Gap Analysis

(SERVQUAL Model)

Session 10
The Gaps
 Customer GAP
Expected
Service

GAP
CUSTOMER
Perceived
Service

MARKET
 CUSTOMER GAP
Customers expectation not matching with
customers perception
customers perception is subjective assessment of
actual service experiences
Customers expectation are the standards of
performance against which service experiences are
compared arising for
Market-controlled
factors (i.e. advertising) or
Non-market-controlled factors (i.e. customer needs)

Ideally expectations and perceptions are identical:

customers perceive that they get what they think they
will and should
 CLOSING CUSTOMER GAP
Practically this gap exits
Provider Gap causes this gap
Provider Gap 1: Not Knowing What Customers Expect
Provider Gap 2: Not Selecting The Right Service Design & Standards
Provider Gap 3: Not Delivering To Service Standards
Provider Gap 4: Not Matching Performance To Promises

Services marketing bridges this gap

Thus closing provider Gap actually closes
Customer Gap
Provider GAP 1

CUSTOMER
Expected
Service

GAP 1

Company
MARKET Perceptions of
Consumer
Expectations
PROVIDER GAP 1:
NOT KNOWING WHAT CUSTOMERS EXPECT
The difference between customer expectations of a service and
company understanding of those expectations.

Inadequate market research orientation

Insufficient marketing research
Research not focused on service quality
Inadequate use of market research

Lack of upward communication

Lack of interaction between management and customers
Insufficient communication between contact (front-line)
employees and mangers (decision-makers)
Too many layers between contact personnel & top mgt
PROVIDER GAP 1:
NOT KNOWING WHAT CUSTOMERS EXPECT
Insufficientrelationship focus
Lack of adequate market segmentation
Focus on transactions rather than relationships
Focus on new customers rather than relationship customers
Lack of prior & after-sales service

Benefits of Exceptional Customer Service

Attracts and keeps customers; adds value
Recovers lost or about-to-be-lost sales

Links customer satisfaction to service quality

Results in a profitable ROI (in customer service)

Performs a major role in the marketing mix

Cost of Losing One Customer
Losing a single customer creates a ripple effect of sales, profits,
and goodwill losses throughout the organization.
Research shows:
A dissatisfied customer tells 11 others who each tell 5 others;
67 people are now involved
17 of those told would have spent $50 weekly and they decide
not to buy from the retailer
Result: 17 x $50 x 52 weeks = $44,200 per year in lost sales
Service research suggests that attracting a new customer costs
6-times more than keeping a current customer.
It costs $19 for a retailer to keep one customer happy
It costs $118 to attract a new customer into the store
Total impact: $118 x 17 = $2,006 to attract 17 new customers
PROVIDER GAP 1:
NOT KNOWING WHAT CUSTOMERS EXPECT
Inadequate Service Recovery
Even the best companies with the best intentions and clear
understanding of their customers expectations sometimes fail!

Itis critical to understand the causes of failing and the effective

service recovery strategies for dealing with inevitable service
failures:
Measure the costs of effective service recovery

Break the silence

Anticipate the needs for recovery

Act fast

Train employees

Empower the front line

Close the loop

Seven Best Practices for Service Quality
Develop a situational service strategy
Integrate customer service throughout every aspect of the
business
Define all points of service and communicate what is
expected of employees
Hold everyone accountable for quality of customer service
Define, communicate, & execute an all-out recovery strategy
Give customer contact personnel the ability (empowering
then) to solve customers problems immediately
Focus on continuous improvement in service
Provider GAP 2

CUSTOMER

MARKET Customer-Driven
Service Designs and
Standards

GAP 2

Company
Perceptions of
Consumer
Part 3 Opener Expectations
PROVIDER GAP 2:
NOT SELECTING THE RIGHT SERVICE DESIGN & STANDARDS
A recurring theme in service companies is difficulty experienced in
translating customers expectations in to service quality specifications

Poor service design

Unsystematic new service development process
Vague, undefined service design
Failure to connect service design to service positioning

Absence of customer-defined standards

Lack of customer-defined service standards
Absence of process management to focus on customer requirements
Absence of formal process for setting service quality goals

Inappropriate physical evidence and servicescape

Lack of efficient tangibles surrounding the service (business cards,
website, equipment..)
Lack of appropriate physical facility
Provider GAP 3

CUSTOMER

Service Delivery
MARKET
GAP 3
Customer-Driven
Service Designs and
Standards
PROVIDER GAP 3:
NOT DELIVERING TO SERVICE STANDARDS
The discrepancy between development of customer driven service
standards and actual service performance by company employees.

A. Problems with the Company:

Deficiencies in human resource policies
Ineffective recruitment
Role ambiguity and role conflict
Poor employee-technology job fit
Inappropriate evaluation and compensation systems
lack of empowerment, perceived control and teamwork

Failure to match supply and demand

Failure to smooth peaks and valleys of demand
Inappropriate customer mix
Over reliance on price to smooth demand
PROVIDER GAP 3:
NOT DELIVERING TO SERVICE STANDARDS

B. Problems with the Customers:

Customers not Fulfilling Roles
Lackof knowledge on their roles & responsibilities
Negatively affecting each-other

C. Problems with the Intermediaries:

Problems with service intermediaries
Channel conflict over objectives & performance
Channel conflict over costs and rewards
Difficulty in controlling quality and consistency
Tension between empowerment and control
 Provider GAP 4

CUSTOMER

External
Service Delivery communications
MARKET GAP 4 to consumers
PROVIDER GAP 4:
NOT MATCHING PERFORMANCE TO PROMISES

The difference between service delivery and the service

providers external communications.

Lack of integrated marketing communications

Tendency to view external communications as independent
Not including interactive marketing in communication plan
Absence of a strong internal marketing program

Ineffective management of customer expectations

Not managing customer expectations through all forms of communication
Absence of strong reference point on pricing
Not adequately educating the customer
PROVIDER GAP 4:
NOT MATCHING PERFORMANCE TO PROMISES

Over promising
Over promising in advertising
Over promising in personal selling
Over promising through physical evidence cues

Inadequate horizontal communications

Insufficient communication between sales and operations.
Insufficient communication between advertising and operations.
Differences in policies and procedures across branches and units
CLOSING PROVIDER GAP 4

Manage
Customer
Expectations

Goal:
Manage Delivery Improve
Service greater than Customer
Promises or equal to Education
promises

Manage
Internal
Marketing
Communication
STRATEGIES TO MATCH SERVICE PROMISE WITH DELIVERY

GOAL: DELIVERY THAT IS GREATER OR EQUAL TO YOUR PROMISE..

A. Manage Customer Expectation

Negotiate unrealistic expectations
Value, and not price alone
Offer choice time vs. cost (If customers understand the trade off,
expectation will be realistic)
Tiered value service offerings Burden of choice on the client (Can identify
which clients are willing to pay a premium for higher service level)

B. Improve Customer Education

Teach Customers to Avoid Peak Demand Periods and Seek Slow Periods
Prepare Customers for the Service Process
Explain customers role in the project
Draft a timetable with the customer that allocates responsibility that both
the service provider and client can realistically stick to
Clarify Expectations after the Sale
STRATEGIES TO MATCH SERVICE PROMISE WITH DELIVERY

C. Manage internal marketing communications

Communicate service process and where employees fit into that process
Align Back Office Personnel with External Customers
Create Cross-Functional Teams
Involve employees in evaluation of the service after it has been delivered

D. Manage Service Promise

Specificity over generality
Document and cite past positive performance statistics
Present vivid story of actual service delivery incident
Customer testimonials
Promise only what is possible
Create advertising that generates talk
Wherever possible offer service guarantees
PULLING IT ALL TOGETHER: CLOSING THE GAPS
The full conceptual model conveys a clear message to managers
wishing to improve the quality of Service
The key to closing the gap between customer expectation and
customer perception is to close provider gaps 1 4 and keep
them closed.
The Gaps model serves as a framework for service
organisations attempting to improve quality service and services
marketing
This model begins where the process of improving service
quality begins: by gaining an understanding of the nature and
extent of the customer gap.
The model ends with closing all four providers gap: by
gaining an understanding customer expectations, valuing that
in designing services, delivering properly and matching
activities with the promises made.
BUT-

Gaps exist!
What we can only do- try to minimize them!!