Customer Relationship and Gap Model Theory

1. INTRODUCTION

Within the growing service sector, the biggest challenge remains ways in dealing with service quality. The essence of quality is a vital component, thus most anticipated aspects by all customers. High quality and exceptional is an imperative manner in winning and retain customers in a long period. Management which has always been the foundation suggests several concepts and methods on how to tackle with quality of service. The Gap Approach proposes valuable suggestions on how to comprehend the concept about quality of service and how it appears in service firms. According to Parasuraman et al. (1985) model which consists of: “customer expectations versus their understanding by managers, perception of customer expectations managers versus service specifications, service versus compliance specifications, and service versus service information.”

Therefore, in this document, we will address the issue of service management and marketing techniques. We will start with an introduction to the gap model of service quality, and will also explore then comprehensively. We will again expatiate the detailed definition of the gap model and its relevance.

The dimensions that customers use when evaluating gap of service quality model, including the gaps which firms must ascertain, control, minimize, as well as value, will be discussed.

We will also review customer relationships, and will analyze the links between the gap model and customer relationship assessment.

The rest of this report will outline the model of customer relationship and gap model theory through examples.

Finally, the conclusion will summarize the vision obtained from this report.

2. GAP MODEL OF SERVICE QUALITY

Parasuraman and his colleagues developed the gap model of service quality which assists identify gaps in obvious service qualities that customers get and what may be anticipated. Service providers want to know what matters to customers. Quality of service is a good guess. Price, and to a lesser extent product quality, also count. But for service providers, customers are more interested in quality of service.

2.1 Definition of Service Quality

There are numerous number in respect to what service quality means. Service quality can simply be put as it is a product of the effort that every member of the organization invests in meeting the needs of its customers. “It can also be defined as the primacy or brilliance of a firm recognized by the customer.” (Mbaknol: Online; 2005). Quality is the provision of a suitable service than what a customer expects.

Service quality is defined as provision of excellent service in relation to customer expectations. It is also states categorically that you would not accept anything less your stockholders, or colleagues you work with.

2.2 The Gap Model, SERVQUAL and its Theories

The model of service quality gap emerged by Parasuraman et al. (1985), which was recently not long ago recounted by Bitner and Zeithaml (2003). It has aided as the foundation for marketing. The notion of gaps in quality which was propounded by Parasuraman et al. (1985), its inception was found in the theory of service quality as a gap in what customers perceive and they expect which was also formulated by Parasuraman et al. In essence, quality of service demonstrates what customers expect and have perceived. This, moreover, means that expectations of customers are standard and imaginative, that is customers have an idea about what providers of service must provide which is according to Parasuraman et al. (1994).

The Gaps of Service Quality

1. First Gap – Having no knowledge of the expectation of the customer-: This gap is between the perceptions of firms on what the consumer expects and the absolute service that would be required.
2. Second Gap — It is measured in the manner in which the design of the service must correspond to what the firm is perceiving in respect to the expectation of the customer.
3. Third Gap – This gap shows the variation in the design and the delivery of service; which can also be referred to as performance gap.
4. Fourth Gap – This is the gap that shows what has been stipulated by the firm doesn’t meet what is expected to be delivered. It is called the gap of communications.
5. Fifth Gap – It is the overall accumulation of the different gaps from the first gap to the fourth gap which also shows the variation in the expectation and perception of customers in service.
   1.      SERVQUAL

The model of gaps considerably measures several quality of service models suggested by different writers.  In 1998, Parasuraman et al, furthered their research with the introduction of SERVQUAL in quality of service to understand the perceived service quality of consumers. “The gaps model, and SERVQUAL were used together which was later explained in their Delivering Service Quality book which was published in 1990.” 10 different quality of service dimensions were initially found which are: “Responsiveness, Access, Courtesy, Security, Tangibility, Reliability, Competence, Assurance, Empathy, and Communication”

Further research into the growth and effectiveness of SERVQUAL made Parasuraman et al to agree conclusively at the following five service quality dimensions.

1. Reliability-: “It is the capability in performing the service that has been stipulated or advertised accurately as well as dependently”. 

2. Tangibility-: “It is the reflection of the facilities’ physicality, crew communication, as well as concrete equipment appearance”.

3. Assurance-: “It is the actual grasp and cordiality of employees and how capable the firm inspires confidence together with reassurance”

4. Responsiveness-: “It is the desire to assist a customer in such a way fast service can be provided”. 

5. Empathy-: “It’s the individual interest that the company provides to its customers. It also means the care; individualized attention customers receive from the firm”.

Figure 2.1: The Model of Quality of Service Gap

Source: Parasuraman et al. (1985)

How firms analyze these gaps is one obvious problem especially when they do not provide service to their customers directly. For such firms, one obvious possibility in identifying the paramount areas that expectations of customers are not realized is the use of the SERVQUAL. As may be needed, the studied SERVQUAL findings would provide a better analytical gap results, as suggested by Parasuraman et al. The merit of using SERVQUAL – it was convenient when used by firms’ managers involved in servicing. It is also the fundamental manner of ascertaining quality of service.

3. CUSTOMER RELATIONSHIPS

In marketing literature, the term customer relationship and marketing relationships are used interchangeably. These terms have been used to highlight a variety of topics and perspectives. Some of these topics provide a close and functional marketing perspective, while others offer a broad perspective and typical transfer in both approach and orientation. Before we delve deep into what Customer Relationship is, the benefit and its management, we first of all define what Marketing as a broad term means.

3.1 Definition of Marketing

According to Egan (2008), “marketing is a comprehensive outlook that attends to the needs and wants of the customer as well as that of every other stakeholder”.

Kotler et al. (2001) postulate that “it deals vitally with customers more than it does any function of business – the comprehension, formation and providing customer worth and contentment are the imperative of part present-day marketing”.  

Kotler et al. (1983), provide a thought provoking definition, which describes “marketing as analyzing, designing, executing and supervising of programs essentially outlined to form a trade relationship in realizing the objectives of a firm”, in his earlier research work.

3.2 Relationship Marketing (RM)

In his well-known paper, Terblanche (2003), states that relationship marketing has “gained a considerable attentiveness from the early 1990s, but cautions there hasn’t been adequate research into the relationship which exist between customers and the market”. A very simple description of relationship marketing is the one proposed by Reinartz et al. (2003), which defined “it as creating and preserving of an everlasting relationship between sellers and buyers.”

Relationship marketing can also be defined as the generation, preservation, and improvement of concrete, also important connection between the customers and several participants.

Figure 3.1: Relationship Marketing roots

Source: Möller et al. (1999)

1. Interaction and Networks emanated from the connection which exist among marketing agents engaged in several methods.
2. Marketing Channels were perceived and established in an intrinsic productive cooperation as well as the adoption of will and connection. 
3. Direct Marketing and Database Marketing were to attune communication profusion in improving efficiency via an equipped and stronger operations in marketing.
4. Marketing of Services aim was to push connection existing within customers and firms, whilst maintaining a great service experiences.

3.3 Customer Relationship

Baran et al. (2008) said that,“many different, however, related concepts for years has been used for customer relationship.” This shows that there are several diverse suggestions as to what customer relationship means. According to Payne et al. (2005) “how customer relationship is perceived is not about the use of words, but it is about how it affects manners in which firms understand and adopt the notion”. For Gummesson (2002), “the importance of customer relationships is by turning it into empirical applications through the use relationship marketing values and desirable methods.”

3.3.1 Benefits of Customer Relationship

According to Baran et al. (2008) these are the benefits of customer relationship:

•          Customer relationship assists the firms in discovering possible and current customers.

•          Equips processing of customers in moving from one to a different marketing component by the firm which is effective in retaining their service and fosters the relationship even further.

•          Motivation process of up-selling leads in the spending of additional monies on a better, everlasting or important services or products by customers, which effectively makes the connection extra beneficial. 

•          Helps in developing customers which accentuates the essence of sustaining the connections between firms and their customers.

•          It pinpoints all efforts in assuring existing or old customers trying different services or purchase extra or new products from the same provider.

3.4 Management of Customer Relationship

It is an intrinsic way managing a firm’s cooperation with existing and future customers. According to Shaw (1991) “It deals with every system which gathers data in diverse channels”  

3.4.1 Customer Relationship Management Benefits

1. According to Corie (2011) “It allows firms to fully cooperate with their customers severally, through distinctive messages and other related communication channels”
2. Increased distinctive service: It equips firms to understand their customers as well as gain an efficient comprehension concerning what a customer prefers, demands and requires.
3. Segmentation of customers: It helps in the categorization of customers into similar groups
4. According to Silverman (2000), “it improves companies’ responsiveness to a much better customer’s desires and requirements”.

4. CUSTOMER RELATIONSHIPS AND THE GAP MODEL EVALUATION

The evaluation of this connection is the satisfaction customers enjoy from the services provided by the firms.

In reference to new observation of vital relationships that exist among customers, employees, and all participants, Payne (2000), suggests that the importance in assuming an extra knowledgeable and incorporated viewpoint will help attain the link that exists within them.  The figure 4.1 which is a Linkage Model shows the relationship existing in the gap model and customer relationship in terms of “behavior of management and leadership, attitudes of employee, satisfaction of customer and lastly financial performance results.”

 Figure 4.1: The linkage model 

Source: Payne (2000)

Being aware of the existence of components of stable order within the linkage model, and that each component is of the essence and requires a considerable satisfaction before the next component can be acknowledged is very imperative.

According to Reinartz et al. (2000), firms need to assume an orientation program on how to manage their customers and the essence to ponder on ways that their operations will ultimately impact the connection with all the customers.  

Precisely, the model of linkage shows the actual steps in ensuring a successful customer relationship. The first step which is commitment of management.  This would automatically lead to a more committed and motivated staff member, which automatically delivers an impressive service to the customers – which brings satisfaction and loyalty. When such is achieved, more new customers are acquired, sales are increased, therefore translates into profit.  Crosby (2002) “says that even a lot, if not all front office employees are equipped on the notions of exhibiting listening abilities as well as politeness to their customers, yet don’t perceive it as a critical step thereon since they don’t know it is an act of relationship management”. For a concrete connection between gap model of service quality and customer relationship, managerial service mission statement should be established in collaboration with all stakeholders the organization.  McKenna (1991) “states a more strategic and fundamental point view which says firms must always place the customer first and shift the role of marketing from influencing the customers to real involvement with the customer”.

5. THE THEORY OF GAP MODEL AND CUSTOMER RELATIONSHIPS USING EXAMPLES

In theory, customer satisfaction levels derived from gap model and customer relationship are vital in the links retaining customers, improved sales and profit, and so forth, albeit such relationships are somehow difficult. Moreover, firms are reluctant on spending extra money to serve customers unless they are extremely certain it is very essential.

Customer professionals and different researchers for years have endeavored their best in mapping out all relationships of several factors that influence satisfaction by developing different models.

Satisfaction of customers plummet when customers’ expectation and what they receive gap increases. A firm that is able to reduce the gap tends to suggest that satisfaction is certainly going to increase in the model.

5.1 Examples of Gap Model and Customer Relationships

Telecommunications for example are changing rapidly. Rapid developments within the telecommunication sector are amending infrastructural structures and how customers and firms interact in a network that serves as a perfect example of gap model and the relationship between companies and their customers. And since the provided services and products by the firms are indistinguishable, the main focus falls on creating an everlasting connection with the service users (subscribers). The created connection or relationship needs to be controlled in an efficient and productive way.

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Due to the vast customer size and large scale operations, Gap Model and Customer Relationship in telecommunication is supported which technological strategies with strong orientation of market, however, with the focus on customers. Amazon an electronic commerce company, also, has realized exceptional achievement via its relationship with customers. Amazon used a collaborative filtering, distinctive greetings, and others for their customers. Again, they implemented customer relationship education for their staffs.

5.4  Causes of Service Quality Problems:

• Production and consumption and labor intensity inseparability.
• Intermediate or internal customer’s inadequate services.

6. RECOMMENDATION

It must be a necessity for firms in using data extracting technologies as well as web searches to get in depth understanding relational signals. And with the help of Social Media tools such as Twitter, LinkedIn, Facebook, etc. firms can capitalize on them in picking up and analyzing information. Capturing of such exclusive data whilst understanding the customer allows firms to effectively change customer’s messages into facts and information that would support and assess firms to comprehend an incoming desired relations of customer’s with the firm’s brand.

Implementation of training programs by many firms on educating staffs in effectively recognizing, and efficiently creating a stronger relationships of customer-brand is imperative. 

Social Customer Relationship Management refers to the implementation of social media and other related technologies in engaging as well as serving as a tool to acquire information from consumers. “Firms can use social media to gain more attention for their brands, products and services since most of the people, importantly the youth, are on the increase when it comes to the use of social media, which will tend to build a better customer relationship” (Harvard Business Review; 2015).

Twitter, LinkedIn and Facebook which all forms part of the diverse social media instruments can be used by firms in tracking and communicating with customers. Most of these customers who uses social media also share opinions as well as their experiences the products and services which are manufactured or provided by firms, and in turn these opinions and experiences will provide firms with more insight for better growth.

7. CONCLUSION

In this paper, quality of service, definition and gaps model were discussed.  SERVQUAL for assessing the difference between what customers perceive and expect were also reviewed.  The research provided significant approach, which is understood to be that, there are a number of things that needs to be addressed and to ascertain the methods demonstrated as well as in the design and improvement of service quality. 

Different definitions pertaining Relationship Marketing and Customer Relationship together with Management of Customer Relationship and other closely-related terms were discussed after Marketing which is a broader concept was introduced.

In conclusion, understanding how customers effectively see quality of service and being able to ascertain its measurement can be beneficial to the industry in so many ways. An effective measurement in quality of service can bring forth significant information that can be used in management of quality service provision; ergo, service firms would comprehensibly be capable in monitoring and maintaining quality service. Getting access to quality service and better comprehension on ways every different dimensions of gap model affect the entire service quality and customer relationship would provide firms an efficient design in implementing the process of service delivery.

Furthermore, in identifying all the weaknesses and strengths in connection with service quality, firms would be able to apportion all the needed resources in providing a better service to their customers. 

Lastly, the study of service quality gap model and customer relationship is both imperative and demanding. But with a strong customer relationship, subsequent efforts will help in advancing the comprehension of the notion and the necessary ways in improving service quality.

8. BIBLIOGRAPHY

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