Advantages and Disadvantages of the SERVQUAL Model

Introduction

This chapter provides an overview regarding the SERVQUAL model, his advantages and disadvantages; followed by the variables (independent and dependent variables) that constitute the model; and finalizing with a conclusion.

Knowing the customer(s) is the key to a successful customer service as the idea is to create, deliver and communicate superior value. The service and/or products offer should answer to the needs and demands. Customers are the most important people for any organization. They are the resources upon which the success of the business depends. Understanding customers are necessary not only because of their effect on marketing decisions but because customers’ activities influence the entire organization. When thinking about the importance of customers it’s useful to remember the following points (Christ, 2009):

Repeat business is the backbone of selling. It helps to provide revenue and certainty for the business;

Organizations are dependent upon their customers. If they do not develop customer loyalty and satisfaction, they could lose their customers;

• Without customers the organization would not exist;
• The purpose of the organization is to fulfill the needs of the customers;
• The customer makes it possible to achieve business aims.

Customer demands and preferences of different products and services is a subject of concern for many business areas. For the security service industries it means providing a variety of products and services that customers wants. However, these customers’ preferences and choices are not similar from one customer to another. These differences make it hard for the security services companies as for other businesses to meet diverse demands. Thus, the knowledge of customers’ preferences and their choices of products and services provided is one of the most significant characteristic for meeting customers’ expectations and exceeding their perceptions.

Based on the abovementioned nothing would benefit companies more than an accurate and valid measure of service quality that helps them in measuring their performance. Such a measure would help them in evaluating their performance and taking corrective actions wherever required in order achieve their mission (Guar & Agrawal, 2006).

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Service Quality (SERVQUAL)

History

As early as 1985 the authors Parasuraman, Zeithaml and Berry identified ten components of service quality namely Reliability, Responsiveness, Competence, Access, Courtesy, Communication, Credibility, Security, Understanding/Knowing the customer, and Tangibles. These ten components were later (1988) merged into five dimensions namely Reliability, Assurance, Tangibles, Empathy and Responsiveness. Of the original ten components only three components remain – Reliability, tangible and Responsiveness remained distinct, while the remaining seven components merged into two aggregate dimensions of Assurance and Empathy. SERVQUAL was developed by measuring service quality across service environment (Guar & Agrawal, 2006). Measurement allows for comparison before and after changes, for the location of quality related problems and for the establishment of clear standards for service delivery (Shahin, 2006)

The SERVQUAL model

Service quality is linked to the concept of perceptions and expectations. Customers evaluate service quality by comparing what they expect with how a service provider actually performs. Thus, service quality can be defined as the difference between customers’ expectations of service and their perception of actual service performance; formally the degree and direction of discrepancy between customers’ service perceptions and expectations. “Service quality is a measure of how well the service level delivered matches customer expectations. Delivering quality service means conforming to customers’ expectations on a consistent basis”. Customers’ perceptions of service quality result from a comparison of their before-service expectations with their actual-service experience. The service will be considered excellent, if the perception exceed expectations; it will be regarded as good or adequate, if only equals the perceptions; the service will be classed as bad, poor or deficient, if it does not meet them. Based on this the authors developed a scale for measuring service quality, which is mostly popular known as SERVQUAL. This scale operationalizes service quality by calculating the difference between expectations and perceptions, evaluating both in relation to 22 items that represent the 5 service quality dimensions knows as Tangibles, Reliability, Responsiveness, assurance and Empathy (Zeithaml & Parasuraman, 2004).

Figure 2-1: Conceptualization of the SERVQUAL model

SERVQUAL is the dominant approach to quantitatively assessing service quality. Using a survey approach, SERVQUAL elicits ratings of customer’s expectations and perceptions on each of the five dimensions described above. Service quality can be also described as “closing the gap” between expectations and perceptions of service. Research has identified four “company gaps” that underlie the overall shortfall in customers’ expectations/perceptions as developed by Zeithaml, Parasuraman and Berry.

In this study of SEVQUAL analysis, 21 questions instead of the original 22 will be used to measure the performance across abovementioned five dimensions, using a five (5) point likert scale measuring both customer expectations and perceptions. After data collection by means of the questionnaires the gap between customer expectations and perceptions will try to be closed.

The gaps model positions the key concepts, strategies, and decisions in delivering quality service in a manner that begins with the customer and builds the organization’s tasks around what is needed to close the gap (see figure 2-2).

Figure 2-2: SERVQUAL Gaps-Model

Source: Zeithaml, V. & Parasuraman, A. (2004)

The graph illustrates that the central focus (top half) of the gaps model is the customer gap. To close this all-important customer gap, the model suggests that four other gaps-the provider gaps-need to be closed. The numbering of the gaps from 1 to 5 represents the sequence of steps (i.e., market research, design, conformance, communication, and customer satisfaction) that should be followed in new service process design.

SERVQUAL Gaps

Gap 1: Not Knowing What Customers Expect – gap 1 is the difference between customer expectations of service and company particularly management, understanding of those expectations. A number of factors have been shown to be responsible for gap 1. First, because marketing research is a key vehicle for understanding consumer expectations and perception of service, the size of gap 1 depends greatly on the amount of marketing research conducted. A second factor is lack of upward communication. Frontline employees often know a great deal about customers but management may not be in contact with frontline employees and may not understand what they know. A third factor is a lack of company strategies to retain customers and strengthen relationships with them. A finally, inadequate attention to service recovery – understanding why people complain and what they expect when they complain and how to develop effective strategies for dealing with inevitable service failures.

Gap 2: Not Selecting the Right Service Design and Standards – a recurring challenge in service companies is the difficulty of translating customers’ expectations into service quality specifications. Thus, provider gap 2 reflects the difference between company understanding of customer expectations and development of customer-driven service designs and standards. A number of factors have been shown to be responsible for gap 2. First of all, inadequate commitment to service quality; secondly a perception of unfeasibility, and finally, inadequate task standardization and an absence of goal setting.

Gap 3: Not Delivering to Service Standards – is the difference between development of customer-driven service standards and actual service performance by company employees. Even when guidelines exist for performing services well and treating customers correctly, high quality service performance is not a certainty. Standard must be backed by appropriate resources (people, systems and technology) and also must be enforced to be effective – that is, employees must be measured and compensated on the basis of performance along those standards. Thus, even when standards accurately reflect customers’ expectations, if the company fails to provide support for them – standards do not good. Factors influencing gap 3 are: poor employee-job fit and poor technology fit, inappropriate supervisory control systems, lack of teamwork and perceived control.

Gap 4: Not Matching Performance to Promises – advertising, sales force and other communications set the standard against which customers assess a company’s service quality. Ensuring that all the company’s external messages are aligned with what the company delivers is more difficult in service because what is delivered critically depends on employees’ interactions with customers. This is also a result of inadequate horizontal communication and propensity to over-promise.

Gap 5: Not Delivering the Service (perception) as being perceived – this is the only gap that can be examined solely on the data from the customer; study of other gaps, while important, would require data collection from companies themselves.

Recognition of factors, which influence customer’s expectations, will help the suppliers applying appropriate procedures to modify customer’s expectations and to provide customers with the service expected (Rahaman, Abdullah & Rahman, 2011)

Zeithaml & Parasuraman mentioned 4 factors in shaping customers’ expectations:

• Word-of Month: the first factor that potentially determine customers’ expectations, is the word he or she heard from other costumers;
• Personal needs: the second factor that to a certain extent modifies customers’ expectations is obtained as a result of a particular situations and requirements;
• Prior experience: is the third factor influencing customers’ expectations, which indicate the way the customers has experience prior service received;
• Advertisement and Personal experience: the fourth factor playing a key role in shaping customers’ expectations is called external customers. These communications contain all direct and indirect messages sent from supplying organization to customers.

One of the most important factors which of course belong to supplier’s external communication collection is service cost of price. This factor plays a significant role in shaping customer’s expectations and especially those of organization future customers.

Advantages and Disadvantages of SERVQUAL

Advantages

In current service literature, there are a number of key instruments available for measuring service quality. Through, the SERVQUAL model has been the major generic model used to measure and manage service quality across different service settings and various cultural backgrounds and is valued by academics and practitioners. Below are some of the main advantages and or reasons to use the SERVQUAL model to measure the level of customer satisfaction with an organization.

It can be used on a regular basis to track customer perceptions of service quality of a particular firm compared to its competitors. Once data have been analyzed they can be visually presented so that it is easy to identify strengths and weaknesses relative to competition.

It provides the opportunity for a firm to assess its service quality performance on the basis of each dimension individually as well as the overall dimensions;

It allow the firm to classify its customers into different segments based on their individual SERVQUAL scores;

SERVQUAL model can be used in various service setting/sectors and provides a basic skeleton that can be adapted to fit the specific attributes of a particular organization. It is applicable across different empirical context and various countries and cultural backgrounds

SERVQUAL gap analysis approach seems a logical and straightforward concept and the questionnaire is also pre-described and can be adapted as required;

Finally, SERVQUAL is a tried and tested instrument which can be used comparatively for benchmarking purposes. It benefit from being a statistically valid instrument as a result of extensive field testing and refinement (Al Bassam & Al Shawi, 2010).

To appreciate more fully all the benefits of using SERVQUAL surveys should be conducted every year, for the following reasons;

• To allow yearly comparison;
• To determine how service improvements have affected customers’ perceptions and expectations of the service over time and;
• To determine the effectiveness of service development and improvement initiatives in targeted dimensions.

Implementing SERVQUAL and measuring customer perception and expectation of service may well result in customer retention, customer loyalty and positive word-of-mouth, increasing opportunity for cross-selling, employee benefits, improved corporate image, profit gains and financial performance. But measuring too often may well result in customers losing their motivation to answer correctly (Shadin, 2006).

Disadvantages

However, apart from its wide use, a number of theoretical and operational criticisms of the measurement model have been pointed out.

Theoretical

First of all Validity, the validity of the SERVQUAL model as a generic instrument for measuring service quality across different service sector has been raised. And that a simple revision of the SERVQUAL items is not enough for measuring service quality across different service settings;

Secondly Gaps Model, there is little evidence that customers access service quality in terms of Perception (P) minus Expectation (E) gaps. This because they found that the dominant contributor to the gap score was the perception score because of a generalized response tendency to rate expectations high ;

Process Orientation, SERVQUAL is process oriented it focus on the process of service delivery, not on the outcomes of the service encounter, while process and outcome together is a better predictor of consumers choice than process or outcome alone;

In the fourth place Dimensionality, SERVQUAL five dimensions are not universal. Items do not always load on to the factors which one would a priori expect; and there is a high degree of inter correlation between the five dimensions. Meaning that the researcher should have work with the original ten dimensions rather than adopt the revised five;

Finally Model Objections, SERVQUAL is based on an expectation model rather than an attitudinal model besides SERVQUAL fails to draw on establishing economic and psychological theory (fail to draw on the large literature on the psychology of perception).

Operational

First of all Expectations, The term expectation is polysemic; consumers use standards other than expectations to evaluate service quality;

Secondly Item Composition, SERVQUAL 4 of 5 items cannot capture the variability or the specific context meaning within each service quality dimension, even though authors acknowledge that context specific items can be used to supplement SERVQUAL, but the “new” item should be similar in form to the existing SERVQUAL item;

In the third place Moment Of Truth (MOT), customer’s assessment of service quality may vary from MOT to MOT. Services are delivered over several MOT or Encounter between service staff and customers. And evidence shows that customers evaluate service quality by reference to these multiple encounters;

Polarity, The reversed polarization (rewording) of items in the scale causes respondent error. Of the 22 items of the SERVQUAL questionnaire, 13 statements pairs are positively worded and nine pairs are negatively worded. The negative are the full set of responsiveness and empathy statements. Item wording creates data quality problems and calls into questions the validity of the instrument

Scale Point: the seven -point Likert scale is flawed. The Likert scale has been criticized on several grounds, although none are specific to SERVQUAL, but has an indirect influence. It has been criticized for its lack of verbal labeling for points two to six. This will cause respondents to overuse the extreme ends of the scale;

Two administration, two administration of the instrument causes repetitiveness and confusion. Respondents appear to be confused by the two administration of the E and the P versions of the SERVQUAL, which will result in imperil data quality. Besides the timing of the administrations, asking respondents to complete the two questionnaires at the single sitting (Buttle, 2006).

SERVQUAL Independent Variables

As already indicated in paragraph 2-1 the SERVQUAL model is constructed based on its initial 10 dimensions (Reliability, Responsiveness, Competence, Access, Courtesy, Communication, Credibility, Security, Understanding/Knowing the customer, and Tangibles)

• Reliability: the ability of an organization to accurately achieve in the proper time and according to the promises tit has made to its clients;
• Responsiveness: the tendency and willingness of services providers to help clients and satisfy their needs, immediately reply to their inquiries and solve their problems as quickly as possible;
• Competence: having adequate skills and knowledge that enable the employees to perform their jobs properly
• Accessibility: providing easy access to a service in term of location and through services provided via the telephone, the internet or any other means of communication;
• Courtesy: treating clients respectfully in a polite friendly manner, understanding their feelings and answering their phone calls gently;
• Communication: this occurs through gentlemanly listening to the client conveying information to them clearly and facilitating external communication with workers;
• Credibility: this can be achieved through full trust and confidence in the service provider as well as his honesty and straight forwardness;
• Security: this depends on whether the service is free from risks and hazards, defects or doubts so that it provides bodily safety, financial security as well as privacy;
• Understanding/knowing the customer: this can be made achievable through the ability to pinpoint the customers’ needs as well as understanding their individual problems;
• Tangibility: this includes physical aspects connected with service such as instruments and equipment, persons, physical facilities like buildings and nice decoration and other observable service facilities (Mohammad & Alhamadani, 2011).

Later these 10 dimensions were merged into five dimensions namely Reliability, Assurance, Tangibles, Empathy and Responsiveness (see figure 2-3 below).

Figure 2-3: 5 dimensions of SERVQUAL

Tangibility

Reliability

Empathy

Responsiveness

Assurance

• Tangibles: Appearance of physical facilities, equipment, personnel, and communication materials. It translate to CSS appearance and conditions of the building interior, (furniture’s, equipment) and exterior, uniform of the staff (patrol officers and guards and centralists) companies signs and advertisements’ materials;
• Reliability: Ability to perform the promised service dependably and accurately or delivering on its promises. This dimension is critical as all customers want to deal with firms that keep their promises and this is generally implicitly communication to the firms’ customers. For the security industry reliability is interpreted as delivering safety and security immediately as this is required;
• Responsiveness: Willingness to help customers and provide prompt service. This dimension is concerned with dealing with the customers’ requests, questions and complains promptly and attentively. A firm is consider to be responsive when it communicates to its customers how long it would take to get answers or have their problems dealt with. To be successful companies need to look at responsiveness from the point of view of the customer rather than the company’s perspectives;
• Assurance: (including competence, courtesy, credibility and security). Knowledge and courtesy of employees and their ability to inspire trust and confidence (combines original dimensions of competence, courtesy, credibility, and security). Assurance may not be so important relative to other industries where the risk is higher and the outcome of using the service is uncertain (think about for example the medical and healthcare industry);
• Empathy: (including access, communication, understanding the customer). Caring, individualized attention the firm provides its customers (Combines original dimensions of access, communication, and understanding the customer). Customers should be treated as they are unique and special. There are several ways that empathy can be provided: knowing the customer’s name, his preferences and needs. Many small firms use this ability to provide customized services as a competitive advantage over large firms. This dimension is more suitable in industries where building relationships with customers ensures the firm’s survival. Empathy in security context could mean showing concern in times of service failure and providing service recovery of providing adjustable/suitable (customer specific) services.

And as can be seen in figure 2-4 below, these 5 dimensions influence the quality of service, but also the service delivery process which consequently influence the level of customer satisfaction. These 5 variables are the independent variables, while the quality of service, the service delivery process and the level of customer satisfaction are the dependent ones.

Figure 2-4: SERVQUAL Total Relationship of Variables

Tangibility

Reliability

 Empathy

Responsiveness

Assurance

Service Quality

 Customer Satisfaction

Service

Delivery Process

SERVQUAL Dependent Variables

Service Quality

Quality is such an important issue that it is a really significant concept in our real life. Quality comes from the Latin word ‘Qualitas’ which refers to the nature of a person or the nature of an object. It is regarded as a strategic organizational weapon. And the pressing need of developing service organizations and upgrading their services necessitates the measuring of service quality. Service Quality is an approach to manage business in order to ensure full satisfaction of the customers which will help to increase competiveness and effectiveness of the industry. Quality in service is very important especially for the growth and development of service sector business enterprise, resulting into customer satisfaction (Rahaman, Abdullah & Rahman, 2011). With the increase of the importance of service sector in the economy worldwide including Curacao which primary source of income is the service sector, the measurement of service quality becomes more important. Different strategies are formulated to retain the customer and the key of it is to increase the service quality level. Parasuraman and Zeithaml noted that that the key strategy for the success and survival of any business institution is the deliverance of quality services to customers. The quality of service offered will determine customer’s satisfaction and attitudinal loyalty. Company’s competiveness in this post-liberalized era is determined by the way it delivers service. But service quality is a concept that has risen based on the abovementioned considerable interest and debate because of the difficulties in both defining it and measuring it. Firms with high service quality pose a challenge to other firms. Again service quality considered as the difference between customers’ expectations of service and perceived service. If expectations are greater than performance, then perceived quality is less than satisfactory and hence customer’s dissatisfaction occurs (Rahaman, Abdullah & Rahman, 2011).

Service Delivery Process

Each and every company who strives to achieve a higher level of customer satisfaction introduces a service delivery process in order to verify if the service is delivered according to those descriptions, this can also be seen on figure 2-4. Thus, any study of the efficiency of service organizations must focus on the role of process design and performance. CSS has also such service delivery procedures and guidelines “alarm-opvolging” procedure. The design and implementation of service delivery processes plays a key role in the overall competitiveness of modern organizations provide clear evidence that process capability and execution are major drivers of performance due to their impact on customer satisfaction and service quality. Traditional efficiency studies measure the performance of a firm by its ability to transform inputs into outputs. However, the actual way in which these inputs are transformed to outputs is often overlooked. That is, each firm’s operation is conceptualized as a black box: inputs go in and outputs come out; and little analytical attention is paid to the inner workings of the transformation process. Researches argue that the actual design of the transformation process is a critical component in the performance of a firm. The service delivery process should describe how process capabilities and people impact business performance. Their work provides the framework from which we are able to talk about how much inefficiency in process performance is due to the wrong design and how much is due to poor performance. Further the design of the transformation mechanism, or the process design, must be fully studied and integrated into performance analysis in order to provide useful managerial recommendations and achieve a higher level of satisfaction (Frei & Harker, 2008).

Customer Satisfaction

Satisfaction became a popular topic in marketing during the 1980s and is a debate topic during both business expansions and recessions. Most discussions on customer satisfaction involve customer expectations of the service delivery, actual delivery of the customer experience. But also in this intense competition, the key to sustainable competitive advantages lies in delivering high quality of service that will also turn in customer satisfaction (Mohammad & Alhamadani, 2011). Mixed findings exist regarding the casual direction between service quality and satisfaction. Does customer satisfaction lead to service quality or vise verse. Recent studies have characterized service quality perceptions as an outcome of satisfaction. Customers can evaluate a service (be satisfied or dissatisfied) only after they perceive it. Many authors who studied the relationship between these two variables have shown that service quality determines customer satisfaction (Culiberg & Rojšek, 2010).So can be concluded and what can also be seen in figure 2-4, Service Quality and Service Delivery process both influence the extent of customer satisfaction. Firms that provide superior quality of service have a more satisfied customer base. But also authors report that continuous improvement of service operations in which the actual services experience is assessed (Mohammad & Alhamadani, 2011).

Conclusion

Based on the information indicated in this chapter can be concluded that Customer demand and preferences of different products and services is a subject of concern for many business areas including the security service industries. However customers’ preferences and choices are not similar from one customer to another. These differences make it hard for the security service industries as for other businesses to meet diverse demands. Thus, the knowledge of customers’ preferences and their choices of products and/or services provided by the companies is one of the most significant characteristic for meeting customers’ demands. Based on the Parasuraman, Zeithaml & Berry the SERVQUAL model, customers access service quality along 5 dimensions: Assurance, Empathy, Reliability, Responsiveness and Tangibles. SERVQUAL is the dominant approach to quantitatively assessing service quality, using a survey approach. And based on customers rating (from a scale of 1 to 5) of expectations and perceptions on these 5 dimensions, companies can calculate the extent of satisfaction of the customers with the services provided. Service quality can be also described as “closing the gap” between expectations and perceptions of service This gaps include; Gap 1: Not Knowing What Customers Expect, Gap 2: Not Selecting the Right Service Design and Standards, Gap 3: Not Delivering to Service Standards, Gap 4: Not Matching Performance to Promises, Gap 5: Not delivering the service as being perceived.

But all models have their advantages and disadvantages including the SERVQUAL model. Among others SEVQUAL offers the following benefits, it can be used on regular basis, it allow firms to classify its customers into different segments, access companies service quality on basis each dimension individually, it can be used in different service sectors and it provide a basic skeleton in order to be adapted for a particular organization., it can be used for various countries and cultural backgrounds, it’s a logical and straightforward concept and the questionnaire is pre-described but also it’s a tested instrument which can be used for benchmarking purposes

Some criticisms have also been send in the direction of the model which are divided in theoretical and operational ones.

Furthermore can be concluded that the SERVQUAL model consist of dependent and independent variable. SERVQUAL independent variables are Tangibility, Assurance, Empathy, Reliability and Responsiveness. These 5 dimensions influence the quality of service, but also the service delivery process which consequently influence the level of customer satisfaction. These 5 variables are the independent variables, while the quality of service, the service delivery process and the level of customer satisfaction are the dependent ones and are influences by the level/extent of these 5 dimensions related to the organization.