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Measuring Quality in a Service Industry

Measuring Quality in a Service Industry

Quality is measured quantitatively. In manufactured goods, everything is spec'd out by plan and processes must create the components to spec within given tolerances. The final product must do what it is designed to do. Service industries are somewhat different, there is no product and no quantitative specifications. What are some ways that service businesses measure quality? Provide some examples and also discuss this in more general conceptual terms as well.

What is your opinion on John's answer to the question on (Measuring Quality in a Service Industry)?

John's answer:

The quality of services is extremely difficult to assess, because services is/are intangible. Quality of Service is conceived by the customer.

Quality = Customer satisfaction = Value/Cost

This definition of quality implies a close relationship between the service and the consumers. The potential financial benefits of an increased number of satisfied customers are often quite substantial. The greater the satisfaction of the customer with the company, that more he/she is willing to pay again for the same service. They will pass positive feedback along to others, who may then try the service for themselves and in their turn become repeat customers.

However, these benefits are not immediately apparent, and the company needs to be able to evaluate the customer for indicators for measurement. In the evaluation, the following indicators should be measured:

- Overall satisfaction with service
- Satisfaction with the parameters of the service (i.e., price, reliability, timeliness, friendly attitude, etc.)
- Evaluate the overall satisfaction of customers
- Identify "narrow" points of a service (i.e., aspects that do not evoke enough satisfaction)

In contrast, the consequences of consumer dissatisfaction may be felt much faster and can be very severe. One diaappointed customer will talk about the problems he/she has encountered with another 35 potential clients, on an average, and this secondary effect can impact future sales.

A good example is when Lexus first intoduce their ES 350 sedans. The company learned that there were three minor technical problems with the car. Over 300 Lexus officials organized into small groups and traveled to all parts of the country. They visited the affected customers at home, brought them a gift, apologized for the glitches in person, and, of course, brought along a technician who fixed the problems on the spot; In their drivewyas.

This just one example of the efforts Lexus has gone to maintain the highest level of customer satisfaction. Lexus has topped J. D. Power's Customer Service Survey for the past 4 years.

Solution Preview

Overall I agree with John's answer in regards to measuring quality in a service industry. It is important to note, in evaluating John's equation Quality = Customer Satisfaction = Value/Costs that a company must also considered the cost involved in providing quality customer satisfaction. For instance, in the example of Lexus, sending out 300 Lexus officials with gifts and technicians seems like absolute quality service. However, can you imagine the costs involved? Travel, time involved, employee costs. ...

Solution Summary

This solution reflects on a post in answer in regards to measuring quality in a service industry. It includes examples.