Quality in Service Sector

Service - Definition

A service is the result of at least one activity necessarily performed at the interface between the supplier and customer. It is generally intangible. Examples include hotels, healthcare, banks and finance, education, travel and tourism, government organisations, internet, telecommunication, delivery and distribution services, engineering and construction, labs and testing facilities, energy services and so on.

Most services accompany products. Examples include after-sales service, warranty services, customer services and so in.

Characteristics of Services

Services have four unique characteristics. They are intangibility, inseparability, heterogeneity and perishability.

1. Intangibility: Services cannot be seen, touched, felt or heard in advance
2. Inseparability: Services are produced and consumed at the same time
3. Heterogeneity: Services depend on the provider and consumer and vary with individual
4. Perishability: Services cannot be stored for later use

Service Quality

The American Society for Quality (ASQ) defines quality as, "the characteristics of a product or service that bear the ability to satisfy stated or implied customer needs."

Service quality can be viewed in terms of customer service. Service quality is a combination of two aspects: Technical quality and functional quality. Technical quality of a service refers to the quality of the product received as a result of the service. Whereas functional quality refers to the way in which the service is delivered. Studies suggest that customer perception of a service depends on the functional quality of a service.

Society is maturing rapidly in terms information, education, standard of living and income. The user expectations and demands of services too are increasing.

Benefits of Quality in Service Sector

Quality in service sector brings a competitive advantage to the business. Managers across all levels in service sector have realised that quality management is an essential way to conduct business. Senior managers are interested in quality programmes to raise the standards of services.

Public sector recognises the benefits of quality in the service sector. In the last few years, ISO 9000 penetrated the military and police units, health care organisations, education sectors and so on.

Therefore, the process of improving quality in the service industry should follow the logical process used by their counterparts in the manufacturing sector:

1. Define quality
2. Develop quality standards
3. Measure quality
4. Develop effective corrective-action procedures
5. Make changes to eliminate quality problems
6. Integrate factors affecting quality

While implementing quality initiatives, service organisations face a host of 'human' related problems, which are often difficult to identify and correct unlike problematic production problems. According to Edwards Deming, lack of top management support and poor supervision can topple all quality efforts in service industries. Experts say that management has to instil a philosophy of continuous improvement and provide the required supporting organisational practices. Some of the crucial factors that hamper service quality include lack of teamwork, ineffective training, communications breakdown, lack of employee involvement and ineffective job responsibilities and performances. 

While it is widely accepted that human factors are crucial in all quality improvement efforts, they are critically important in the service sector. Studies reveal that in spite of having identical work environments, processes and systems, the quality of services provided by two different companies differ vastly due to 'human' rather than 'technological' factors. 

Measuring Quality in Service Sector

Service quality often tends to be measured paradoxically by the degree of dissatisfaction expressed by the customer. This degree of dissatisfaction, which is measured by customer complaints registered, is however, a very poor indicator of service quality. Estimates reveal that only one in 26 customers having problems actually takes the trouble of registering a complaint with the company. This implies that the company could be quite satisfied with itself, while the customer may actually be fuming in anger.

Improving quality in service sector

Five vital factors enable service organisations to improve quality of performance. 

1. Assess the effectiveness and impact of operating practices 

Organisations must first understand employees' perceptions at various levels on the need for improving service quality. Their support and confidence in the company's efforts for improvement should be analysed. This helps to identify steps to be taken by the organisation to move forward in its improvement initiatives. The feedback is an invaluable source of information on the general expectations and impetus for changes. 

2. Teamwork and management support crucial for long-term results

Management support is vital for any quality initiative. But what is not always evident is the necessity of its continued involvement and support to sustain the efforts. Top management should ensure that continuous improvement and cooperation are ongoing priorities for all employees. Roles and duties of managers must be clearly specified with continuous improvement as a vital target. Managers in the service industry should play a crucial role in critical practices like defining and refining quality standards, developing and implementing feedback mechanisms, involvement in corrective action teams and coaching. They must be selected, trained, promoted, appraised and rewarded based on their ability to foster continuous improvement. Without such a focus, the enthusiasm and support to improve quality will diminish with time.

3. People drive service quality

Employees are the key ingredients in any long-term quality improvement initiative and they respond positively when given appropriate support and leadership. Long-term improvements in service quality can be achieved by systematically addressing the 'human side of quality'. Employees must be trained to achieve optimal performance, develop effective conflict resolution skills, communication skills and teamwork. Employee feedback on issues that impact both continuous improvement and the workplace should be taken. The human element has to be given prime importance to avoid negative consequences. 

4. Quality efforts should continuously improve

Service quality will be enhanced when an organisation evolves and matures along with the dynamics of changing needs. Systematic approaches to long-term quality improvements should be scrutinised periodically. Corrective action procedures must be modified and streamlined, feedback mechanisms continually evaluated and improved and quality standards evolved. Without these adjustments, service quality will stagnate leading to negative consequences.

5. There is no substitute to leadership in service quality

Some vital questions to be addressed by managers of service organisations include:

1. Do I practice continuous improvement on an ongoing basis?
2. Do I encourage my employees to practice the same?
3. Am I providing leadership in addressing persistent quality problems?
4. Am I providing leadership to improve existing quality improvement processes?
5. Are the corrective action procedures and follow-ups being done efficiently?

Answers to these questions are critical and represent an organisation's leadership commitment to long-term continuous improvements.

Mystery shopping (also called ghost shopping) has been associated for long with more of an illusion or enigma. The marketing technique has been utilised effectively by major brands like Dell Computers, Kingfisher Airlines, Toyota , Marico and General Motors.

Who are the mystery or ghost shoppers?

Mystery shoppers are professionals ranging from independent consultants to employees ( full- time and part- time) appointed by leading retail stores, restaurants, banks, airlines, telecom service providers and other such customer--centric industries. Their primary job is to evaluate the quality, reliability and consistency of service offered by their respective employers. Their mode of operation is to visit the store or service area like any other customer to purchase a product or service. They are usually equipped with a set of standard questionnaires or checklists that include the Key Result Areas (KRAs) and Key Performance Areas (KPAs).

The KRAs may include the effectiveness of welcome norm for customers, knowledge level of sales executives, level of product/service demonstration, display of products at the store, etiquette and dress code of sales and customer service executives and so on. The KPAs may include billing time, processing time, effectiveness of answering queries and handling complaints and so on. This may be done through observation/interaction techniques or by recording the proceedings in a hidden video camera. The compiled report of such mystery shoppers is sent to the top management and/or marketing team.

Ghost shopping as a profession

Organisations are engaging ghost or mystery shoppers in a big way with a greater emphasis on enhancing shopping experience to ensure customer satisfaction and delight. In other words, mystery shoppers are paid handsome amounts to observe and complain in an objective yet critical manner.

This profession is becoming very popular among segments like students, housewives, retired professionals and even working professionals. All it requires is good observation skills, right temperament, good communication skills and an inquisitiveness to understand the gap between the desired and actual levels of service quality. Moreover, mystery shoppers should be unbiased and objective in their opinions.

From an organisational point of view, mystery shoppers are of immense benefit to understand customer expectations and perceptions in addition to delving into the service quality levels.

Key benefits of mystery shoppers for organisations include:

1. Objective third party opinion: This is provided by the mystery shoppers to the employees through the top management so that employees realise their shortcomings and overcome the same.
2. Improvement in employee performance: Employees are often driven to consistent performance due to the element of uncertainty regarding customers. Anyone could be the mystery shopper. This improves levels of employee productivity and service quality. This, in turn, serves as a useful input for employee appraisal and understanding training needs. It also serves as a useful comparison against the prevailing industry patterns and benchmarks.
3. Input for timely decisions: The feedback of the mystery shoppers provides the right input for the top management to take timely and proactive decisions. This minimises the threat of losing unsatisfied customers to competitors.
4. Understand customer expectations and perceptions: The interactions and questionnaires used by mystery shoppers to know customer opinions provide a useful insight into customer expectations and perceptions regarding the brand of the service provider besides quality levels.

The pitfalls

The use of mystery shoppers is not without its pitfalls. For example, mystery shoppers may not have the requisite analytical or observation skills to make an unbiased and correct judgement. Moreover, since they are paid to find shortcomings, mystery shoppers literally make a 'mountain out of a molehill'. They may exaggerate the faults of employees or service providers.

Moreover, the negative feedback of a mystery shopper may concern just a one-off performance of the employee - at other times, the employee may be a good performer. After all, the efficiency of an employee can never be the same every time. As a result, the timing and prevailing situation during ghost shopping will determine the feedback of the mystery shopper. From the employee perspective, mystery shopping increases job insecurity, lack of trust between the employee and employer and high pressure to perform consistently at all times.

Endpoint

The apparent shortcomings of mystery shopping notwithstanding, the technique is used by organisations in many countries to evaluate the quality of customer service levels in terms of internal standards and industry benchmarks. On most occasions, the parameters of evaluation include store appearance, staff etiquette and customer service quality. However, the efficacy and reliability of the input provided by mystery shoppers should be monitored carefully before any decision is taken based on the same.

Quality in the Service Sector: A Review

Quality in the service sector is of increasing concern to both academics and practitioners. Previously published material is reviewed and attention is focused on the importance of people and internal marketing in the changing environment of service industries, definitions and measurement of service quality and the service quality/customer care programmes presently being developed and implemented.

Measuring and Achieving Quality Customer Service in the Public Sector

This article advocates a value-based approach to achieving and managing customer service. It sees quality as being on a low-profile path in public sector organisations . The paper describes four stages - ideation, design, delivery and maintenance - by which a turnaround to a high-profile path can be achieved.

Towards quality e-service in the public sector: The evolution of web sites in the local public service sector

This paper provides a methodology for measuring the quality of e-service in terms of functional quality. It is based on the relationship between benefits for customers and web site technological complexity, assumed to be represented by the level of organisational changes adopted by firms.

Providing Quality in the Public Sector: A Practical Approach to Improving Public Services

By Lucy Gaster and Amanda Squires

This book presents a straightforward and comprehensive model for understanding quality and putting it into practice. Existing quality philosophies and approaches are examined. Overviews of recent policy on quality in central and local government, in the health service, and in public service partnerships are included. Finally, five practitioners present practical 'vignettes' of citizen involvement, local partnerships, and quality improvement in health, housing and local government.

Managing Quality in the Service Sector

By Mike Asher

This book provides step by step guidance of managing and implementing quality in service sector. The different challenges of implementing service quality and methods to overcome them are listed. The book provides latest and effective tools and techniques to implement quality in service sector organisations.

But We Are Different: Quality for the Service Sector

By John MacDonald

This book highlights the intricacies of quality for the service sector. It highlights how manufacturing sector is different from service sector. Further, the book details why and how the service sectors organisations benefit from implementing quality. It also discusses how service sector quality helps in building global quality.

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