Unit-5

Evaluating Success of Service Offering

Evaluating the success of a service offering in service marketing involves several

key steps and metrics.

1. Define Objectives and KPIs:

 Set Clear Goals: Identify what success looks like for the service offering.
This could include increasing market share, achieving customer satisfaction,
or boosting revenue.
 Key Performance Indicators (KPIs): Determine which metrics will best
measure progress toward your objectives. Common KPIs for services:
o Customer Satisfaction Scores (CSAT)
o Net Promoter Score (NPS)
o Customer Retention Rate
o Service Quality Ratings
o Revenue Growth
o Customer Acquisition Cost (CAC)
o Customer Lifetime Value (CLV)

2. Gather Data:

 Customer Feedback: Use surveys, interviews, and feedback forms to

understand customer experiences and satisfaction.
 Sales and Financial Metrics: Track revenue, profit margins, and other
financial indicators.
 Operational Metrics: Measure service delivery times, error rates, and other
operational aspects.

3. Analyze Performance:

 Compare Against Benchmarks: Assess how your service offering

compares to industry standards or competitors.
 Trend Analysis: Look at data over time to identify patterns, improvements,
or declines.
 Segmentation Analysis: Examine performance across different customer
segments to identify specific strengths or weaknesses.
4. Evaluate Customer Experience:

 Service Quality: Evaluate if the service meets or exceeds customer

expectations. Use frameworks like SERVQUAL to assess dimensions such
as reliability, assurance, tangibles, empathy, and responsiveness.
 Customer Journey Mapping: Analyze the entire customer experience from
initial contact through post-service interactions to pinpoint areas for
improvement.

5. Assess Operational Efficiency:

 Process Evaluation: Review the efficiency of service delivery processes.

Look for bottlenecks or areas where the service could be streamlined.
 Resource Utilization: Evaluate how well resources (e.g., staff, technology)
are being used to deliver the service.

6. Monitor Market Trends:

 Competitive Analysis: Stay informed about competitors’ offerings and

market changes that could impact your service’s success.
 Innovation and Adaptation: Evaluate how well your service adapts to
changing customer needs and industry trends.

7. Implement and Review Improvements:

 Action Plan: Based on the analysis, develop a plan to address any issues or
capitalize on strengths.
 Continuous Improvement: Establish a process for ongoing assessment and
enhancement of the service offering.

8. Communicate Results:

 Stakeholder Reporting: Share findings with key stakeholders, including

team members, management, and investors.
 Customer Communication: Keep customers informed about changes or
improvements based on their feedback.

9. Benchmarking and External Validation:

 Awards and Certifications: Seek external validation through industry

awards or certifications which can provide an additional measure of success.
Service Quality and Measurement

Service Quality is the measure of how well a service meets or exceeds customer
expectations. It encompasses dimensions such as reliability, assurance, tangibles,
empathy, and responsiveness. High service quality results from delivering
consistent, accurate, and timely services, while also ensuring a positive customer
experience through knowledgeable and courteous interactions.

Measuring Service quality is crucial for ensuring that customer expectations are
met and exceeded. Here are nine practical methods to assess service quality
effectively:

1. SERVQUAL

SERVQUAL is a widely-used tool for evaluating the subjective elements of

service quality. It involves surveying customers to rate their perceptions of service
delivery against their expectations. SERVQUAL assesses five key dimensions:

 Reliability: The ability to consistently deliver promised services accurately.

 Assurance: The competence, politeness, and trustworthiness of employees.
 Tangibles: The physical appearance of facilities, equipment, and personnel.
 Empathy: The extent to which employees provide individualized attention
and care.
 Responsiveness: The willingness and speed with which employees provide
service.

2. Mystery Shopping

Mystery shopping involves employing individuals to pose as customers and

evaluate service quality based on predefined criteria. This technique offers
valuable insights into the service experience from an unbiased perspective and can
reveal discrepancies between the service provided and expected standards.

3. Post-Service Rating

Post-service ratings involve requesting feedback immediately after the service has
been delivered. This can be done through various channels, such as live chat,
phone support, or email. The immediate feedback helps gauge customer
satisfaction and identify areas for improvement.

4. Follow-Up Survey

Follow-up surveys are conducted after some time has passed since the service
interaction, allowing customers to provide detailed and reflective feedback.
Surveys can be sent via email or other communication methods and offer a
comprehensive view of the customer’s overall service experience.

5. In-App Survey

In-app surveys are designed to collect feedback while the customer is interacting
with the app or website. These surveys can be brief and targeted, asking specific
questions to assess the customer’s experience in real-time, thus capturing
immediate impressions.

6. Customer Effort Score (CES)

The CES measures how easy it is for customers to resolve their issues or achieve
their goals with the service. This metric focuses on minimizing customer effort
rather than exceeding expectations, as reducing effort can significantly enhance the
overall customer experience.

7. Social Media Monitoring

Social media monitoring involves tracking and analyzing customer feedback and
mentions on platforms like Facebook, Twitter, and review sites such as
TripAdvisor and Yelp. This method provides real-time, unfiltered opinions and can
help identify trends and sentiments about your service.

8. Documentation Analysis

This qualitative method involves reviewing service records, such as emails, chat
logs, or phone call transcripts, to assess the quality of service interactions.
Analyzing these documents can reveal patterns and insights into service strengths
and weaknesses.

9. Objective Service Metrics

Objective metrics provide quantitative data to complement qualitative assessments.

Key metrics:

 Volume per Channel: Tracks the number of inquiries per channel to assess
demand and channel performance.
 First Response Time: Measures the time taken to provide an initial
response to a customer inquiry.
 Response Time: The average time between responses during an ongoing
interaction.
 First Contact Resolution Ratio: The proportion of issues resolved in a
single interaction.
  Replies per Ticket: The average number of replies needed to resolve a
ticket, indicating efficiency.
 Backlog Inflow/Outflow: Compares the number of new cases to resolved
cases to gauge workload.
 Customer Success Ratio: Measures the proportion of customers who
achieve their objectives.
 ‘Handovers’ per Issue: Tracks the number of service representatives
involved in resolving an issue.
 Things Gone Wrong: The frequency of complaints or service failures per
inquiry.
 Instant Service / Queueing Ratio: The ratio of customers served instantly
versus those who experience wait times.
 Average Queueing Waiting Time: Measures the average wait time for
customers in a queue.
 Queueing Hang-Ups: The number of customers who abandon the queueing
process.
 Problem Resolution Time: The average time taken to resolve an issue.
 Minutes Spent Per Call: Assesses the average duration of service calls to
evaluate efficiency.

Complaint Handling

Effective complaint handling in service management is crucial for maintaining

customer satisfaction and loyalty.

Rules of complaints handling for Organizations:

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Have a Strategic plan

Have a clear, flexible welcoming and open policy on complaints. A complaint is a

gift when a customer gives up their time to help you improve your organisation.

2. Train your Staff and Management in complaints handling

Give them confidence to tackle the difficult customers and support in their actions.
Excellent complaint handling isn’t easy and can sometimes be stressful and feel
unrewarding. Confirm its importance in providing great customer service.
 3. Give complaining enough priority and authority

Staff should be aware that complaints are a top priority item for your operation,
and anyone who deals with them must have sufficient authority to resolve them
completely.

4. Ensure that you can process complaints from all sources

There are 4 main ways to complain – in person, by telephone, by mail, by

email/internet. Your organisation must be able to handle all of these efficiently.

5. Set up processes to log and analyse all complaints and share with
everyone

You can learn a lot about problems with internal processes, training, specific
employees/managers, and product for free.

10 Processes and actions for setting up your Complaints Handling

1. Thank the customer for complaining

Say that you are sorry that the problem has happened. This is not an admission of
guilt and it does demonstrate respect for the customer.

2. Put yourself in the place of the customer

This will instantly give you an advantage, as you not only will have more empathy
with the customer, but also you know your business better than them and so can
hopefully see the solution quicker.

3. Start with the view that the customer has a valid point, not that he/she
are trying to rip you off

It is true that there are some professional complainers, but they are in the minority.
if you are a local store, you probably know them anyway. Accepting the customer
may well have a point can trigger ideas for an acceptable resolution.

4. Get all the facts first

Let the customer give you all of the information. This will help you fully
understand the situation and, if the customer is emotional, this will give them time
to calm down. Don’t offer the complainant a free gift straight away. It’s very
tempting to give the customer a gift, or vouchers. In many cases it is good service,
but too often it is done instead of solving the problem, which can lead to more
complaints about the same thing because it hasn’t been fixed.
 5. Correct the mistake

All of the other suggestions are pointless if you don’t fix the problem. Make sure
that your definition of the right fix is the same as the customer’s.

6. Learn from every complaint

Fix the process: Train staff in the issue and eliminate the fault. Wherever possible
let the complaining customer know that they have helped you resolve a problem.
They’ll come back again and again and will probably spread the word.

7. Minimize reasons for complaints

Do you have a continuous improvement culture? Do you check customer (and

employee) satisfaction regularly? Do you check the quality of the goods sold in
your organisation?It costs at least 5 times as much to gain a new customer than
keep an existing one, and takes 56 days on average. Keeping this complaining
customer should be the top priority, and at these cost ratios you can afford to be
generous in your time and effort.

8. Always respond

In person complainers hopefully always get dealt with, but make sure that
everyone who complains on the telephone, by letter, or by E-mail gets a rapid and
appropriate response.

9. Listen to your staff

They nearly always care about your company and doing a good job and are much
closer to the customers than you are. Ask their views regularly and make changes
when they are sensible. Make sure their complaints are handled too.

10. Lead by example

It’s not that your staff don’t listen to what you say, it’s that they do listen, so make
sure that you are always setting the right example, and giving complaints your
personal priority. Reward good complaints handling.
Service Guarantees, Characteristics, Types

Service Guarantees are formal promises made by a company to ensure customer

satisfaction with their services. They outline specific commitments, such as quality
standards, delivery times, or performance metrics, and often include remedies if
these commitments are not met. For example, a service guarantee might promise
that a product will be delivered on a certain date, or that a repair will be completed
within a set timeframe. If the company fails to uphold these promises, they might
offer compensation or corrective actions, such as refunds or additional services at
no extra cost. Service guarantees help build trust, enhance customer satisfaction,
and differentiate a business from competitors by showcasing its confidence in
delivering high-quality service.

Characteristics of Service Guarantees:

 Clarity:

A service guarantee should be clear and straightforward. It must specify what is

being guaranteed, including the exact service standards or outcomes promised.
This clarity helps customers understand what to expect and reduces ambiguity
about the company’s commitments.

 Credibility:

The guarantee must be credible and realistic. It should reflect what the company
can genuinely deliver without overstretching its capabilities. An overly ambitious
guarantee can undermine trust if the company fails to meet it.

 Specificity:

Effective service guarantees are specific about the parameters of the promise. For
instance, instead of a vague assurance of “excellent service,” a guarantee might
promise “24-hour customer support response time” or “a 30-day satisfaction
guarantee.”

 Compensation:

A key characteristic is the provision of compensation or remedies if the guarantee

is not met. This could be a refund, a free service, or any other form of
compensation that addresses the customer’s dissatisfaction. It reinforces the
company’s commitment to meeting its promises.
  Enforceability:

The guarantee must be enforceable, meaning customers should have a clear

process for claiming the compensation or remedy if the service does not meet the
guaranteed standards. This involves a straightforward procedure for making a
claim and receiving the promised resolution.

 Measurability:

The terms of the guarantee should be measurable. This means that the standards or
outcomes promised can be objectively evaluated. For example, guaranteeing a
“response time within 24 hours” is measurable and can be tracked effectively.

 Relevance:

The guarantee should be relevant to the customer’s needs and concerns. It should
address the aspects of service that are most important to the customer, thus
demonstrating that the company understands and prioritizes their specific needs.

 Visibility:

The guarantee must be visible and communicated effectively to customers. It

should be prominently featured in marketing materials, service contracts, and
customer communications. Ensuring that customers are aware of the guarantee
helps reinforce their confidence in the service.

Types of Service Guarantees:

 Money-Back Guarantee:

Promises a full refund if the customer is not satisfied with the service. This type of
guarantee reduces risk for the customer and builds trust in the quality of the
service.

 Satisfaction Guarantee:

Ensures that the customer will be satisfied with the service, often providing a
remedy such as a re-service or additional support if they are not. This type focuses
on customer contentment rather than financial compensation.

 Timeliness Guarantee:

Commits to delivering the service within a specified time frame. For example, a
repair service might guarantee that work will be completed within 24 hours. If the
deadline is missed, compensation or additional services may be offered.
  Quality Guarantee:

Assures customers that the service will meet specific quality standards. This type
of guarantee often involves clear criteria for evaluating quality, and if the service
does not meet these standards, corrective actions are taken.

 Performance Guarantee:

Guarantees that the service will achieve certain performance metrics or outcomes.
For instance, a consulting firm might guarantee improved business performance or
specific results, and if these outcomes are not achieved, they might offer additional
services or adjustments at no extra cost.

 Customer Service Guarantee:

Focuses on the level of customer service provided. It might promise timely

responses, polite interactions, or exceptional support. If these service levels are not
met, the company might offer compensation or an apology.

 Service Recovery Guarantee:

Provides assurance that any issues or service failures will be promptly addressed
and resolved. This guarantee is often used in industries where service recovery is
crucial, such as hospitality or customer support.

 Price Guarantee:

Ensures that customers receive the best price available or offers to match lower
prices found elsewhere. This type of guarantee is often used in retail or service
industries where pricing competitiveness is a key factor.

Role of CRM in Service

Customer Relationship Management (CRM) plays a pivotal role in enhancing

service quality and customer satisfaction.

 Centralized Customer Information:

CRM systems aggregate customer data into a unified database. This includes
contact details, service history, preferences, and previous interactions. Centralizing
this information allows service representatives to access relevant data quickly,
providing a more personalized and efficient service.
  Improved Customer Interaction:

With detailed customer profiles and history at their fingertips, service agents can
tailor their interactions based on individual customer needs and past behavior. This
personalization helps build stronger relationships and addresses customer concerns
more effectively.

 Efficient Issue Tracking and Resolution:

CRM systems often include tools for tracking service requests, complaints, and
resolutions. This ensures that issues are monitored from initiation to resolution,
improving response times and ensuring that no customer request falls through the
cracks.

 Automated Workflows:

CRM can automate routine tasks such as follow-ups, reminders, and notifications.
Automated workflows help streamline service processes, reduce manual errors, and
ensure timely responses, enhancing overall service efficiency.

 Analytics and Reporting:

CRM systems provide valuable insights through analytics and reporting tools. By
analyzing service metrics, customer feedback, and trends, businesses can identify
areas for improvement, measure performance, and make data-driven decisions to
enhance service quality.

 Enhanced Communication Channels:

Many CRM systems integrate with various communication channels like email,
chat, social media, and phone. This integration allows for seamless communication
and ensures that all customer interactions are tracked and managed in one place.

 Customer Segmentation:

CRM enables segmentation of customers based on various criteria such as

behavior, preferences, or demographics. This segmentation allows businesses to
tailor their service approaches and marketing efforts to specific customer groups,
improving relevance and effectiveness.

 Proactive Service:

By analyzing historical data and customer patterns, CRM systems can help
businesses anticipate customer needs and issues before they arise. This proactive
approach enables businesses to address potential problems early and offer solutions
or support before customers even ask.

 Customer Feedback Management:

CRM systems often include tools for collecting and managing customer feedback.
This feedback can be used to gauge service satisfaction, identify improvement
areas, and adapt strategies to better meet customer expectations.

The Gaps Model Of Service Quality

SERVQUAL Model (also called Gaps model) is an empiric model by Zeithaml,

Parasuraman and Berry to compare service quality performance with customer
service quality needs. It is used to do a gap analysis of an organization’s service
quality performance against the service quality needs of its customers. That’s why
it’s also called the GAP model.

It takes into account the perceptions of customers of the relative importance of

service attributes. This allows an organization to prioritize.

There are five core components of service quality:

  Tangibles: physical facilities, equipment, staff appearance, etc.
 Reliability: ability to perform service dependably and accurately.
 Responsiveness: willingness to help and respond to customer need.
 Assurance: ability of staff to inspire confidence and trust.
 Empathy: the extent to which caring individualized service is given.

The four themes that were identified by the SERVQUAL developers were
numbered and labelled as:

1. Consumer expectation – Management perception gap (Gap 1)

Management may have inaccurate perceptions of what consumers (actually)

expect. The reason for this gap is lack of proper market/customer focus. The
presence of a marketing department does not automatically guarantee market
focus. It requires the appropriate management processes, market analysis tools and
attitude.

2. Service Quality Specification gap (Gap 2)

There may be an inability on the part of the management to translate customer

expectations into service quality specifications. This gap relates to aspects of
service design.

3. Service delivery gap (Gap 3)

Guidelines for service delivery do not guarantee high-quality service delivery or

performance. There are several reasons for this. These include: lack of sufficient
support for the frontline staff, process problems, or frontline/contact staff
performance variability.

4. External communication gap (Gap 4)

Consumer expectations are fashioned by the external communications of an

organization. A realistic expectation will normally promote a more positive
perception of service quality. A service organization must ensure that its marketing
and promotion material accurately describes the service offering and the way it is
delivered

5. These four gaps cause a fifth gap (Gap 5)

which is the difference between customer expectations and perceptions of the

service actually received Perceived quality of service depends on the size and
direction of Gap 5, which in turn depends on the nature of the gaps associated with
marketing, design and delivery of services. So,Gap 5 is the product of gaps 1, 2, 3
and 4. If these four gaps, all of which are located below the line that separates the
customer from the company, are closed then gap 5 will close.

Uses of Gaps Model of Service Quality:

 Identifying Service Quality Gaps:

The model helps organizations pinpoint gaps between customer expectations and
perceptions at various stages of service delivery. These gaps include the
Knowledge Gap (difference between customer expectations and management’s
understanding), the Policy Gap (difference between management’s understanding
and service specifications), the Delivery Gap (difference between service
specifications and actual service delivery), the Communication Gap (difference
between service delivery and external communications), and the Perception Gap
(difference between customer perceptions and expected service).

 Improving Customer Understanding:

By addressing the Knowledge Gap, businesses can enhance their understanding of

customer needs and expectations. This involves gathering and analyzing customer
feedback, market research, and other data to better align services with customer
demands.

 Aligning Service Specifications with Delivery:

The Policy Gap helps organizations align service specifications with actual
delivery. By refining service standards and ensuring they are feasible and clearly
communicated, businesses can reduce discrepancies between what is promised and
what is delivered.

 Enhancing Service Training and Execution:

Addressing the Delivery Gap involves improving staff training and operational
processes. This ensures that employees are well-equipped to deliver services that
meet or exceed customer expectations, thereby reducing performance
inconsistencies.

 Optimizing Communication Strategies:

The Communication Gap highlights the need for consistency between marketing
messages and actual service delivery. By aligning communication strategies with
real service capabilities, businesses can manage customer expectations more
effectively and avoid misunderstandings.
  Monitoring Service Performance:

The model provides a framework for continuous monitoring and assessment of

service quality. Regular evaluations of each gap can help organizations identify
and rectify issues promptly, ensuring ongoing service improvement.

 Enhancing Customer Satisfaction and Loyalty:

By systematically addressing each gap, businesses can improve overall service

quality. This leads to higher customer satisfaction, stronger loyalty, and a better
competitive position in the market.

Latest issues in Service Marketing with reference to Uber, Ola, OYO, Swiggy,
Zomato

Service marketing issues in contemporary companies like Uber, Ola, OYO,

Swiggy, and Zomato highlight the evolving challenges in the industry.

Uber and Ola:

 Regulatory Challenges:

Both Uber and Ola face ongoing regulatory hurdles in various markets. Issues
include compliance with local transportation laws, fare regulations, and driver
licensing requirements. These regulatory challenges can impact operations and
service delivery.

 Safety and Security:

Ensuring the safety of passengers and drivers is a significant concern. Incidents of

crime or harassment involving drivers or passengers can damage the company’s
reputation and require robust safety measures and response protocols.

 Driver-Partner Relations:

Disputes over fair compensation and working conditions for drivers are prevalent.
Drivers often demand better pay, benefits, and support, leading to strikes or
protests that disrupt service availability.
OYO:

 Quality Control:

OYO has struggled with maintaining consistent service quality across its vast
network of partner hotels. Issues such as substandard room conditions, mismatched
expectations, and unreliable amenities can affect customer satisfaction.

 Contractual Disputes:

Disputes with hotel partners over contract terms, revenue sharing, and operational
standards have been common. These disputes can lead to conflicts that affect
service consistency and availability.

Swiggy and Zomato:

 Delivery Timeliness:

Both Swiggy and Zomato face challenges with timely delivery. Delays can result
from logistical issues, high demand, or operational inefficiencies, leading to
customer dissatisfaction.

 Service Quality and Accuracy:

Ensuring that food orders are accurate and meet quality standards is critical.
Mistakes in orders, food quality issues, or poor handling can negatively impact the
customer experience.

 Competition and Market Saturation:

Intense competition and market saturation in the food delivery industry create
pressure to maintain competitive pricing, innovative offerings, and excellent
service while managing operational costs.

Common Challenges:

 Data Privacy and Security:

All these companies handle sensitive customer data, including payment

information and personal details. Ensuring data privacy and protecting against
breaches is crucial to maintaining customer trust and compliance with regulations.
  Customer Service and Support:

Effective customer support is essential for resolving issues quickly and

maintaining satisfaction. All these companies face challenges in providing
responsive and efficient customer service to handle complaints, queries, and issues
effectively.