Today’s consumer has become increasingly demanding. They not only want high quality products but they also expect high quality customer service. Even manufactured products such as cars, mobile phones and computers cannot gain a strategic competitive advantage through the physical products alone. From a consumer’s point of view, customer service is considered very much part of the product.
Delivering superior value to the customer is an ongoing concern of Product Managers. This not only includes the actual physical product but customer service as well. Products that do not offer good quality customer service that meets the expectations of consumers are difficult to sustain in a competitive market.
SERVQUAL (service quality gap model) is a gap method in service quality measurement, a tool that can be used by Product Manager across all industries. The aim of this model is to:
- Identify the gaps between customer expectation and the actual services provided at different stages of service delivery
- Close the gap and improve the customer service
This model developed by Parasuraman, Zeithalm and Berry in 1985 identifies five different gaps:
The Customer Gap: The Gap between Customer Expectations and Customer Perceptions
The customer gap is the difference between customer expectations and customer perceptions. Customer expectation is what the customer expects according to available resources and is influenced by cultural background, family lifestyle, personality, demographics, advertising, experience with similar products and information available online. Customer perception is totally subjective and is based on the customer’s interaction with the product or service. Perception is derived from the customer’s satisfaction of the specific product or service and the quality of service delivery. The customer gap is the most important gap and in an ideal world the customer’s expectation would be almost identical to the customer’s perception.
In a customer orientated strategy, delivering a quality service for a specific product should be based on a clear understanding of the target market. Understanding customer needs and knowing customer expectations could be the best way to close the gap.
The Knowledge Gap: The Gap between Consumer Expectation and Management Perception
The knowledge gap is the difference between the customer’s expectations of the service provided and the company’s provision of the service. In this case, managers are not aware or have not correctly interpreted the customer’s expectation in relation to the company’s services or products. If a knowledge gap exists, it may mean companies are trying to meet wrong or non-existing consumer needs. In a customer-orientated business, it is important to have a clear understanding of the consumer’s need for service. To close the gap between the consumer’s expectations for service and management’s perception of service delivery will require comprehensive market research.
The Policy Gap: The Gap between Management Perception and Service Quality Specification
According to Kasper et al, this gap reflects management’s incorrect translation of the service policy into rules and guidelines for employees. Some companies experience difficulties translating consumer expectation into specific service quality delivery. This can include poor service design, failure to maintain and continually update their provision of good customer service or simply a lack of standardisation. This gap may see consumers seek a similar product with better service elsewhere.
The Delivery Gap: The Gap between Service Quality Specification and Service Delivery
This gap exposes the weakness in employee performance. Organisations with a Delivery Gap may specify the service required to support consumers but have subsequently failed to train their employees, put good processes and guidelines in action. As a result, employees are ill equipped to manage consumer’s needs. Some of the problems experienced if there is a delivery gap are:
- Employees lack of product knowledge and have difficulty managing customer questions and issues
- Organisations have poor human resource policies
- Lack of cohesive teams and the inability to deliver
The Communication Gap: The Gap between Service Delivery and External Communications
In some cases, promises made by companies through advertising media and communication raise customer expectations. When over-promising in advertising does not match the actual service delivery, it creates a communication gap. Consumers are disappointed because the promised service does not match the expected service and consequently may seek alternative product sources.
Case Study: Amazon.com
Amazon.com provides books, movies, music and games along with electronics, toys, apparel, sports, tools, groceries and general home and garden items. Amazon is a good example of an online business that tries to close the service gaps in order to thoroughly meet consumer expectations.
Understanding Customer Needs
From the time the consumer starts to shop at Amazon’s online store, Amazon will attempt to understand their expectations. From when a customer first makes a product selection Amazon creates a consumer profile and attempts to offer alternative goods and services that may delight the consumer. The longer the consumer shops at Amazon, the more the company attempts to identify their preferences and needs.
Customer Defined Standards
When a consumer buys a product from Amazon they selects the mode of delivery and the company tells them the expected number of days it will take to receive their merchandise.
For example: standard shipping is three to five days but shipping in one or two days is also available. The company has set standards for how quickly customers are informed when a product is unavailable (immediately), how quickly customers are notified whether an out of print book can be located (three weeks), how long customers are able to return items (30 days) and whether they pay return shipping costs.
These standards exist for many activities at Amazon from delivery to communication to service recovery.
Apart from defining their service delivery, Amazon goes one step further and delivers on its promises. Amazon performs! Orders often arrive ahead of the promised dates; orders are accurate and are in excellent condition because of careful shipping practice.
Customers can track packages and review previous orders at any time. Amazon also makes sure that all its partners who sell used and new books and other related items meet Amazon’s high standards. The company verifies the performance of each purchase by surveying the customer and posting scores that are visible to other customers.
Managing promises is handled by clear and careful communication on the website. Every page is very easy to understand and to navigate.
For example the page dealing with returns eliminates customer misunderstanding by clearly spelling out what can be returned. The page describes how to repack items and when refunds are given. The customer account page shows all previous purchases and exactly where every ordered item is in the shipping process
Amazon strategy has been well received by its customers and the Amazon brand is known worldwide.
Effective product management is a complex undertaking which includes many different strategies, skills and tasks. Product managers plan for creating the best products and operational excellence to maximize customer satisfaction, loyalty and retention. Recognising and closing gaps offers high quality customer service to the consumer and helps them to achieve their goal whilst maximising market position, market share and financial results through customer satisfaction. It also helps managers to identify areas of weakness and make improvements to a company’s service delivery.
Check out our blog post on “The Value Curve: visualising the value proposition”. This tool allows product managers to take information gleaned from gap analysis to develop or refine products that are both compelling to customers and distinct from competitors.