The “GAP” model of service quality was given by Parasuraman et al, V.A. Zeithaml et. al and Leonard L.Berry. The model explains an integrated view of the consumer-company relationship.
It is also an extension of the Gronroos model and talks about the perception gap.
The model is essentially based on service quality delivery gaps or deficiencies within the organization that prevent the delivery of high-quality service to customers. It has been recognized that satisfaction is irrevocably and strongly linked to quality perception.
The gaps model is useful as it allows management to make an analytical assessment of the cause of poor service quality.
If the first gaps are great, the task of bridging the subsequent gaps becomes greater, and indeed it could be said that in such circumstances quality service can only be achieved by good luck rather than good management.
GAP Model of Service Quality
GAP Model of Service Quality – 5 Gaps that may Cause Customers to Experience Poor Service Quality (With Examples)
Businesses using SERVQUAL to measure and manage service quality create a questionnaire that measures customer expectations of service quality in terms of these 5 dimensions, and their perceptions of the service they receive. When customer expectations are greater than their perceptions of received delivery, service quality is deemed low.
SERVQUAL authors identify 5 Gaps that may cause customers to experience poor service quality perceived deliver.
It identifies five ‘gaps’ that cause unsuccessful delivery:
GAP 1:
Gap between Consumer Expectation and Company Perception:
This gap arises when the company/management does not correctly perceive what the customers want.
Key factors leading to this gap are:
i. Insufficient marketing research.
ii. Poorly interpreted information about the customer’s expectations.
iii. Lack of communication and understanding between the front lint personnel and the top level management.
Examples:
A wireless telephone service provider may think that their customers want lower tariffs for calls, but the customers may be more concerned with the range of network coverage of the provider.
In a hospital, the administrators may think patients want better food, but patients may be more concerned with the care given by nurses and support staff.
GAP 2:
Gap between Management or Company Perception and Service Standards:
Here the management might correctly perceive what the customer wants, but may not set an appropriate performance standard.
Gap 2 may occur due the following reasons:
i. Lack of planning
ii. Lack of management commitment
iii. Unclear service design.
Examples:
In a Travel and tourism company the management may instruct their employees to respond to booking enquiries of customers fast and efficiently, but the management has not mentioned how fast and efficiently. They have not set standards to their process.
An IT company may ask their employees to solve customer complaints quickly, but it doesn’t mention how quickly (within 24 hours 2 day, 3 days etc.)
Here even though the management or service provider is aware of what the customers want, they aren’t able to satisfy the customers due their lack of planning and standards.
GAP 3:
Gap between Service Standards and Service Delivery:
This gap may arise owing to the service personnel. The reasons being poor training, incapability or unwillingness to meet the set service standard.
The possible major reasons for this gap are:
i. Deficiencies in human resource policies such as – ineffective recruitment, role ambiguity, role conflict, improper evaluation and compensation system
ii. Ineffective internal marketing
iii. Failure to match demand and supply
iv. Lack of proper customer education and training.
Examples:
In an upscale restaurant, if the waiter/server is not courteous and hospitable, the customer may become unhappy with the entire service experience even if the food served complies with his quality standards.
In a hair salon franchise like Lakme Salon, the management has set standards and have specifications regarding service quality. If a hair dresser is inexperienced and doesn’t do a good job of cutting their client’s hair, this results in customer dissatisfaction due to GAP3
GAP 4:
Gap between Service Delivery and External Communication:
Consumer expectations are highly influenced by statements made by company representatives and advertisements. There are numerous factors which influence the customer. This gap arises when these assumed expectations are not fulfilled at the time of delivery of the service.
The discrepancy between actual service and the promised one may occur due to the following reasons:
i. Over-promising in external communication campaign
ii. Failure to manage customer expectations
iii. Failure to perform according to specifications.
Examples:
The hotel printed on the brochure may have clean and furnished rooms, but in reality it may be poorly maintained in this case the customer’s expectations are not met.
A insurance company may promise large returns to the policy holder but in reality, the fine print in the policy may be different than what was promised to the customer.
An individual may go to a shopping mall on his friend’s recommendation, thinking that the 50 % off sale is still on in his favourite store, only to find that the sale concluded the previous day.
GAP 5:
Gap between Expected Service and Perceived Service:
This is the gap between what customers expect from the service and what they think they have received. This gap arises when the consumer misinterprets the service quality. This may happen due to customer’s own bias or prejudice. Customer expectation is what the customer expects according to available resources and is influenced by cultural background, family lifestyle, personality, demographics, advertising, experience with similar products and information available online.
Customer perception is totally subjective and is based on the customer’s interaction with the product or service. Perception is derived from the customer’s satisfaction of the specific product or service and the quality of service delivery. The customer gap is the most important gap and in an ideal world the customer’s expectation would be almost identical to the customer’s perception.
Examples:
When a student signs up for an online course, he expects the course to increase his domain knowledge, however, after taking a few lectures online, he may think that he hasn’t received the perceived amount of knowledge.
A doctor may ask the patient to keep visiting him often in a short span of time to show and ensure care, but the patient may interpret this as an indication that something is really wrong with his health.
Critical Incident Model:
CIT, a method that relies on a set of procedures to collect, content analyze, and classify observations of human behavior, was introduced to the social sciences by Flanagan in 1954. This type of method is used in research to track service failures. The participants are asked to narrate a ‘story’ or incident which caused dissatisfaction or resulted in failure in service by the provider.
A critical incident is an event, that can be described in detail, and that deviates significantly, either positively or negatively from what the customer considers normal in a service encounter. This method or technique is used to identify where the service failed from the customers point of view. The feedback by the customer is very immediate in services, unlike goods, which can be consumed later, services are consumed immediately in front of the service provider.
The customer also forms an opinion, either positive or negative, about a service almost immediately. Service providers understand that customers who have negative experiences will spread a negative word of mouth which will result not only in loss of business from that disgruntled customer but also from potential customers who will not avail services after listening to negative publicity.
The following are examples of the kinds of questions that are asked in a Critical Incident technique study:
i. Think of a time, when, as a customer, you had a particularly satisfying or dissatisfying interaction with an employee of XYZ Company?
ii. What was the interaction about?
iii. When did the incident take place?
iv. What circumstances led to this incident?
v. What resulted in you feeling satisfied/dissatisfied with the interaction?
GAP Model of Service Quality – With Causes and Reasons of the Service Quality Delivery Gaps
The definition of high quality is neither static nor identical in every situation. The model is essentially based on service quality delivery gaps or deficiencies within the organization that prevent the delivery of high-quality service to customers. It has been recognized that satisfaction is irrevocably and strongly linked to quality perception.
Gap 1 – Not Knowing what Customers Expect:
The first type of gap is one that exists between the ‘expected service’ and the ‘company perceptions of. ‘Expected service’ is the highest level of desired service existing in the minds of the customers. ‘Company perceptions of consumer expectations’ is nothing but the company’s understanding of what the customers want. This is the gap brought about by either ignorance or misunderstanding of the customer expectations.
What causes this gap?
The typical reasons are:
i. No direct interaction with customers – The service providers see themselves as indifferent or superior to customers. This typically happens in government-run services such as railways or postal departments where they would not want to know about customer desires.
ii. Unwillingness to ask customers about expectations – Service providers may believe that they know what is best for their customers. This is the patronizing attitude towards the customers.
iii. Unpreparedness to address the expectations – The service provider may be aware of the shortfalls but may be unprepared to address the issue in the mistaken belief that the customers may be tolerant or that the lapse is unlikely to result in loss of customer patronage.
iv. Lack of market segmentation to understand the needs of each segment – Segmentation is usually done to understand the needs of customers more elaborately or distinctly. If the needs are not precisely understood due to lack of segmentation, quality perception is likely to be poor.
Gap 2 – Inability to Set the Right Type of Standards:
The customers may have service standard expectations that may be either higher or lower than the standards set by you.
The following reasons may cause this gap:
i. Absence of customer-driven standards of service delivery – The standards for quality improvement or planning should be clearly those which are desired by the customer rather than those set by only the service provider. Thus the involvement of the end user/customer in the goal-setting process is crucial to its success.
ii. Absence of formal quality-control goals – It is not enough to say that quantification is not possible and, therefore, formal goals cannot be set for services delivery. Even subjective assessment may be vital in setting the standards.
iii. Vague or undefined service design – The service design may have been running traditionally for a number of years without any alteration, or it may have been borrowed from some other concept. Defining the service would go a long way towards determining the standards of customer satisfaction.
Gap 3 – Not Delivering to Service Standards:
This is the most common type of failure brought about by the day-to- day difficulties in services delivery.
The common causes for this failure are:
i. Lack of right type of employees or their training in service delivery – The front-end employees involved in services delivery require certain qualities that enable them to relate to and deal with customers. They require training to achieve this.
ii. Lack of empowerment of the employees – Delayed resolution of a customer demand for service usually results in dissatisfaction. It may be essential to give more decision-making powers to the front-end employees in order to resolve disputes quickly and amicably.
iii. Lack of training to the franchisee’s staff – Whenever service is provided by a franchisee in lieu of the service provider, the front-end employees of the franchisee require elaborate training to be able to cope with the customer demands in a standardized and pre-deter- mined manner.
iv. Failure to predict/match supply and demand fluctuations – When demand for a particular service exceeds the supply capacity, the general tendency is to shorten the process of the service delivery to speed up the process. Usually, in this case, the quality of the service delivered deteriorates.
v. Insufficient customer education – The customer is as much involved in the process of services delivery as the service provider. Therefore, training the customer to receive the service to derive maximum benefit is essential.
Gap 4 – Mismatch between Promises and Performance:
There is a great temptation to promise the world in order to win over customers. However, it would be either physically impossible or financially unviable to provide all that was promised. This usually results in customer disappointment.
The typical reasons for this kind of failure are:
i. Unrealistic communication to customers – In the anxiety to strike a deal or market the service, sales personnel promise more than what they can ever deliver. Such communication can be either formal or informal. Usually, customers set the service expectations according to such delivery and price quotations.
ii. Over-protnising through advertisement or personal selling – During the marketing phase, the sales force may go beyond the original script to strike the deal. While customers may be lost to competition due to under-promising, they may be lost due to overpromising as well.
iii. Lack of internal communications – If during the personal selling phase a commitment was made to strike the deal, it is essential to convey this message to the other people in the organization, especially the production team, failing which, they may not be able to keep up with this additional conceded demand.
GAP Model of Service Quality – Given by Parasuraman et al.
The “GAP” model of service quality was given by Parasuraman et al. The model explains an integrated view of the consumer-company relationship. It is also an extension of the Gronroos model and talks about the perception gap.
Gap 1 – The Customer Gap – The Gap between Customer Expectations and Customer Perceptions:
The customer gap can be explained as the difference among the customer expectations and customer perceptions. Here the Customer expectation would be what the customer expects from the service delivering company as per the given resources. This expectation of the consumers is influenced by culture, family lifestyle, demographics, personality, advertising, and prior experience with similar services.
Customer perception is by far subjective and is formed by the customer’s interaction with service. Perception would be the customer’s satisfaction of the specific service and what he feels about the quality of service delivery. The best way to fill this gap would be to understand the customer needs and customer expectations.
Gap 2 – The Knowledge Gap – The Gap between Consumer Expectation and Management Perception:
The knowledge gap is said to be the difference among the customer’s expectations of the service delivered and the company’s actual delivery of the service. This gap could come because the manager have not rightly interpreted the customer’s expectation as is in the relation to the company’s services. Thus the company moves towards non-existing consumer needs. This gap can be reduced by a comprehensive market research.
Gap 3 – The Policy Gap – The Gap between Management Perception and Service Quality Specification:
As per Kasper et al, this gap shows the management’s incorrect communication of the service delivery standards into rules and guidelines for the employees. Some companies cannot make their employee understand the consumer expectation and the specific service quality delivery. The same is prominent by the poor service design, and lack of standardization. Thus the consumers start searching a better service elsewhere.
Gap 4 – The Delivery Gap – The Gap between Service Quality Specification and Service Delivery:
Here the main reason of this gap is the employee performance. Some companies can communicate the right consumers expectation to the employee but might fail to train their employees to build good processes and action plans.
Some reason of the gap could be that the employees lack the service knowledge and cannot manage the customer’s questions and issues, poor human resource or lack of cohesive teams or the inability to deliver.
Gap 5 – The Communication Gap – The Gap between Service Delivery and External Communications:
Many a times the companies make promises to the customers through advertising media. This raises the customer expectations. Thus the over-promising in advertising will not match the actual service delivery and create a communication gap.
GAP Models of Service Quality – With Examples, Causes and Strategies for Reducing the Gaps
The difference between customer perceptions and expectations. Customer perceptions are subjective assessment of actual service experience Customer perceptions and customer expectations play an important role in service marketing. Customer expectations are the standards if or reference point of performance against which service experiences are compared, and often formulated in terms of what a customer believes should or will happen.
For example, when you visit a fast-food restaurant you expect a certain level of service, one that is considerably different from the level you would expect in an expensive restaurant. The sources of customer expectations consist of marketer- controlled factors as well as factors that the marketer has a limited ability to affect (innate personal needs, word-of-mouth communications, and competitive offerings).
In a perfect world, expectations and perceptions would be identical; customers would perceive that they receive what they thought they would and should. In practice these concepts are often, even usually, separated by some distance. Broadly, it is the goal of service marketing to bridge this distance. The assumptions appears to be that services, if not identical to goods, are at least similar enough in the consumers mind that they are chosen and evaluated in the same manner.
The gaps model is useful as it allows management to make an analytical assessment of the cause of poor service quality. If the first gaps are great, the task of bridging the subsequent gaps becomes greater, and indeed it could be said that in such circumstances quality service can only be achieved by good luck rather than good management.
Gap 1 – Not Knowing what Customers Expect:
Not knowing what customers expect is one of the root causes of not delivering to the customer expectations gap one is the difference between customer expectations of the service and company understanding of those expectations. Examples abound — foreign banks were right in thinking that customer expectation in terms of ambience was not being met. So, they brought in some good ambience and more presentable executives and thought they had bridged the gap.
But what they did not understand was that the customer was taking note of the lack of ambience because there was a wait when he was twiddling his thumbs and looking around for a place to sit. In other words, he was really complaining about the lack of speed and ease of operations. Result – Fancy ambience and higher cost attached to the same slow and indifferent service – albeit by better looking personnel in better surrounds. Private sector banks understood the problem a mite better — but they too slipped up as business grew. They lost out on sustainability of the service promise.
Example:
A contractor using an electrical subcontractor for the first time may expect the subcontractor to use a certain grade of wire conduit in all of their construction sites they subcontractor, however, may think the contractor wants to use the lowest grade to keep the cost down. Unless the contractor clearly delineates his expectations, he will probably be dissatisfied because the subcontractor did not do what was expected.
The reverse may also occur. Management can provide a service they think customers expect without conforming customer expectations. Although on the surface this sounds good because customer expectations will probably be exceeded, there are two dangers. First, if customer expectations are consistently exceeded, in time, these expectations will rise to meet the service being provided.
Example – If customers do not expect their cars to be vacuumed and cleaned inside when the oil is changed at Quik Lube, then at first they will be pleased with this extra touch. But the next time they use Quik Lube, their expectations increase and after a few times of receiving this special touch, it will become a permanent part of their expectations.
Failure to vacuum and clean the interior of the car will then result in a negative gap since the vacuuming and the cleaning of the interior becomes something customers expected. The second danger is that the firm may be spending money on providing services that the customers do not expect or perhaps even care about, thus yielding a negative impact on profit.
i. No Direct Interactions with Customers:
When people with the authority and responsibility for setting priorities do not fully understand customers’ service expectations, they may trigger a chain of bad decisions and suboptimal resources allocations that result in perceptions of poor service quality. One example of displaced priorities stemming from an inaccurate understanding of customers’ expectations is spending far too much money on buildings and appearance of a company’s physical facilities when customers may be much more concerned with how convenient, conventional and functional the facilities are.
Another example is illustrated by the management of Sears in the early 1990s, when the company failed to understand that the customers had changed their desires and modes of shopping. The company kept its traditional catalogue store long after customers had decided to take their business elsewhere. In the mid-1990s, Sears management rediscovered its customers, now defined primarily as women, and began once again to be profitable and satisfying to customers.
The service providers see themselves as indifferent or superior to customers. This typically happens in government-run services such as railways or postal departments where they would not want to know what customer desires.
ii. Unwillingness to Ask Customers about Expectations:
Service providers may think that they know what is best for their customers. This is the patronising attitude towards the customers. In today’s changing organisations, the authority to make adjustments in service delivery is delegated to empowered teams and front-line people. For example, when AT&T asked its long-distance operators to improve their service to customers, the team identified key customer segments and conducted its own customer research to determine expectations. Gap one was closed without involving management as it is traditionally defined.
iii. Unpreparedness to Address the Expectations:
The service provider may be aware of the shortfalls but may be unprepared to address the issue in the mistaken belief that the customers may be tolerant or that the lapse is unlikely to loss of customer patronage. Another trend related to gap one involves current company strategies to retain customers and strengthen relationships with them. The term relationship marketing is used to describe this approach, which emphasises strengthening the bonds with existing customers. When customers have strong relationships with their customers, gap 1 is less likely to occur.
iv. Lack of Market Segmentation to Understand the Needs are such Segment:
Market segmentation is the grouping of customers sharing similar requirements, expectations and demographic or psychographic profiles. Segmentation is usually done to understand the needs of customers more elaborately or distinctly. While segmentation has been used by marketers for decades, it may be more critical today than any other time.
Customers are no longer satisfied by homogeneous products and services for the mass market; now, more than ever before, they are seeking and buying services that fit their unique configuration of needs. If the needs are not precisely understood due to lack of segmentation, quality perception is likely to be poor.
Strategies for Reducing Gap One:
Service firms have four strategies available to them to reduce the size of gap one. These strategies are, communicating with the customers, conducting marketing research, encouraging upward communication in the organisation, and decreasing the number of layers of management. By talking to customers, management will learn what buyers expect in terms of service quality and how they feel about the service they received. Contact and communication between customers and management is common in small business because the owner is often the service operator.
Buyer may not always be honest in their communication with management of service firm. To ensure open, honest communication, service firm can use marketing research, which can either be performed by third parties or, in case of large cooperation, by the marketing department. To be effective, the marketing research much focus on service quality issues and consumer expectations of the service.
For firms where management is separated from the customer contact personnel, upward communication is vital in reducing the size of gap one. Service contact personnel must be encouraged to communicate with management in an open, nonthreatening environment. To be effective, upward communication must be requested by top management. Ideas for improvement should not only be sought from service contact personnel, but employees should be rewarded for productive ideas.
As the layers of management increase, the chances of management having a correct understanding of what customer want in terms of service quality became more difficult. Many service firms, therefore, are seeking means to reduce the number of management layers.
For much small business, service quality is the major issue in the selection of their telecommunications provider. According to Tony Parella, executive vice-president of Allegiance Telecom of Dallas, “People buy from us because they don’t necessarily feel appreciated by regional Bell carrier”. The goal of Allegiance management is to provide customers with personalised service.
To ensure management hears about customer concerns and to ensure Allegiance communicate effectively to customers, Allegiance has instituted a customer Bill of Rights and place a customer-service manager in each branch. These actions have been a major step for Allegiance in reducing the size of gap one and ensuring a high level of customer satisfaction. Formal and informal methods to capture information about customer expectations can be developed through market research.
Techniques involving a variety of traditional research approaches must be used to stay close to the customer, among them customer visits, survey research, complaint systems, and customer panels. More innovative techniques such as quality function deployment, structured brainstorming, and service quality gap analysis are often needed. Many marketers are achieving success with niche marketing – targeting segments of customers and developing services and strategies that fit their needs better than other companies’ offerings.
Other marketers are embracing the concept of mass customisation – creating services for a large group of customers that can be customised or appear to be customised through technological innovations. Technology affords companies the ability to acquire and integrate vast quantities of data on customers that can be used to build relationships.
Frequent flyer travel programmes conducted by airlines, car rental companies, and hotels are among the most familiar programmes of this type. Relationship marketing is distinct from transactional marketing, the term used to describe the more conventional emphasis on acquiring new customer rather than on retaining them. When companies focus too much on attracting new customers, they may fail to understand the changing needs and expectations of their current customers.
Gap 2 – Not Selecting the Right Service Designs Standards:
Accurate perceptions of customers’ expectations are necessary, but not sufficient, for delivering superior quality service. Another prerequisite is the presence of service designs and performance standards that reflect those accurate perceptions. A recurring theme in service companies is the difficulty executives, managers, and other policy-setters experience in translating their understanding of customers’ expectations into service quality specifications.
Gap 2 is the difference between the company understanding of customer expectations and development of customer driven service designs and standards. Customer driven standards are different from the conventional performance standards the most services company establish in that they are based on pivotal customer requirements that are visible to and are measured by customers. They are operation standards set to correspond to customer expectations and priorities rather than to company concerns such as productivity or efficiency.
Example:
In the billing division in debit cards, companies charge a hefty interest rate on outstanding amounts. They, however, fail to check with the department that handles inflow of payments and updating of outstanding amounts. Often, a cheque is sent in on the due date and a statement with the finance charge sent out on the same date. The customer is hopping mad as he has paid up on due date, the debit card company claims that interest starts ticking on due date.
Everyone has a valid reason, but the situation is a mess. In many of these cases, one observes a reluctance to tackle the problem head-on and a lack of commitment to providing quality service. While customer-contact personnel are key to providing quality service, leadership plays a pivotal role in ensuring that quality standards are in place and adhered to.
i. Absence of Customer-Driven Standards of Service Quality:
The standards for quality improvement or planning should be clearly those which are desired by the customers rather than those set by only the service provider. Thus, the involvement of the end user/customer in the goal setting process is crucial to its success.
ii. Absence of Formal Quality Control Goals:
It is not enough to say that quantification is not possible and, therefore, formal goals cannot be set for services delivery. Even subjective assessment may be vital in setting the standards.
iii. Vague or Undefined Service Design:
The service design may have been running traditionally for a number of years without any alterations, or it may have been borrowed from some other concept. Defining the service would go a long way towards determining the standards of customer satisfaction. Poor service design may also be a result of failure to connect service design to service positioning.
iv. Resource Constraints:
A service firm may understand and even want to deliver services desired by the customers but is unable to because of resource constraints. Example, a local air- conditioner dealer knows that customers want quick repairs. However, demand for both services in springs and early summer will exceed the firm’s capacity to provide the service. The number of technician available to repair AC is limited and the number of hours they can work is limited. Because of personnel constraints these services cannot meet customer expectations for quick service during the peak demand time.
v. Market Conditions:
The most competitive market condition impacting this gap is known as competitive parity, a situation where competitors produce almost identical quality goods and services. To prevent a competitor from capturing additional market share, companies often match a competitors offering. In some cases, firms translate customer expectations into matching competitive offerings rather than meeting the wants of their customers.
If this is done there will be a gap between what firms know customer expect and service pacifications, or what the firm actually provides. For example, an airline may know that passengers want more leg room in the airplane but they do not translate this in service specification. They do not put the seats further apart since other airlines are not doing it and to do so would reduce the potential passengers load.
A second market condition affecting gap two is monopoly markets such as cable television services, utilities, and basic telephone services. Each operates with a virtual monopoly with no competitors. These firms may understand certain needs and expectations of their patrons but may not translate them to service specifications unless required to do so by a government agency supervising them.
Their rationale for permitting this situation may be that the cost of meeting customer expectations is higher than the additional revenues that could be generated if the change were made.
vi. Management Indifference:
Management may talk about providing high quality service, but in actual practice they may offer only the minimum level of service that will suffice. The goal is not to provide customer satisfaction but to avoid customer dissatisfaction. In the short run, this philosophy may succeed and may even generate greater revenues because more customers can be served. But in the long run, customers will switch to competitors who provide better service. Management complacency is a problem in many corporate owned service facilities because of the pressure to generate short term profits.
vii. Inadequate Service Leadership:
a. Perception of infeasibility
b. Inadequate management commitment.
Strategies for Reducing Gap Two:
To reduce the size of gap two, service firms must have the commitment of top management. Many mission statements have references to the firm being committed to providing customers with high level of service quality. However, in actual practice, firm often emphasis on cost reduction, gross sales, and net profit rather than a high level of quality.
There are two reasons for the discrepancy between mission statements and actual practice. First is the difficulty of measuring service and the ease of measuring costs, sales and profits. Second, the current reward system is often based on non-service criteria. Most managers are promoted and rewarded for generating greater sales, increasing net profits, reducing costs, not for enhancing service quality.
If service firms are going to get serious about providing high quality service, they must start with a commitment by management. Not only must the management be committed to providing a high level of service, they must also set an example for their employees. Managers who talk service but fail to deliver an example of good service are not committed.
Reduction of this gap requires setting service quality goals. These goals must be set with the customer, the service contact provider and management in mind. Customer contact employees must understand management’s perspective and the need to generate a profit. In exchange, management must understand what is possible and what is not in terms of operations. Service contact personnel can provide their supervisors with valuable input into the best process for achieving service quality goals.
To be effective, the goals must be customer-oriented. The service quality standards must be what customers want and desire. Including in the goal setting process is advantageous to both management and service contact personnel.
Task standardisation will also reduce the size of gap two. Standardisation can be achieved through hard technology (substituting machines or computers for people) or soft technology (improving work methods). Both methods are designed to standardise the operation and provide a uniform delivery of the service to customers, reducing the gap between management perception of consumer expectations, and the translation of those expectations into service quality specifications.
Example:
Hard technology can be used to completely replace the human provider as in case of ATMs or it could be used to improve the consistency of service, as in the case of the diagnostic computer used by auto mechanics and the automatic scrubbing machines used by cleaning the service.
Example:
The standardised employee training procedure used by McDonald’s, the pre-packaged tours offered by many travel agencies, and the buffet used by Pizza Hut. By standardising the training McDonald’s strives to ensure that all employees use the same procedure in preparing food for their customers. No matter where one buys a McDonald’s hamburger, it will look and taste the same. The same concept applies to pre-packaged tours offered by travel agencies and a lunch buffet offered by Pizza Hut.
Closing gap two by demonstrating strong leadership commitment and by setting customers’ performance standards – has a powerful positive impact on closing the customer gap. Leadership plays a pivotal role in providing service excellence.
Strategic measurement systems are also necessary to close this gap. While company measurement has historically been the bailiwick of finance and accounting, management strategies now call for the addition of key marketing indicators in the overall measurement programme.
To achieve competitive superiority in an era when satisfying a customer is a priority, companies need measurement systems that incorporate and align measures of customer perceptions and satisfaction with pivotal operational and performance indicators. Sam Walton of Wal-Mart is hailed as a service leader worldwide.
His service philosophy to, spur on his people and organisation is as follows:
i. Realise that customer-service is the key.
ii. Design for comfort and convenience.
iii. Provide one-stop shopping.
iv. Customise
v. Invert the organisational chart so that the customer is on the top and the management is at the bottom.
vi. Empower the sales staff.
vii. Provide servant leadership – Wal-Mart’s managers are servants to the needs of their employees and customers.
viii. Recognise that the customer is always right.
While Sam Walton’s philosophy may appear simplistic, it was his adherence to these very principles that led to the soaring growth of Wal-Mart in the 1990s, when others were retrenching and cutting down on costs.
Gap 3 – Not Delivering to Service Standards:
Gap 3 is the discrepancy between developments of customer driven service standards and actual service performance by company employees. Even when guidelines exist for performing services well and treating customers correctly, high quality service performance is not a certainty. Standards must be backed by appropriate resources (people, systems, technology) and also must be supported to be effective – that is, employees must be measured and compensated on the basis of performance along those standards.
Thus, even when standards accurately reflect customers’ expectations, if the company fails to provide support for them – if it does not facilitate, encourage, and require their achievement – standards do no good. When the level of service delivery performance falls short of the standards, it falls short of what customers expect as well. Narrowing Gap 3, by ensuring that all the resources needed to achieve the standards are in place reduce the gap.
Another problem associated with the bridging of provider gap 3 is that of dealing with franchisees, agents, retailers and brokers. Because quality in service occurs at the moment of truth, i.e., at the point of interaction between the service provider and the customer, control over the service encounter by the company is crucial, yet it is rarely possible.
When one NUT franchisee falls short of set educational standards, it reflects on the company as a whole. When food at one outlet of Birdy’s, McDonald’s or Croissants, etc., is below quality standards, the image of the entire chain is tarnished. For this, the firm needs to develop systems to either control or motivate these intermediaries to meet company goals.
Primary causes of this gap are variable and inseparable nature of services. Because most services are performed by people, the quality of service is highly dependent upon well the service provider performs his or her job. If the service contact personnel provide services as specified, customers are usually satisfied and their expectations are met, if employees do not provide the service as specified in the service specifications, customer expectations will not be met and customers will be dissatisfied.
i. Deficiencies in Human Resources Policies:
a. Ineffective Recruitment – The front-end employees involved in services delivery require certain qualities that enable them to relate to and deal with customers. They require training to achieve this.
b. Role Ambiguity and Role Conflict -These include employees who do not clearly understand the role they are to play in the company, employees who feel in conflict between customers and company management, the wrong employees.
c. Poor employee-technology job fit.
d. Inappropriate evaluation and compensation systems.
e. Lack of empowerment, perceived control, and teamwork.
These factors all relate to the company’s human resource function, involving internal practices such as recruitment, training, feedback, job design, motivation, and organisational structure.
ii. Failure to Match Supply and Demand:
When demand for a particular service exceeds the supply capacity, the general tendency is to shorten the process of the service delivery to speed up the process. Usually, in this case the quality of the service delivered deteriorates.
a. Failure to smooth peaks and valleys of demand
b. Inappropriate customer mix
c. Over reliance on price to smooth demand
iii. Customers Not Fulfilling Roles:
The customer is as much involved in the process of services delivery as the service provider. Therefore, training the customer to receive the service to derive maximum benefit is essentials.
a. Customers lacking knowledge of their roles and responsibilities.
b. Customers negatively impacting each other
iv. Lack of Training to the Franchisee’s Staff:
Whenever service is provided by a franchisee in lieu of the service provider, the front-end employees of the franchisee require elaborate training to be able to cope with the customer demands in a standardised and predetermined manner. Most service companies face and even more formidable task – attaining service excellence and consistency in the presence of intermediaries who represent them, interact with their customers, and yet are not under their direct control. Among the intermediaries that play a central role in service delivery are retailers, franchisees and dealers.
Strategies for Reducing Gap Three:
A common characteristic of successful service companies is teamwork. A feeling of teamwork is created when employees see other employees and management as key members of the team. The lowest-level employee must feel that management; from their immediate supervisor to the CEO of the company, cares about them and that they are a critical part of the firm’s success. There must be a spirit of cooperation, not competition, among employees.
All of this is achieved when every employee is involved in the company and committed to providing a high level of service to customers, to the company, and to other employees. For instance, Southwest Airlines is often cited as a service provider with excellent teamwork. If employees are to provide the services according to the job specifications, there must be a fit between employee skills and job requirements. Firms must hire individuals who have the ability to perform the job. Once hired, management must be sure each employee has to do the tasks according to the company’s procedures.
Because of teratology, many service firms are using machines, tools, and computers to assist service workers in their job. To perform their job according to company standards, service employees must have the proper equipment. The equipment needs to be in good condition and the employees must have the knowledge and training to properly use the technology to enhance the quality of their work.
To diagnose problems with newer automobiles, computerised diagnostic equipment is essential. The quality of diagnosis is dependent upon the quality and condition of the equipment and the ability of the service technician to operate it. In cleaning carpets in homes and offices, the operator of the equipment can perform a good job only if the shampoo machine is running properly and he or she has the ability to operate it.
An important factor in reducing gap 3 is the concept of perceived employee control. When employees are allowed some flexibility and control in the service process, morale is enhanced, and there is a greater desire to perform the service properly. Flexibility and control also allow service employees to modify the process to meet the particular needs and desires of customers.
In addition, by having control of the service encounter, the outcome of the service will become more predictable. The supervisory control system will have an impact on the size of gap 3. If service employees are encouraged and rewarded for meeting job specifications, the likelihood of employees doing the job according to the specifications increases.
However, supervisors often tell employees to follow the correct job specifications but reward or punish employees on other criteria, which is called role conflict. For example, employees may be evaluated by their supervisors on such criteria as a balanced cash register for a bank teller, the number of automobiles repaired by a mechanic, and the amount of time spent cleaning a particular office by a janitor. When this occurs, employees will shortcut the specifications to improve whatever criteria are used by their supervisors in their evaluations, often neglecting other service specifications.
Role conflict is inherent in many service contact positions. How this role conflict is handled will have an impact on how closely the service delivered matches the service specified. The primary conflict faced by service contact personnel is between expectations of customers and expectation of management.
This conflict is increased when employees are not given flexibility to meet the needs of customers, when employees have little control over how the service is to be performed, the amount of paperwork necessary to carry out the service, and the number of other employees a service provider must contact or use in the process of performing the service.
To reduce role conflict, management should allow service contact personnel adequate flexibility to meet customer needs. Employees need to have some control over the service encounter because the greater the control, the less role conflict experienced.
Control and flexibility mean service employees will not have to go to other employees and managers with questions and for permission to modify the service to meet a customers’ unique request. It is responsibility of the management to reduce the amount of conflict faced by their service employees. Not only does reducing role conflict aid service employers in meeting the needs of customers but it will increase job satisfaction, job morale and length of employment.
Role ambiguity refers to employees’ lack of information or understanding of their job and job requirements. As role ambiguity increases job satisfaction decreases. It also becomes difficult for employees to perform the necessary job specifications if they lack an understanding of what these specifications are.
Management often mistakenly assumes employees understand their job when, in fact, service contact personnel do not have clear understanding of goals and expectations. Although they have been told what to do, they may not have been told how the service is to be performed.
To reduce role ambiguity, service firms must do the following:
i. Provide frequent and clear downward communication from management on what is expected and how the service is to be performed.
ii. Provide employees with constructive feedback to help them understand how the service is to be performed and what management expects.
iii. Provide employees with product and service knowledge so they can perform their jobs better.
iv. Train and retrain employees in the proper method of performing their service.
v. Train service contact personnel to communicate effectively with customers, with supervisors, and with other employees.
Gap 4 – Mismatch between Promises and Performance:
Gap four is the difference between the service delivered to customers and the external communications made about the service. Promises are made to consumers by a firm’s advertising, sales promotions, and sales staff. These promises may be explicitly stated or they may be implied. If the firm does not provide the service that is promised, there is a gap between what customers expect and the service received.
As consumer expectations for a service increase, the profitability of patronising the firm will also increase. To increase patronage, firms are tempted to make promises that may be difficult or even impossible to deliver. Communication through these channels tends to raise customer expectations and set certain standards to assess the service in the minds of customers. Any discrepancy between promised and actual service tends to broaden the customer gap.
A recent advertisement by a leading pizza chain promised one free pizza with a specified order. On calling in for the offer, one found that the small print indicated that this offer was valid only at the counter and not on home delivery orders. Would the outlet have received so many calls if they had indicated this in bold type? While on the subject of pizzas, one wonders if Domino’s manages to keep its promise of delivering anywhere in 30 minutes – especially in Mumbai traffic. If not, they must be making heavy losses on free pizzas.
i. Ineffective Management of Customer Expectation:
a. Failure to manage customer expectations through all forms of communication – In addition unduly elevating expectations through exaggerated claims, there are others, less obvious ways in which external communications influence customers’ service quality assessments. Customers are not always aware of everything done behind the scenes to serve them well.
One bank executive indicated that customers were unaware of the bank’s behind-the-counter, online teller terminals, which would translate into visible effects on customer-service. By neglecting to inform customers of such behind-the-scenes efforts, the bank was foregoing an opportunity to favourably influence service perceptions.
b. Failure to educate customers adequately – In the anxiety to strike a deal or market the service, sales personnel promise more than what they can ever deliver. Such communication can be either formal or informal. Usually, customers set the service expectations according to such delivery and price quotations.
ii. Overpromising:
a. Overpromising in advertising – During the marketing phase, the sales force may go beyond the original script to strike the deal.
b. Overpromising in personnel selling – While customers may be lost to competition due to under promising, they may be lost due to overpromising as well.
c. Overpromising through physical evidence cues
iii. Inadequate Horizontal Communications:
a. Insufficient communication between sales and operations – If during the personal selling phase a commitment was made to strike the deal, it is essential to convey this message to the other people in the organisation, especially the production team, failing which, they may not be able to keep up with this additional conceded demand
b. Insufficient communication between advertising and operations
c. Differences in policies and procedures across branches or units
iv. Pricing of Services:
In packaged goods many customers possess enough price knowledge before purchase to be able to judge whether a price is fair or in line with competition. With services customers often have no internal reference point for prices before purchase and consumption. Pricing strategies such as discounting, “everyday prices” and couponing obviously need to be different in services in cases where the customers have no sense of the price to start with! Techniques for developing prices for services are more complicated than those for pricing of tangible goods.
Strategies for Reducing Gap Four:
To reduce the size of gap four, service firms must address two issues, horizontal communications and propensity to over promise. Service contact personnel should have input in the firm’s advertising and promotional to ensure that messages conveyed to the prospective customers can be operationally performed. The reverse is also true; service personnel should be informed prior to an advertising or promotional campaign.
In service organisations with field sales representatives, there must be communication between the salespeople and the personnel performing the service. Salespeople will often make promises to prospective customers to gain contacts. If promises are made, the operations department needs to be aware of it so they can ensure the promises will be delivered.
The tendency to over promise increases with pressure to achieve greater profits or to meet competitive claims. In both cases, severe damage to the firm’s image can occur since it is unlikely the firm can perform the service as promised.
Customers’ service perceptions may also be enhanced if the company educates them to be better users of the service. Service companies frequently fail to capitalise on opportunities to improve customers’ perceptions. As on bank executive observed, “We don’t teach our customers how to use us well and why we do the things we do”. Effectively coordinating actual service delivery with external communications therefore narrows provider gap 4 and favourably affects the customer gap as well.
Another function that must be involved in communication is human resources. For employees to deliver excellent customer-service, firms must serve the employees through training, motivation, compensation and recognition to have a powerful impact on the quality of service the employees deliver.
External communications – whether from advertising, pricing or the tangibles associated with the service – can create a larger customer gap by raising expectations about service delivery. In addition to improving service delivery, companies must also manage all communications to customers so that inflated promise; do not lead to higher expectations.