Chapter 7 – Services Strategy
- Explain the gaps in the service quality gaps model and understand how to manage customer expectations.
Given the unique or distinctive characteristics outlined above associated with services, it follows that service quality is more difficult to define and measure compared to physical goods. In this sense, service quality is one of the most critical challenges facing many companies. Therefore, it becomes important to understand how customers evaluate service and to understand and identify the gaps that may exist in quality service delivery.
We know that customers evaluate service quality based on the following aspects:
- Reliability: Often viewed as the most important aspect for customers in measuring service quality. Customers expect that a service will be provided dependably, accurately and consistently. Service has to be delivered right the first time and every time. If a service provider is reliable, they are able to build brand loyalty with customers.
- Responsiveness: Customers expect responsiveness when it comes to service delivery. What this may look like may includes returning customer calls in a timely manner, quickly serving lunch to someone in a hurry, or adhering by the appointment times requested by the customer.
- Assurance: Includes the ability for service provider employees to convey knowledge and courtesy in order to build trust. This is developed when employees treat customers with respect and make them feel that they can trust the service provider.
- Empathy: Refers to a service provider giving caring and individualized attention to customers. This can be achieved by learning customers’ names and their personal requirements.
- Tangibles: Given the intangibility of services, customers often turn to the tangible aspects available in the service delivery process. They will consider physical evidence of the service which may include the facilities, tools and equipment that are used in the delivery of the service (Zeithaml et al., 1990). ‡
Consequently, customers’ evaluation of overall service quality is based on a combination of all five aspects outlined above.
Knowing the way customers evaluate service, it is important to understand, identify and measure the potential gaps that may exist in the service delivery process. The Service Quality Gap Model (Lamb et al., 2019) shown in Figure 7.2 outlines the potential disconnects (failures) or gaps that may occur during the service delivery process. ‡
The service quality gap model identifies five potential ways that a gap may be created in service delivery and therefore effect customers’ evaluation of the service.
The first gap is known as the knowledge gap. This occurs when there is a disconnect between what a customer wants or expects in service quality and what the management team of the service provider thinks the customer wants or expects from the service delivery. This gap often occurs because there is a lack of understanding, by the service provider, of what a customer expects from the service. Customers’ expectations from the service may vary based on past experience with the service, personal need, or word-of-mouth. Service providers who do little to no customer research may experience this gap. In order to close the gap or ensure a gap is not created, it is important for service providers to stay familiar to customers’ needs and wants before the service is provided, well as understand their satisfaction after the service is provided. Both can be accomplished by conducting market research. Furthermore, gathering employee feedback can also help understand more about the customer experience and the knowledge gaps that may exist, as employees often speak directly with customers. These insights can similarly be gathered by conducting research, although the target of the research in this case would be employees (and their insights into customers) rather than the customers themselves. An advantage of this technique is that whereas consumers may be uncomfortable to discuss, or may forget to mention, certain negative aspects of their experiences, employees can provide these insights as outside observers. ‡
The second gap is the standards gap. This occurs when there is a difference between what the management team wants and the actual service delivery specification that management develops for employees to follow in delivering the service. The service delivery specifications are the detailed requirements in terms of how and what service should be provided. This can occur because of management’s inability to translate customer expectations in to delivery systems that can meet those needs. The other way to look at it is that the management team has not provided the appropriate service design and standards for employees to deliver the expected service. In order to close or prevent this gap, it is necessary for management to develop policies and procedures on how to deliver the service and to what standard. It also becomes important for management to develop metrics to measure the service standard and to provide the appropriate training to employees. ‡
The third gap is the delivery gap. This gap can occur when there is a disconnect between the service standard and the actual service delivered to the customer. If the first two gaps are closed, then the delivery gap can occur when employees are unable to do what should be done to deliver the service. This can occur when employees are not given the proper tools to deliver the service and the appropriate feedback when the service delivered does not meet the standard. Again training, tools and feedback are critical to close this gap. ‡
The fourth gap is the communications gap. This happens when there is a difference in what the customer is told they can expect and what service is actually delivered. Customers develop their expectations based on marketing communications materials developed by the service provider. To close this gap, it becomes especially important to be as realistic, honest, and accurate in marketing communications to provide consumers with an accurate representation of what they should expect when the service is delivered. ‡
The fifth and final gap is the expectation gap. This gap can appear when there is a difference in what the customer expects from the service (prior to consumption or purchase) and what the customer perceives of the service after it has been provided. This gap can be either positive or negative and can affect the customer perception of service quality. Therefore, it is important to understand customer perceptions through ongoing market research to manage their expectations (Mauri et al., 2013). ‡
It is vitally important that companies get service quality right. Based on customer research, 58% of customers indicated that they would switch service providers because of a bad experience . By understanding where the service quality gaps can occur, measuring the gaps and closing the identified gaps, will lead to happier and more loyal customers.