Making sense of Service Quality (BPO ?Industry case study)

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I love my Sony Bravia 4K…it’s a quantum leap from all traditional TVs, it has 8 million pixels, Triluminous display, fluidic front speakers, it has this…. that…. and much more…!

Above, do I sound like one happy loyal customer and promoter of Sony ? Or is that an over-statement ?

In my view the above is surely not brand loyalty but an example of product loyalty. Two are fundamentally different. Brand loyalty often comes only post multiple breakthrough products, for example Apple. Because I like my TV so much, does not mean I will use a Sony phone, I continue?to prefer Samsung’s Note. The point is, a high ‘product quality’ fails to connect the entire brand with a customer as an individual but?‘Service Quality’ does exactly that, it touches lives. The differentiating factor is ‘Customer experience’, the latter has it, the former doesn’t. For all my financial (Banking, Insurance, Investments, Wealth management products) needs, I reach out to HDFC for example, probably because one banking service advisor 10 years back did something extra ordinary to help me!

Hope that gives us a sense around Service Quality….lets move right into it now.

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As we all appreciate, in order to produce a quality output (a product or a service) we need a quality?process and quality input(s). This assumption works across industries, manufacturing to service , but there a fundamental difference between the two when it comes to Quality. In product world, its only output that matters to the customer, but in our service (and BPO) world, majority of the time, input->Process->output all matter. You don’t agree ?

Trust me, even inputs come from customers often and is a significant variable in the eventual service quality. So what matters to service customers is the end to end experience and not only the service the customer asked for. But inputs to produce a TV are never variable though for us (in service) customers are integral part of the service delivery/provisioning process. .….does that sound complex ?... cant help it really, it is indeed a mystery…a lot still to be discussed, debated, explored and learnt on Service Quality…that’s probably what drove me to pen down this blog.

Alright lets get down to some real life layman examples, shall we:

1. Indian Railways : reaching the destination on time is the actual service that we pay for but is that all matter to us, surely not! End to end travel experience including the comfort, cleanliness, behavior of the crew and so on… are equally or sometime more important than just the timeliness. Now which input is variable here ? Well every customer onboard brings fresh inputs. Lets note here, that?customer requirements are not the only input to service quality but everything associated with the customer, his/her age, background, state of mind even communication skills. For you may be its ok to reach few hours late but comfort may not be compromised.

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• Claims processing BPO unit : The ‘real’ service is only timely credit of the correct bank account of the right recipient. Ha! That sounds plain and simple, but we all know there is a whole world of complexity in there! Majority of the inputs we spoke about come from the customer in this case, for example : what did we ask for ? when did we ask ? how did we ask ? how many time did we ask ? – all will matter to the eventual service quality of claim payments.

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• Packers & Movers: ?Objective is to pack and move my furniture to the new place safe & sound. But the experience counts more than the outcome I am sure. The heart attacks (near breaks), arguments, hygiene, courtesy etc etc. For example, if I cant speak fluent Hindi, I would need English speaking packers in my drawing room surely! ?

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• Emergency care unit in a Hospital: Well, I like this one the most! I wont put words to this example, would leave it for your imagination. I believe this last example is the most fitting one to introduce the dynamics of Service Quality.

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I did speak about touching lives, the softer aspects dominate more than the actual service. These countless number of ‘experience’ variables in the service world make the definition and measurement of service quality extremely challenging and vulnerable. Numerous research work hence have been made till date to tackle this challenge.

Going by (not completely) the most widely accepted theory (SERVQUAL, 1991) and adding further thoughts to it, overall service quality could be defined as a gap between two intangible terms that are very difficult to quantify or measure :

Service Quality =?Customer Perception (P) - Customer Expectation (E)?

Customer Expectation is a complex combination of : Marketing promos, direct promises made, implicit & explicit customer requirements, competition performance/benchmarks, market feedbacks, word of mouth, available sentiments etc.

Customer Perception is a complex combination of : Actual service delivered, actual customer experience, communication to customer etc.

The sub terms above clearly explain why we have this gap at the first place. Since it’s a favorable gap, performance needs to atleast meet or exceed expectations, hence more of it is good. In fact desired SQ is on the positive side. Ideally?SQ should be >=0.

But if we see, other than the three bold terms, majority of the contributors are outside the control/influence boundaries of the service provider. Hence mo marks for the obvious but million dollar question, that is “How do we minimize the SQ gap and achieve service excellence?”. In order to answer this question we have to know two things in greater details:

1. Identify more tangible / measurable components of service quality and measure SQ for each component through customer surveys.
2. Split the overall SQ gap into manageable stages and manage each stage to a minimum through strong organizational leadership and culture.

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• Five components of Service Quality - RATER :

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R: Reliability – Ability to perform the promised service dependably & accurately.

A: Assurance – Knowledge & courtesy of employees and their ability to convey trust and confidence.

T: Tangibles – Appearance of physical facilities, equipment, personnel & communication material/channels.

E: Empathy – Caring & Individual attention provided to customers.

R: Responsiveness – Willingness to help customer and provide prompt/speedy service.

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More often than not, we focus on reliability alone, which is directly related to service output, the remaining four above are associated with either inputs or the service process itself. Again referring back to product world, would you ever want to know how smart and confident Sony employees looked when you bought your Sony TV? ? I bet you didn’t!

We could design simple customer surveys to receive expectations & perceptions?scores on each of the five components from our existing customers.

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• SQ gap split :

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Overall Service Quality Gap => GAP 5 = GAP 1 + GAP 2 + GAP 3 + GAP 4.

SERVQUAL MODEL IMAGE :?

https://serviceperformance.com/wp-content/uploads/ServQual.gif

The SQ GAP

Definition

Why does it exist ?

GAP1

Gap between management perception of customer expectations/requirement

-Lack of/outdated market benchmarks

-Infrequent customer surveys

-Lack of belief in org capabilities

-Over confident mngt team

GAP2

Gap between the mngt perception and documented procedures/policies.

-Lack of service design/specification skills & tools

-Lack of customer centric thought process

-Lack of end to end view of the process

-Majority of implicit requirements (RATER) do not get specified

GAP3

Gap between documented and actual executed processes.

-Over dependence on people than process

-Weak staff performance management & adherence control

-Heavy exposure to human error

-Lack of technology enablement & complex processing interface/systems/platforms

-Lack of online/live access to quality policies & procedures/BPMs

-Outdated documented procedures

GAP4

Gap between actual service delivered & customer experience/perception.

-Lack of customer experience centric process measures/KPIs.

-Lack of communication between customer facing teams & operation/delivery teams

-Different objectives and priorities for marketing and operation teams

-Customer service staffs are not trained on Service Quality –RATER.

GAP5

Gap between Customer expectation and customer perception

-Combined effect of GAP1 to GAP4.

-Marketing promos are unreal, sets impractical/irrational customer expectations

-Too many implicit customer requirements that do not get specified at all

-Competition performance sets untold expectation

-Perception set from feedbacks /comments/ complaints/litigations accessible to public on internet/facebook/twitter/media etc.

-Anti branding, anti promotions/corporate competitions sets complex customer expectations and perceptions.

Lets take the example of a death claim processing transaction performed for a Life & Pension customer by our Mumbai colleagues and lets examine the role of each RATER component on each of the Service Quality gap. I am sure this is something we all can easily relate to.

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Customer Expectation

Management perception/priorities

Documented policies & procedures

Actual Service Delivered

Customer Perception/Experience

-Empathy

-Trust

-Personalized service

-Quick payment

-Hassle free process

-Compliance to regulation

-AML checks

-Back office SLA 5 days

-Ordinary college graduates can handle a death claim

-Only basic analytical skill required

-Standard mandatory document pack

-BPM only contains the steps/checks need to be performed on the system, no mention of customer experience aspects

-The BPM is 4 year old.

-The BPM is 200 pages long in Microsoft word document

-Customer had to call thrice

-Customer was called back 3 times for additional documents/missing information.

-First customer contact executive promised payment in a week

-Back office picked up the case on 5th day due to backlog/high volume.

-Claim payment made to the trustee in 15 days.

-Inflexible/rigid processes/no customized solution

-Difficult/rude & too many verbal communications with a deceased family member

-Wife did not receive the claim money through initially promised.

-Loan for funeral expenses

-Took 45 days to repay the loan (through trustee)

-Social humiliation/ trauma of the family members/spouse.

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Let me conclude re-emphasizing the heart of Service Quality, that is RATER, we must focus on all five aspects every single time we serve our customers. Once that gets to our habit, we should continuously try to minimize the five SQ GAPs through effective engagement between Leadership, Customers, staffs and market stakeholders. When your company’s?Service Quality GAP score stays at zero or more consistently for few years, we would have surely achieved holistic Service Excellence! Let us all work hard to achieve that!