• Finding out what the customer
really needs by when• Customer waits
– Fast food – 5 minutes– Fine dining – 30 minutes
• Service Recovery Systems
30
Assurance• Competence
– Possession of the required skills and knowledge to perform the service
– Product and Company Knowledge• Courtesy
– Politeness, respect, consideration and friendliness of contact personnel
• Credibility– Trustworthiness, believability, honesty of the
service provider
Reassurance Factor
• Product knowledge• Company knowledge• Listening skills• Problem-solving skills
Empathy• Caring, individualized attention the firm
provides its customers
• Access– Approachability and ease of contact
• Communication– Keeping customers informed in language
they can understand, and listening to them
• Understanding the customer– Making the effort to know customers and
their needs• Empathy vs. Sympathy
Attributes of the Dimensions
Providing service as promised Dependability in handling customers’
service problems Providing services at the promised time Performing services right the first time Maintaining error-free records
Keeping customers informed as to when services will be performed
Prompt service to customers Willingness to help customers Readiness to respond to customers’
requests
RELIABILITY
RESPONSIVENESS
Employees who instill confidence in customers
Making customers feel safe in their transactions
Employees who are consistently courteous Employees who have the knowledge to
answer customer questions
ASSURANCE
Giving customers individual attention Employees who deal with customers in a
caring fashion Having the customer’s best interest at heart Employees who understand the needs of
their customers Convenient business hours
EMPATHY
Modern equipment Visually appealing facilities Employees who have a
neat, professional appearance
Visually appealing materials associated with the service
TANGIBLES
Which Dimension of Service Quality is Most Important to You in Evaluating a Restaurant?
A. TangiblesB. ReliabilityC. ResponsivenessD. AssuranceE. Empathy
Which Dimension of Service Quality is Most Important to You in Evaluating a Hotel?
A. TangiblesB. ReliabilityC. ResponsivenessD. AssuranceE. Empathy
RATER• When you deliver a customer’s order
on time, you show reliability• When you smile and tell a customer, “I
can help you with that” – and do – you build customer assurance
• And when time to make yourself and your work area more presentable, you are paying attention to tangibles
• When you are sensitive to an individual customer’s need when solving a problem, you show empathy
• When you notice a customer puzzling over a decision and offer help and information, you show responsiveness
Does Service Quality Lead to Profits?
Key Drivers of Service Quality, Customer Retention, and Profits
Key Drivers
ServiceEncounter
ServiceEncounter
ServiceEncounter
Customer Retention
BehavioralIntentions
Profits
ServiceEncounter
Service Encounters
ServiceQuality
Hotel Service Delivery Systems
Process – Reliability/Assurance
Ritz Carlton
Ladies and Gentlemen Serving Ladies and
Gentlemen
The Gold Standards of Quality Service
VALUES AND OPERATING PHILOSOPHY
GOLD STANDARDSCredo
Motto
3 Steps of Service
12 Service Values
Employee Promise
A perspective on thinking…
ATTITUDE
BEHAVIOR
FEELINGS
THINKING
The Gold Standards of Quality Service
Mandarin Oriental - DELIGHT• Our mission is to delight our guests and the word delight is the perfect
acronym for everything that Mandarin Oriental represents.• Distinctive
– A unique collection of individual hotels and resorts from the elegant charm of 19th century London to the futuristic architecture of Miami’s art deco style. Mandarin Oriental hotels and resorts are unique in style and design. Each property has its own distinctive flair and charm, while guests are assured unparalleled warmth and hospitality in every destination.
• Exotic– The magic of the orient, with a sense of place. Reflective of local culture and style, each hotel has a strong
sense of place while oriental touches provide a warm and inviting atmosphere. • Lively
– A place with energy and momentum. Creating experiences of exceptional quality, Mandarin Oriental hotels and resorts are vibrant, popular places from which to enjoy the best in life.
• Imaginative– Innovative designs and services to excite and entertain. Chic and spacious with innovative architecture,
interiors and original art, Mandarin Oriental welcomes guests with impeccable surroundings and creative spaces.
• Guest-centred– A service that’s personal, passionate and surprising. With our oriental beginnings, highly personalized
service comes naturally to us all. Our aim is to delight and surprise you on every occasion, and to constantly welcome you back to the warmth that is Mandarin Oriental.
• Harmonious– Caring service combined with special touches. We welcome you with the utmost in personal attention and
create a harmonious and holistic environment to ensure total relaxation and enjoyment. Distinctive charm and hospitality is provided in elegant and immaculate surroundings.
• Time giving. – A place which gives time to enjoy, relax and reflect. Gaining cultural insights to an ancient Lanna
kingdom, languishing by a pool in Florida, watching the breakers in Bermuda, Mandarin Oriental aims to give you the time to experience life and all its pleasures.
Shangri-la Guiding Principles• We will ensure leadership drives for results. • We will make customer loyalty a key driver of our
business. • We will enable decision making at the customer
contact point. • We will be committed to the financial success of our
own unit and of our company. • We will create an environment where our colleagues
may achieve their personal and career goals. • We will demonstrate honesty, care and integrity in all
our relationships. • We will ensure our policies and processes are
customer and employee friendly. • We will be environmentally conscientious and provide
safety and security for our customers and our colleagues.
Service Recovery Systems
Process – Responsiveness/Empathy
If you were working at the front desk of hotel and a guest checking out complained that they couldn’t
sleep last night because of the noise in the hall from other guests there with a convention, what would
you do?
A. Apologize and indicate you’ll tell the manager
B. Offer them a complaint form to fill out
C. Offer them a 10% discount on the room rate
D. Tell them you will have a free night stay coupon sent to them for their next visit
E. Make the room complimentary for last night
Learn from R
ecovery E
xperiences
Act
Qui
ckly
Treat Customers Fairly
Fail-safethe Service
Cultivate Relationships
with Customers
Encourage and Track
Complaints
Provid
e Ade
quat
e
Explan
ation
s
Lear
n fro
m L
ost
Custo
mer
s
ServiceRecoveryStrategies
Service Recovery Strategies
The Service Recovery Process
Teach the Importance of Service Recovery
Identify Service Problems
Resolve Problems Effectively
Improve the Service System
The Importance of Customer Satisfaction
• The average business does not hear from 96% of its unhappy customers
• For every complaint received, 26 customers actually have the same problem
• The average person with a problem tells 9 or 10 people– 13% tell more than 20
The Importance Of Customer Satisfaction
(cont.)• Customers who have their complaints
resolved tell an average of 5 people• Complainers are more likely to do
business with you again than non-complainers– 54-70% if the complaint is resolved at all– 95% if the complaint is resolved quickly
Which Approach Do You Typically Take to Bad Service?
A. Do nothing, stay with current provider
B. Do nothing, change providersC. Complain to managementD. Complain to family and friendsE. Complain to service person
Service Problem Reactions
• Complain and it gets resolved
• Complain and it isn’t resolved
• Dissatisfied and don’t complain
Unhappy Customers’ Repurchase Intentions
82%
54%
19%
9%
Complaints Resolved Quickly
Complaints Resolved
Complaints Not Resolved
Unhappy Customers Who Don’t Complain
Unhappy Customers Who Do Complain
Percent of customers who will buy again after a major complaint (over $100 in losses)
Source: Adapted from data reported by the Technical Assistance Research Program.
Disney’s Process
Disney’s Empowerment
Process for Customer
Complaints
Disney Service Recover
y Actions
The Benefits Of Customer Satisfaction
• Positive word-of-mouth • Purchase more frequently• Less likely to be lost to
competitors• Insulated from price competition• Positive work environments
So What Is Different in Asia?
Process and People
Asian Wave:The Service Difference
Process
Shangri-la PhilosophyHas It Changed?
BEFORE NOW
Shangri-La
Hospitality
from
Caring
People
Shangri-la Commitment• Unique characteristics
encapsulated by Asian Hospitality. Our commitment to providing guests with distinctive Asian standards of hospitality and service from caring people remains our major point of differentiation from our peers and the very cornerstone of our reputation as a world-class hotel group.
• “Pride without arrogance”
Understanding Guest Expectations
What Dimensions Have We Addressed?
A. TangiblesB. ReliabilityC. ResponsivenessD. AssuranceE. Empathy
Understanding the Lifetime Value of the Customer
• Lifetime value view, not transaction view – Chinese Guanxi
• Revenue and profits by average customer over a lifetime by segment
• Increase average purchase, frequency of visit, life
• Assurance?
Advantages of Developing
a Relationship• Increase in frequency of purchases• Increase in number of products
purchased• Reduce price competition• Gain referrals from loyal customers• Often easier to serve loyal customers• Reduce costs–4-7 times as much to
create a customer
If you were working at the front desk of hotel and a guest checking out complained that they couldn’t
sleep last night because of the noise in the hall from other guests there with a convention, what would
you do?
A. Apologize and indicate you’ll tell the manager
B. Offer them a complaint form to fill out
C. Offer them a 10% discount on the room rate
D. Tell them you will have a free night stay coupon sent to them for their next visit
E. Make the room complimentary for last night
Asian Wave:The Service Difference
People
Asian Principles“3 Plus 1 Factor”
• Respect for Elders• “Face”
– Giving It • Work Before Self
– Importance of the status of working for a hotel
• Plus Factor: Educational Sponges
Development of Service Culture
Business
HomeEducationalInstitutions
Society
Service LeadershipCharacteristics
Bringing East and West Together
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Qualities of Service Leaders
• Service Vision– Focus on details– Bond with customer– Words and behavior– Vision vs. Idealism
• Belief in Others– Capacity of others to achieve– Not bosses, acting as a coach
• Love of the Business– Pass it on to others– Passion for service
• Integrity– Doing the right thingBerry 1995
Love of Business –How You Can Show It
• Customers are the reason we are here• Sell customers what they want and what fits• Emphasize quality of the product• Be on the floor• Make customers part of the operation• Know you menu and services offered• Show quality in everything• Always smile• You sell yourself. Customers come back
because of they are friends• Promote the restaurant 24 hours
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Winning People to the Vision
• They understand the purpose of their work.• They feel they are members of an important
group.• They have a sense of ownership of their
work.• They have high self-esteem.• They have management support.• They have resources – the time, tools,
training – to do the job they are being asked to do.
• They have the information about what is going on, what they are doing, and how well they are doing it.
Nurture Service Leadership
Promote Right People
• Footprints-in-the-sand test– Past experience predicts future
• Stand for something test– Vision of future
• Outside leadership test– Volunteer organizations
Service Quality is a Global Issue
The Possession of Facts is Knowledge,
the Use of Them is Wisdom
Thomas Jefferson
To Be Fond Of Learning Is Near To Wisdom
Confucius
Thank You