Service Quality Model for

Banking Industry

Made By:
Shubhangna Tandon
18435
What is Service Quality?
• Service quality is an approach to manage business processes in order
to ensure full satisfaction of the customers & quality in service
provided. It works as an antecedent of customer satisfaction.
Dimensions of Service Quality Model
• Reliability: Perform promised service dependably and accurately
Example: receive mail at same time each day.
• Responsiveness: Willingness to help customers promptly Example:
avoid keeping customers waiting for no apparentreason
• Assurance: Ability to convey trust and confidence Example: being
polite and showing respect for customer
• Empathy: Ability to be approachable Example: being a good listener
• Tangibles: Physical facilities and facilitating goods Example:
cleanliness
5 GAPS of organization to be managed
• Gap 1 is the distance between what customers expect and what managers think they expect -
Clearly survey research is a key way to narrow this gap.
• Gap 2 is between management perception and the actual specification of the customer
experience - Managers need to make sure the organization is defining the level of service they
believe is needed.
• Gap 3 is from the experience specification to the delivery of the experience - Managers need to
audit the customer experience that their organization currently delivers in order to make sure it
lives up to the spec.
• Gap 4 is the gap between the delivery of the customer experience and what is communicated to
customers - All too often organizations exaggerate what will be provided to customers, or discuss
the best case rather than the likely case, raising customer expectations and harming customer
perceptions.
• Finally, Gap 5 is the gap between a customer's perception of the experience and the customer's
expectation of the service - Customers' expectations have been shaped by word of mouth, their
personal needs and their own past experiences. Routine transactional surveys after delivering the
customer experience are important for an organization to measure customer perceptions of
service.
Model suitable for Banking and service
Sectors
Prescriptions for closing Service Gaps
• Knowledge: Learn what customers expect--conduct research,
dialogue, feedback
• Standards: Specify SQ standards that reflect expectations• Delivery:
Ensure service performance matches specs-- consider roles of
employees, equipment, customers
• Internal communications: Ensure performance levels match
marketing promises
• Perceptions: Educate customers to see reality of service delivery
• Interpretation: Pretest communications to make sure message is clear
and unambiguous
Return on Quality Measurements
ROQ approach is based on four assumptions:
• Quality is an investment
• Quality efforts must be financially accountable
• It’s possible to spend too much on quality
• Not all quality expenditures are equally valid
• Implication: Quality improvement efforts may benefit from being
related to productivity improvement programs
Efficiency, Effectiveness, and Productivity
• Efficiency: comparison to a standard--usually time-based (e.g., how
long employee takes to perform specific task)
• Problem: focus on inputs rather than outcomes
• May ignore variations in quality or value of service
• Effectiveness: degree to which firm is meeting its goals
• Cannot divorce productivity from quality/customer satisfaction
• Productivity: financial valuation of outputs to inputs
• Consistent delivery of outcomes desired by customers should
command higher prices
Measuring Service Productivity
• Traditional measures of service output tend to ignore variations in quality
or value of service
• That is, they focus on outputs rather than outcomes, and stress efficiency
but not effectiveness.
• Firms that are more effective in consistently delivering outcomes desired
by customers can command higher prices. Furthermore, loyal customers are
more profitable
• Measures with customers as denominator include:
1. profitability by customer
2. capital employed per customer
3. shareholder equity per customer