PACS | Understanding and Enhancing the Quality of Service Delivery

A. General Overview

Quality of service is by definition an abstract and subjective concept which differs significantly from one individual to another and varies in time and location. Understanding it and unlocking its potential to build customer loyalty is a complex endeavor that necessitates significant effort and discipline.

For the customer, quality of service is the comparison between service expectations and perceived service performance. It is a function of pre-purchase customer expectations, perceived process quality and perceived output quality. For the organization, quality of service is the ability to deliver service in line with internal specifications of quality, designed according to the management’s perception of customer needs and expectations.

Exhibit 1 illustrates the concept of quality of service and Exhibit 2 explains the multiple gaps that exist between expectations of the customer and the actual delivery of the service by the organization.

Exhibit 1 – Illustration of the concept of quality of service and the gaps that exist between customer and organization

1.

 Gap between management’s perception of customer’s expectations and actual customer’s expectations 

2.

 Gap between perception of customer’s needs and internal specifications of the quality of service to be provided

3.

 Gap between the internal specifications of the service quality and the actual performance of the service provided

4.

 Gap between external communication and actual performance of the service provided

5.

 Gap between customer’s perceived and expected service performance, which
result is his/ her perception of the quality of service provided

Exhibit 2 – Detailed service quality perception Gap Analysis between the organization and the customer

B. Understanding the Quality of Service

The service expectation of the customer is set using his/ her personal attributes. These attributes are influenced by:

•    Personal experience
•    Needs
•    Word of mouth
•    Communication made by the organization (e.g., advertisement)

I. Importance of Service Quality

Service quality attributes have different materiality and vary significantly, by industry, by period, by customer base segment, and from one customer to another. For example, the most common service quality attributes for the banking industry are:

1.    Access: the service is easily accessible to the customer. For example:

• a.    For branch banking: business hours are convenient, branch is located near or inside a shopping centre, etc.
• b.    For phone banking: waiting time is limited, IVR menu is easy to understand, handovers are minimal, etc.

2. Communication: bank employees listen to customers, keep them informed, and use a clear language they can understand

3. Reliability: bank employees perform the service right the first time, according to promises, and at the designated time

4. Responsiveness: bank employees are reactive, willing, and ready to deliver the service in a timely manner

5. Security: bank customers feel free from danger, risk, or doubt. This entails physical and financial safety, as well as confidentiality.

Less material attributes include: Aesthetics, Attentiveness, Availability, Care, Tidiness, Comfort, Commitment, Competence, Courtesy, Flexibility, Friendliness, Functionality, and Integrity.

II. Need for Service Quality

Service quality impacts customer satisfaction, which in turn contributes significantly to the organization’s profitability by improving retention, cross-selling, and word of mouth:

1.
 Customer retention: satisfied customers are less likely to switch 
 

2.
 Cross-selling: satisfied customers are more likely to buy
other products

3.
 Word of mouth: satisfied customers recommend the organization
to their friends and family.   

Nevertheless, most service-oriented organizations continue to lose significant potential revenue due to poor service quality. A widening gap exists between service performance achieved and service expected by customers. Measuring service quality remains key to marketing in any service institution, as it helps in measuring customer expectations and requirements and a key competitive differentiator for an ever-more demanding customer base. As a result, organizations are moving their focus from products and sales to customer-oriented marketing.

III. Achieving Service Excellence

Achieving total service quality (i.e., service excellence) entails:

1.
 Understanding customer’s expectations by identifying his/ her key service quality attributes
 

2.
 Defining high internal standards of service quality and improving
processes to meet/ exceed customer expectation along the identified
attributes

3.
 Ensuring service is provided according to specifications

4.
 Ensuring external communication accurately reflects the actual service quality delivered     

IV. Measuring Service Quality

Accurately measuring service quality is a long and painstaking undertaking:

1.   Production and consumption of services are inseparable, intangible, heterogeneous, and perishable

• a.    Intangible, i.e., a service is similar to a process, it cannot be seen, tasted, felt, heard, or smelled before it is purchased
• b.    Inseparable, i.e., a service is produced and consumed simultaneously
• c.    Heterogeneous, i.e., a service performance is highly variable from one service transaction to the other and depends on when, where, and by whom it is provided
• d.    Perishable, i.e., a service cannot be stored or saved. A service cannot exist if it is not consumed at the appropriate time. Consequently, service providers have less control for handling supply and demand fluctuations

2.   Service quality is intrinsic to every industry, institution, and customer base segment
3.   The perception of service quality differs from an organization or customer standpoint
4.   The perception of service quality differs from one customer to the other
5.   The customer perception of service quality changes with time

V. Organizational Obstacles

Several organizational obstacles internal to the organization hinder the achievement of service excellence:

1. Role conflict: employee is required to accomplish tasks that are incompatible with the expectations of his/her manager, colleagues or customers and these tasks cannot possibly be satisfied simultaneously
2. Role ambiguity: employee has an inadequate level of knowledge or information for the task to be accomplished
3. Weak IT system: support and problems caused by the tools used degrade service quality
4. Working material: satisfaction or dissatisfaction concerning material needs
5. Working environment: physical working conditions that influence the performance of the tasks assigned
6. Training: suitability of the training received for performing tasks in terms of quality and speed
7. Authority in decision-making: ambiguity in decision-making responsibilities
8. Back-office support: central services’ speed and efficiency

Less material obstacles include: Sincerity, Pressure, Cohesion, Innovation, Intrinsic recognition, Extrinsic recognition, Impartiality, and Service orientation.

C. Enhancing the Quality Service

To achieve high standards of service quality, an organization must implement a comprehensive program using an iterative 6-step approach, as illustrated in Exhibit 3.

Exhibit 3 – Service quality improvement approach

1. Ensure Leadership Engagement    
•    Define a clear vision around service
•    Sponsor improvement initiatives
•    Follow-up on improvement progress
•    Communicate consistently to stakeholders

2. Understand Customer Needs    
•    Analyze customer expectations/ perceptions (by product/service, by customer segment)
•    Analyze complaints

3. Establish Metrics    
•    Define key performance indicators (KPIs)
•    Link performance to compensation

4. Improve Processes    
•    Analyze delivery and support processes
•    Map against defined KPIs
•    Improve processes/ detail roles and responsibilities

5. Build Skills    
•    Define staff training requirements
•    Develop training material
•    Arrange/ hold training workshops

6. Drive/ Monitor the Business    
•    Drive the business with consistency, commitment, and discipline
•    Monitor service performance against established metrics
 

About PACS

PACS is a regional boutique strategy and management consulting firm covering the MENA region with offices in Dubai, Riyadh and Beirut.
Our work approach combined with our experience in leading projects in the MENA region give us an edge in achieving sought-after impact and implementable recommendations. We complement the typical consulting model by offering our clients hands-on, flexible, and quality support in key industries, from design to execution of solutions.
For more information, please contact us