Research

Keeping promises: Closing the services gap

Would your customers say that the services they received from your company are the services they expected to get? If not, then your company may suffer from a services quality gap. Marketing professor Mary Jo Bitner, the academic director of the Center for Services Leadership at the W. P. Carey School of Business, says succeeding in services is "all about promises." She and her collaborators have developed a strategic approach that enables companies to evaluate how well they keep their promises and how to close the gaps.

2007-03-28

One of the greatest challenges for all American companies, including those that work business-to-business, is closing the gap between what customers expect to get — beforehand — and what they perceive they got — afterward — according to Mary Jo Bitner, academic director of the Center for Services Leadership, a research center at the W. P. Carey School of Business.

In "Services Marketing: Integrating Customer Focus Across the Firm," a book she co-authored with Valarie Zeithaml of the University of North Carolina, and Dwayne Gremler of Bowling Green State University the marketing professor insists that "services is all about promises." Think about a firm's promises as a triangle, she suggests.

Label the top point "organization," the right hand point "customers," and the left hand point "service providers." Label the right arm "making promises," and the left arm, "enabling promises." The horizontal base is "keeping promises," the essential customer-retention strategy. Only when the sides of this triangle are aligned are companies able to keep their promises to customers, and maintaining alignment is a constant and ongoing challenge, says Bitner.

She recommends a strategic approach to keeping the services triangle aligned based on what has become known as the "gaps model of service quality." A team of researchers, including her co-author Valarie Zeithmal, distilled years of research into the "gaps model," a framework that allows companies to deliver excellent value, year after year.

The customer gap not meeting customer expectations

Bitner describes four challenges captured by the framework (sub-gaps, essentially) that make up the expectation/perception or customer gap:

• The listening gap — not knowing what customers expect
• The designs and standards gap — not designing services to meet customer expectations
• The service-performance gap — not performing the service as designed
• The communications gap — companies fail to match performances to external communications

A company is likely to have an expectations/perception gap if they're failing at any of the four sub-gaps. Failing to match performances to promises is especially damaging, because customers hear companies make promises, such as "your pizza delivered in 30 minutes or less," but all too often, are let down by the firm's inability to enable that promise.

For instance, you call to order a 30-minute pizza and the order-taker says there's a 40-minute delivery time "because we're busy." Enabling the 30-minute guarantee might mean monitoring nightly ordering patterns, a staff that can flex up and down based on orders and constant communication among key players. Without it, the promise is made, then not fulfilled, and the customer turned off.

Speaking at the 21st Annual Services Leadership Institute in Tempe, Arizona, Bitner suggests approaching customer service from a strategic perspective. Dozens of service executives from companies such as IBM, Harley-Davidson, Avnet, Procter and Gamble, and Caterpillar attended the institute held March 26—28.

Start by asking yourself these key questions: Does your company consistently do what it promises for customers? What is required to fulfill these promises? Who keeps promises in your company: clerks, professionals, subcontractors? Have you prepared employees to enable promise-making, and to keep promises? Most importantly, does everyone from management to front-line employees understand your company's promises?

The IKEA example

Bitner points to the world's largest furniture retailer — Sweden-based IKEA — as an example of a company that, despite a meticulous customer-service approach, was still missing the mark with many customers. Here's the story: before IKEA opened its Chicago store, a marketing whiz suggested asking groups of customers at other IKEA stores to describe their ideal shopping experience.

So nine groups, each made up of a dozen IKEA customers, were invited to switch into "wish mode" and share their interior thoughts about the "ideal experience" they might wish for at IKEA. About the ideal experience, they said things like, "I never feel disoriented because I always know exactly where I am in relation to every department," and "If I am buying one item, all of the other items that go with it are nearby." Another said, "shopping is a pleasant, relaxing experience."

The feedback surprised company execs, who thought they already understood their customers' needs. Wisely, they funneled wish-mode results to everyone connected to the Chicago project, from building designers to the register clerks. Then these wishes were actually incorporated into the new store. For instance, the building was designed differently, as a multi-story, octagon with a central atrium that functions as a sort of shopper home-base.

Items were grouped on aisles and displayed so that related purchases were close to each other. On the top floor, a cafe serving Swedish food offered a place to rest and recharge. The experiment was a smashing success. Shoppers returned more often and spend about an hour longer than at other IKEA stores, and an amazing 85 percent of customers polled rated it "very good" or "excellent."

The dimensions of service quality

It's also crucial to know how customers judge a particular company's services, Bitner said. Drawing on research by Zeithaml, Leonard Berry, and Parsu Parasuraman, she pointed to five factors — reliability, responsiveness, assurance, empathy, and tangibles (such as the physical site, equipment, or employee appearance) — as "the dimensions of service quality" that customers react to.

Bitner offered several examples, companies that have used the five factors in compelling advertising campaigns. One, Fannie Mae mortgages, used the photo of an applesauce-slinging toddler in a high chair to accompany an almost tender paragraph describing the agency's approach. There was no mention of interest rates or qualifying paperwork, just a clear understanding of the customer's needs and priorities. As Bitner said, "simple but extremely effective."

"Start digging behind [these factors] to find what you can do to make customers feel you are reliable. What does responsiveness mean to your customer? Is it a live voice after two rings of the telephone?" she continued. Does it mean you deliver their order within one week, two days, or two hours? Does it mean you quickly get back to them when they have a complex question, with an answer focused on their special situation?

She laid out several strategies to close the listening gap, starting with monitoring customers through better research and asking employees to share their front-line experiences and knowledge of customers. It's also important to aim at building relationships with customers over time rather than focusing solely on drawing in new shoppers, she said. Ask yourself: what are my customer's needs, and how do they change over time?

Another best practice involves knowing — and acting on — what the customer expects when the company has failed somehow. Bitner stresses that the savvy firm empowers employees to make real-time, comprehensive redress, so that the customer walks away mollified, understood, even pleased at having been taken seriously, rather than told "a manager will call you about this tomorrow."

Best practices to close the gap

To profit from companies that have learned to close the service quality gap, look to FedEx, eBay or Harrah's Entertainment, she said. FedEx actually encourages customer complaints, considering them valuable field data, and routinely does customer-satisfaction tracking studies. eBay is known for letting customer needs influence pilot projects and service expansions, thanks to information gathered during weekly, hour-long teleconferences with customers.

And as many gamblers know, Harrah's has developed an efficient and huge database on actual customer behavior; it's not unusual to get a personalized invitation to an event similar to one attended in the past, or discount coupons to your favorite Harrah's restaurant.

There are similarly effective best practices to close the design and standards gap, starting with the catchy phrase, "service R&D," or "research and development." Bitner advocates "blueprinting" the company's services to get inside the customer's head, to understand the service process from the customer s point of view.

It's also useful to start measuring service operations from the standpoint of the customer, not the company, she said. For instance, Yellow Transportation (a division of YRC Worldwide), a freight delivery firm, and Starbucks share a wholly consumer-centric culture based on cultivating customer participation and buy-in.

The Marriott hotel chain is an example of a corporation that's nailed how to close the service-performance gap. Executives there figured out that well-treated employees take good care of customers, so it's not surprising that Marriott always makes those "top companies to work for" lists.

Everything human-resource related, from hiring to training programs, is specifically structured to drive customer satisfaction. IBM Global Services is another firm that focuses on human resource techniques; in this case, specifically hiring and training people to work on services R&D, and training employees in how to build key relationships.

Roadmap Out of the Gap

To close the communications gap, first understand that anything that sends a message to the customer can interrupt the company's service delivery. Like an off-key note in a melody, inconsistent cues can trigger trouble. Does your marketing department over-promise what operations can fulfill? Is the company's website similar in style and tone to other formal communication venues such as the print advertising campaign and television commercials?

Are outlet stores rundown and full of second-rate merchandise, while traditional retail stores are glitzy and upscale? Everything from the annual report on charitable giving to the discount coupons in an ad circular function as external communications to customers, Bitner said.

She gives a nod to the Mayo Clinic for sending a consistent, clear message of "we care about you" in everything from design of the soothing lobby area, which is a sunny atrium filled with live plants and live piano music, to the friendly cafeteria workers. Employees are trained to offer assistance rather than waiting for a patient to ask for help. Golf carts driven by retirees scout the extensive parking lots, volunteering rides to the lobby.

Doctors dress in business suits, work in teams and communicate frequently and directly with their patients, driving home Mayo's commitment to patient care and personal interaction. Everything and everyone at Mayo reinforce the 100-year-old message that the "The best interest of the patient is the only interest to be considered." Easy to say, not so easy to do, unless you commit to it day-to-day and year after year as Mayo has done.

Top Takeaways

• Bitner suggests every company interested in boosting service quality start by drilling down on how well it is meeting or exceeding customer expectations.
• She suggests that using the services triangle and the gaps model of service quality to strategically analyze your service operation can shine light on your greatest weaknesses and suggest strategies for closing those gaps.
• When developing a new service, the triangle and gaps model can also help you to determine whether you are truly "ready to launch"
• Which of the four sub-gaps are your strong points? Weak points?
• Are you listening, really listening to your customers?
• Do you design services that meet those expectations?
• Are you delivering consistent levels of quality based on those designs?
• Does your external communication match with what you deliver?
• In other words, is your organization aligned around what you have promised to do for your customers? If not, they may not be coming back.

Marketing Faculty