Top Management commitment – Service Quality

Companies such as Marriott, Disney, and USAA have a thorough commitment to service quality. Their managements look not only at financial performance on a monthly basis, but also at service performance. Ray Kroc of McDonald’s insisted on continue measuring each McDonald’s outlet on its conformance to SCV: quality, service, cleanliness, and value. Some companies insert a reminder along with employees’ paychecks: ‘BROUGHT TO YOU BY THE CUSTOMER’. Sam Walton of Wal-Mart required the following employee pledge: ‘I solemnly swear and declare that every customer that comes within 10 feet of me, I will smile, look them in the eye, and greet them, so help me Sam’.

High Standards: The best service providers set high service quality standards. Citibank aims to answer phone calls within 10 seconds and customer letters within 21 days. The standards must be set appropriately high. A 98 percent accuracy standard may sound good, but it would result in FedEx losing 64,000 packages a day; 6 misspelled words on each page of a book; 400,000 mis-filled prescriptions daily; and unsafe drinking water 8 days a year. One can distinguish between companies offering ‘merely good’ service and those offering ‘breakthrough’ service aimed at being 100 percent defect-free.

A service company can differentiate itself by designing a better and faster delivery system. There are three levels of differentiation. The first is reliability: Some suppliers are more reliable in their on-time delivery, order completeness, and order-cycle time. The second is resilience: Some suppliers are better at handling emergencies, product recalls, and answering inquiries. The third is innovativeness: Some suppliers create better information systems, introduce bar coding and mixed pallets, and in other ways help the customers.

Many distribution experts say that a company’s money would be better spent on improving delivery performance than on advertising. They say that superior service performance is a more effective differentiator than image expenditures. Furthermore, it is harder for a competitor to duplicate a superior distribution system than to copy an advertising campaign.

Dial- a – Mattress:

Napoleon Barragan started Dial-A Mattress in 1976; by 1999, it had generated $80 million in annual sales customers can call a toll free number (1-800-Mattress) 24 hours a day, seven day a week, talk to bedding consultant, have the right mattress delivered the same day and receive a 30 day customer satisfaction guarantee trial period. The company also sells mattresses via a successful Web site,, as well as in its own showrooms around the country.

Self Service Technologies (SSTS): As is case with products, consumers value convenience in services. Many person-to-person service interactions are being replaced by self services technologies. To the traditional vending machines we can add Automated Teller Machines (ATMs), self pumping at gas stations, self-checkout at hotels, self-ticket purchasing on the Internet, and self-customization of product the Internet.

Not all SSTs improve service quality, but they have the potential of making service transactions more accurate, convenient, and faster. Every company needs to think about improving its service sing SSTs. Companies would be smart to enable customers to call the company when they need more information than the SST provides. Online hotel reservation Web sites often include a “Call Me” button. If the customer clicks on it, a service rep will immediately phone the person to answer a question. Even banks miss an opportunity to use their ATMs. A customer might draw money from the ATM and see the message: “Call 1-800-123-4567 to earn more interest”; but the customer goes home and forgets to call. The ATMs message could have been: “You have $6,000 over the required balance”.

Imagine an auto insurance company wanting to improve its claim service and assistance. Normally a driver involved in an accident has to wait for a claims adjuster to show up, assess the damage, and offer a settlement. The insurance company’s Web site could include step-by-step guidelines telling the insured person what to do. It would list the kinds of documents needed by the police, and by the hospital; suggest the names of reliable medical and legal professionals; and list reputable car-rental firms and repair shops in the customer’s area. Claim forms would be filled out on the Web site. The claims adjuster, when he or she visits the driver, can use a handled mobile computing deice and digital camera to photograph the damage, send a streaming video back to headquarters, get approval, and print out a check for car repair on the spot.