Ten Lessons for Improving Service Quality
Leonard Berry, A. Parasuraman, and Valarie Zeithaml, 2003 [03-104]
Between 1983 and 1993, Berry, Parasuraman, and Zeithaml conducted a comprehensive, five-phase study of service quality in America under the sponsorship of the Marketing Science Institute. They have published a series of MSI monographs, journal articles, and several books based on this research. They reflected on their research journey in an MSI commentary that was published in 1993 and republished in 1994 by the Academy of Management Executive, and is now reprinted here. In the preface below they re-visit their reflections of ten years ago.
Preface
Quality service helps a company to maximize benefits and minimize burdens for customers—the essence of delivering value. Because it is important to most customers and defies imitation by competitors, quality service offers a key competitive advantage. Indeed, firms in every industry have demonstrated the differentiating power of excellent service. Yet, despite this, price competition seems to dominate company efforts to provide value. The meteoric growth of Wal-Mart Stores—and the tendency of many firms to lower prices as a first response to softening demand—has focused so much marketing energy on price competition that it has become difficult not to assume that customers care only about price.
A singular focus on price competition means that the firm is competing only on the “burden” component of value and ignoring the “benefit” component. Rather than investing in quality service to “decommoditize” the business, firms are emphasizing low price which serves to further “commoditize” the business. Service in America would be much improved if managers would embrace one central operating principle: the tougher the price competition in our industry, the more important quality service is to our company—because superb service gives customers non-price reasons to do business with us.
In 1993, our purpose in writing a commentary was to consider our research findings and experience holistically as a foundation for offering guidelines to managers on improving service.
We presented our guidance in the form of service quality “lessons,” identifying ten that applied across service industries and were essential to service improvement. They are as follows:
1.Lesson of listening －understand what customers really want through continuous learning about the expectations and perceptions of customers and noncustomers ( e.g...by means of a service quality information system).
2.Lesson of reliability－reliability is the single most important dimension of service quality and must be a service priority.
3.Lesson of basic service－service companies must deliver the basics and do what they are supposed to do?－keep promises, use common sense, listen to customers informed, and be determined to deliver value to customers.
4.Lesson of service design－develop a holistic view of the service while managing its many details.
5.Lesson of recovery－to satisfy customers who encounter a service problem, service companies should encourage customers to complain ( and make it easy for them to do so), respond quickly and personality, and develop a problem resolution system.
6.Lesson of surprising customers－although reliability is the most important dimension in meeting customers’ service expectations, process dimensions( e.g.. assurance responsiveness, and empathy) are most important in exceeding customer expectations, for example, by surprising them with uncommon swiftness, grace, courtesy, competence, commitment, and understanding.
7.Lesson of fair play －service companies must make special efforts to be fair and to demonstrate fairness to customers and employees.
8.Lesson of teamwork－teamwork is what enable large organizations to deliver service with care and attentiveness by improving employee motivation and capabilities.
9.Lesson of employee research－conduct research with employees to reveal why service problems occur and what companies must do to solve problems.
10.Lesson of servant leadership－quality service comes from inspired leadership throughout the organization; from the effective use of information and technology; and from a slow-to-change, invisible, all-powerful, internal force called corporate culture. In our view, these ten lessons represented the foundation for service improvement. The potential for service improvement is diminished if even one of these ten essentials is missing. In our view, these ten lessons represented the foundation for service improvement. The potential for service improvement is diminished if even one of these ten essentials is missing.
After ten years, the question of course is, Are the lessons still relevant? Do they still apply to American firms? We believe they do and wish more businesses had heeded them during the past ten years. Indeed, these lessons have stood the test of time; our regret is that so many firms have ignored them.
Read, for example, the “Fair Play” section and ask yourself, Would the major airlines be in such financial distress today had they paid more attention to fundamental fairness? Many point to the September 11, 2001 terrorist attack as the beginning of the airline industry’s troubles. In fact, the airlines began alienating frequent business travelers long before that, with anti-consumer policies that took advantage of business travelers’ inability to plan their travel weeks in advance. An industry that charges one customer $300 and another $1,300 for seats in the same class on the same flight—with the only difference the timing of the reservation—cannot and will not earn the confidence and loyalty of customers. As we write in the paper, “Customers expect service companies to play fair, and they become resentful and mistrustful when they perceive unfairness.”
If we were rewriting our paper today, we would emphasize the significance of quality service to all companies. We would argue that all companies are service companies in that all companies create customer value through services. Some firms
create value strictly through services and others through goods and services, but all stake their future on the quality of their service. We would stress even more than we did the importance of service reliability to earn the customers’ confidence and the importance of pleasant surprise to exceed customers’ expectations and establish strong relationships. We would stress the role of service quality in creating a differentiated brand; in services, the company is the brand and nothing is more powerful than customers’ actual experiences with the service in creating the brand. We also would stress the role of quality service in improving the quality of work life. Service excellence requires building an achievement culture in the organization, and achieving in one’s work is energizing and satisfying. Excellence is more fun than mediocrity for employees as well as customers.
Yes, the ten service quality lessons still ring true ten years later. Indeed, in this post-Enron business climate, they seem to apply more than ever. The lessons remind us that excellent companies are excellent in the fundamentals. They listen to their customers and employees. They stand behind what they sell. They keep their promises. They invest in service “extras” that competitors ignore. They play fair and they play together. They view quality as a journey, not a destination—as a mission, not a program.
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