Lecture 5: Service Research and Performance Metrics

Question 1

1. What are the challenges of Service Research?

Answer 1

• Services are dynamic
• Interaction is central to perceptions
• Context generates perception differences
• Customers may not be in a position to evaluate services
• Defining scope of service e.g., beginning and end

Question 2

What are the objective of Service Research?

Answer 2

Understand customer expectations

Identify and rate the importance of relevant attributes in service quality

Assess delivery performance

Monitor service outcomes e.g., repeat patronage behaviour and positive w-o-m or referral behaviour

Question 3

Who are the sources of information for Service Research?

Answer 3

Existing customers can be key source

Defectors or dormant/lapsed member

Prospectors within target market

Network partners i.e., suppliers, distributors, retailers, agents,
Contractors, Service personnel

Question 4

What are examples of Research Methods?

Answer 4

• Mystery shopping
• Complaint analysis
• Focus groups
• In-depth interviews
• Critical incidents
• Ethnography
• Customer panels
• Surveys

Question 5

What is mystery shopping and how does it work?

Answer 5

Definition: The process of an unknown individual acting as a shopper to observe and/or assess the service in action, and record experiences afterwards.

Allows managers to monitor the extent to which specified quality standards are actually being met by staff.

Question 6

Give an example of what a mystery shopper would be concerned with in a takeaway pizza shop.

Answer 6

Store condition

Waiting time to be served

Responsiveness(eye contact, greeting, grooming of service worker

Service worker knowledge of offering e.

Waiting time to receive order

Quality of offering and accuracy of order such as toppings/ crust)

Question 7

What is competitor service assessment and what is the role of it, please give examples of how and what for an airline company to assess its competitor’s service.

Answer 7

Definition: Compare the firm’s performance with that of its competitors.

Role: This is to benchmark the leaders and identify relevant trends

Example: Regular walks in competitive airline terminal. Take competitive airline flight to check out service levels of ground and cabin staff and in-flight catering.

Question 8

Why are customer complaints important and what are the challenges of complaint analysis?

Answer 8

Complaints by customers if treated constructively, provide a rich source of data on which to base policies for improving service quality.

However, most customers do not bother to complain (approx 90% of dissatisfied customers do not complain) No central register to capture multiple touch points for complaints, Monitoring complaint numbers, Collecting feedback both qualitatively and quantitatively.

Question 9

How do focus groups work and how does it compares with the sum of individual interviews?

Answer 9

Small group (6 to 12 participants) that are guided by a facilitator/moderator through an semi - structured, spontaneous discussion about a service.

The number of ideas, complaints or proposals a group puts forward is greater than the sum of individual interviews.

Question 10

What is in-depth interview and how does it compares to focus groups?

Answer 10

One -on -one interview which investigates the customer ’s personal feelings, perceptions and expectations concerning the service. Better than focus groups when studying sensitive topics such as drug use, cosmetic surgery, etc, but also more expensive.

Question 11

What is critical incidents and please describe some critical incident techniques.

Answer 11

Customers are asked to describe service events and experiences about which they are extremely satisfied or dissatisfied

The critical incidents Identifies common problems or sources of delight between customers.

An interviewer facilitates the construction of a written story It provides deep insights into service delivery

Powerful technique in getting customers to describe their requirements and their opinion of “best practices” at the transaction level As a result of conducting a critical incidents study, the researcher emerges with a list of desirable and undesirable employee behaviours in those service encounters

Question 12

What is Ethnography and why is it difficult to avoid bias?

Answer 12

Direct, unobtrusive observation of consumers in a naturalistic setting using the service of interest.

Uses many different forms of data collection e.g., pictures, videos, field notes, documents

As researcher is a participant in the research so it’s hard to remain objective and ensure their existence doesn’t change the behaviour of the people they are interviewing.

Question 13

How does customer panel work?

Answer 13

A group of selected customers is bought together on a regular basis to study their opinions and experiences with the service provision can be used to test service innovations. (long- term data, interview and refresh over time, every couple of years, can lose objectivity)

Question 14

Why doing employee research?

Answer 14

Data gathered from staff training seminars, quality circles, performance appraisals, suggestion schemes, focus groups and formal surveys can be used for improving service quality provision Involving employees in the research process and its findings can do much to improve their understanding of service quality issues throughout the firm

Particularly useful to determine: Perceptions of service quality delivered Barriers to improved service quality delivery Suggestions for service improvements

Question 15

What are the advantages of customer surveys?

Answer 15

Can be administered to large customer numbers relatively cheaply when compared with the other techniques. It can be used to measure Satisfaction, Service quality &Net promoter score

Question 16

How to design questionnaire?

Answer 16

????

Question 17

How to measure satisfaction? Two approach.

Answer 17

100 point approach (On a scale that ranges from 1 - 100, how satisfied are you with the service that you received today?) b. The very dissatisfied/ very satisfied approach (How satisfied are you with the service your received today? If less than satisfied, what could we have done better?)

Question 18

What are the factors impacting satisfaction ratings?

Answer 18

Genuine satisfaction (in most cases skewed)

Response bias(only the most satisfied customers do the survey unless providing incentives)

Data collection method(online can result a lower response rate)

Question format(e.g. How satisfied/ dissatisfied are you)

Question scope(a more specific question is easier to rate)

Question timing(do the survey straight- after the service can have better result)

Social desirability bias(e.g. Want to please interviewer)

Mood of respondent (ensure positive mood)

Question 19

At what point should we decide to improve satisfaction scores?

Answer 19

95% to 98% worth the investment?

Depends:
The satisfaction ratings of competitors (benchmark)
$ investment needed relative to impact on market share
Time to recoup investment
Opportunity cost of investment

Question 20

Define net promoter score.

Answer 20

How likely would you to recommend [this company, product or service] to a friend or colleague?

Scale 0 to 10

Promoters – Score 9 or 10

Passives – Score 7 or 8

Detractors – Score 0 to 6

NPS = %Promoters -%Detractors

Plus open-ended question to provide insights e.g. Why would you be likely or unlikely to recommend [this company, product or service] to a friend or colleague?

Question 21

What are the limitations of Net Promoter Score ?

Answer 21

Limitations: Assumes Promoters generate 80- 90% of referrals (netpromotersystem.com 2012) But Kumar et al. (2007) has shown that only a small percentage of customers who state they will refer the firm actually do

Question 22

Give examples of data analysis.

Answer 22

Percentage distribution of customers that were very satisfied to very dissatisfied
Service quality dimension importance

Use correlation analysis, or for multiple dimensions, multiple linear regression analysis