One of the most important considerations of implementing a CRM strategy is the improvement in service quality. There is intense competition in the service industry. In addition, the external factors make the environment hostile for business organizations. Due to the competition and hostility, service quality has become one of the most decisive strategies that business organizations take to market their products and services (Asubonteng, et al., 1996). What this shows is how important service quality has become to business organizations. Service quality is one of the cornerstones for survival and growth. High levels of service quality enable business organizations to face the challenges that they are confronted with and continue to compete in the markets they are involved in. Business organizations that are service-oriented therefore, must provide excellent customer service. Customer service is a competitive advantage that business organizations focusing on the provision of services can adapt culture, expand and excel in. However, there is a need for these business organizations to fully understand the meaning of service quality and the reasons why building a strong service quality foundation is essential in ensuring the business organization’s success.
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Service quality is defined as a general assessment of service, with the customers providing the assessment (Eshghi, et al., 2008). Customer service can also be defined as the extent by which the customer’s expectations and needs are met by the services provided by the business organization (Asubonteng, et al., 1996). Service quality can also be defined as a gap or discrepancy between what the consumers perceive to be the quality of the services provided by the business organization and what the business organization’s perspective is of the quality of the same services provided (Parasuraman, et al., 1985). This definition enables the consumer to approximate if the service quality is high or low. The consumer judges the level of service quality based on the consumer’s perspective of what the service quality should be. In turn, the consumer’s perspective of the level of service quality depends on the consumer’s personal needs, the consumer’s past experiences, the consumer’s personal knowledge about the products or services offered by the business organization, and by the communicated information coming from the business organization (Parasuraman, et al., 1998).
However, it is worthy to note that there is a stark difference between the definition of service quality and the definition of customer satisfaction. Customer satisfaction pertains to the expectation of the consumer about what will happen when goods and services are purchased from the business organization. There is also a difference between service quality and the consumer’s perception of performance. Consumers define service performance as the perception of what the customer experiences (Parasuraman, et al., 1998).
There is a lot of value in understanding consumer expectations and experiences in a variety of contexts. There is a lot of interest to analyze these concepts in a critical industry such as the healthcare industry because of the importance of healthcare on the national economy, communities and to the actual recipients of healthcare services. There is a lot of value in determining the level of consumer expectations for healthcare services versus the perception of consumers on the ideal level of quality of healthcare services rendered. While service quality is mainly focused on meeting the needs and requirements of the customers, there is also a need to define service quality as the quality of the offered goods or services with respect to customer expectations. There is a lot of difficulty in achieving this, principally because service quality is intangible in nature and deals with expectations and perceptions, which are difficult to measure due to human behavior complexities.
Scholarly studies have identified the intangible components of service. These elements are inseparability, heterogeneity and perishability. These findings are supported by studies conducted by Douglas and Connor in 2003, by Parasuraman et al., in 1985, and by Ladhari in 2009. Furthermore, these studies showed that there is a need to define services in the terms provided by the customer so that the service provider will able to understand how the customer perceives quality.
The term service means many things as well. A service could mean an industry or a performance or an output. Service could also mean a process or offering (Johns, 1999). The definitions of service are based on the characteristics of services. The characteristics of services are intangibility, heterogeneity, perishability and inseparability. Intangibility is defined as the absence of a physical product. Without a physical product, there is nothing to be felt, tasted, smelled or even heard. There is not a lot of information prior the any purchase and this is a very difficult situation for the consumer since the absence of information makes understanding the nature of the product difficult to comprehend. A good example of intangible products is mobile phone services. There is a difficulty in determining how good the mobile telephone service is prior to the actual purchase of the product. Thus, it is very difficult for the consumer to evaluate service quality on the basis of the intangibility of the purchased product. For the service provider, this means that the level of intangibility must be determined to understand the customer’s perspective. In addition, the service provider must try and include any tangible elements that would enable the customer to understand the quality of the service provided.
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Heterogeneity is defined as the difference between the qualities of the delivered service as it is influenced by the human behavior differences. For example, a sales person may offer some kind of sales assistance to any customer who walks in the door. However, that particular sales person will not be able to provide the same level of service of everyone since there will be differences in the behavior of the customer the sales person is dealing with. Using this example as reference, it is very difficult to determine the quality of the service level that is provided by service providers to different customers.
Perishability is defined as the characteristic of products or services to be stored. Services are produced and consumed simultaneously therefore; services cannot be stored or saved. There are some exceptions to the perishability of services. For example, the use of a hotel room will not allow another potential user to use the same hotel room. The service of using the product (in this case the hotel room) exhibits a form of perishability.
Inseparability is defined as the time the service is consumed relative to the time the service is purchased. As mentioned above, services are typically produced and consumed at the same time. An example of the characteristic of inseparability is the use of the telephone call and the charges levied on the user while the telephone call is made. The customer is involved in the entire process of service delivery and is, therefore, involved.
The elements of service that are mentioned above, namely intangibility, heterogeneity, perishability and inseparability make measurement of services very difficult. Unlike other products that can be analyzed using quantitative measures, services do not have an easily quantifiable nature (Parasuraman, et al., 1998).
A model for measuring service quality was first developed by Gronoos in 1982. In his service quality model, Gronroos identified three components of service quality. The first of the three components is the technical aspect of quality. Technical quality deals with the delivered outcome of the service. The second of the three components is the functional quality of the service. The functional quality deals with the processes by which the services are delivered. The last of the three components is the image quality of the service. Image quality can be defined as the image that the business organization desires to portray based on the technical quality component and functional quality component of the provided service.
In this model, the technical quality component of the service delivered is easy to assess. The technical quality component deals with tangible aspects such as the physical features that the customer sees before purchasing the service. The physical aspects are also termed as “servicescape”. Servicescape can be defined as the physical facilities of the service provider. For example, a warm, secure and professional feel is what banks aspire to have to ensure their clients that their money will be well taken care of. The bank’s physical appearance is designed to emulate these feelings. In addition, the servicescape aspect relates to the SERVQUAL model, which is a model for measuring services as well.
The aspect of servicescape influences the evaluation of customers because of the additional inputs it provides to augment their original perspectives. These factors include empathy, reliability, responsiveness and assurances (Reimer & Kuehn, 2005). Servicescape is also related to service setting. According to a study conducted by William and Dargel in 2004, servicescape helps in service setting because it relate to the elements of services mentioned in the preceding section (intangibility, heterogeneity, perishability and inseparability). Simply put, servicescape affects the perception of quality, which helps in determining if the customers are happy or unhappy about the provided service.
Academicians and management experts understand the relevance of service quality to service oriented business organizations. As a matter of fact, there are many models that were developed by these academicians and management experts to measure service quality despite the difficulty it presents due to the intangibility of services (Eshghi, et al., 2008). Most of the models that are developed to assess the quality of services are undertaken through the interaction of the person that is delivering the service. This approach addresses the difficulty of evaluating customer’s perception about quality due to the intangible nature of services (Magi & Julander, 1996). Also, this approach enables the service provider to understand and identify other needs or requirements of the customer as the service is delivered.
Quality is important because it provides the business organization growth. However, the gains coming from an improvement in quality only come because the customer is satisfied with the service provided. Thus, it is important that an overall perspective of service quality is achieved and understood to ensure that the perceptions of the customer reveal their purchasing behavior. An overall understanding of service quality will also provide the business organization the ability to see the gaps in their services and then take the necessary actions to address these shortages and improve their product offerings. An overall perception of service quality is important because organizations can then install the necessary systems that address quality and customer and satisfaction.
Service quality is also very important to practitioners. According to a study conducted by Douglas and Connor in 2003, superior service quality and customer satisfaction drives survival and growth in a competitive landscape. If business organizations can provide good services, it would enable them to attract new customers, retain existing customers and even expand their product offerings. By achieving these things, the business organization will generate more revenues, increase its profitability, improve its corporate image, and achieve growth (Negi, 2009).
One of the earliest models of service quality was developed by Parasuraman in 1985. This service quality model was developed after an examination of the attitudes of customers that patronize the banking, credit card services, long-distance telephone services and repair and maintenance industries. The name of the model is SERVQUAL. SERVQUAL measures the difference between the expectation of the service level from a customer’s perspective and the customer’s perception of the actual level of service received. The quality of the service is determined by analyzing the gap between the two perspectives. If the service is good, then there is very little or no gap between the expected level of service provided and the actual level of service received. If the service is wanting, then the gap between the two perspectives is significant.
The approach to measuring service quality can be through a measurement of the attitudes to services provided or through a disconfirmation approach. Service quality is measured because it provides a comparison between the level of quality before and after changes is made. Changes to the quality of services are made when problems are identified and a solution is implemented by management.
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Cronin and Taylor developed the SERVPERF model was developed in 1992 to measure the changes in the level of service quality. In the model developed by Cronin and Taylor, a performance approach method measures how the customers feel about a particular service. The model ultimately measures the how the customers perceive the quality of the service provided. However, the model that not provide any indication on how the customers want to receive the services. Therefore, this model is incomplete in that it cannot tell the business organization what areas need improvements and how improvements could be made.
Teas developed the Evaluated Performance model in 1993. The Evaluated Performance model measures the difference between the customer’s perceived performance of the company in providing the service and an ideal level of service quality. The Evaluated Performance model does not include the expected level of service of the customers; rather, it focuses on a level of service that is believed to be the ultimate level of customer service.
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