Explain differentiation, and Maintaining & Improving service quality for services

Discuss dealing with competition in case of service offerings.

Differentiation in Service –
A customer can travel by any airline basis the lowest airline fare. Since the basic need is travel, the customer needs to check a suitable time, book a flight and reach his/ her destination. Instead of providing lowest fares possible to gain a competitive edge, organisations try to differentiate their offering. This is known as differentiation – Doing things differently. An organisation can differentiate its offering, its delivery, and brand image and communication. This way the organisations avoid price wars in the industry.

Offering – How different the offering of one organisation is from the other makes a difference. The effort should be to have uniqueness in the service offering – Doing things differently. A bank like HDFC offers its customers a dedicated personal relationship manager for its long tie cstomers. The customer doesn’t needs to go to the bank for most of the things or call the customer service number. The customer can directly call the personal relationship manager and gets the issues resolved. Similarly, a bank can offer additional services like loan at lower interest rate, etc. for a customer who opens an account. An organisation constantly needs to work with the regular customers to innovate itself so that it can stay ahead of competition.

Effective Delivery – consider a scenario wherein you have to fill a 20 page form and move from one counter to another to open a savings account in a bank. Such a delivery would definitely leave a customer disappointed thinking about the efficiency and effectiveness of the organisation.
Factors like personal touch, immediate delivery or delivery as promised, attitude of the people and quality of service all go a long way in making a business successful. Domino’s commitment on delivering the product in 30 minutes or giving the product for free shows their commitment to high quality in delivery operations. So the organisation should always be ready in resolving a delay or an emergency in delivery of a service. When the writer of this topic did not receive a courier on time from Blue Dart, he received a call from one of the managers from the company apologising for the delay, and an arrangement was made to deliver the courier during non-working hours. For such an excellent attitude towards customers, the customer will seldom think about switching to another organisation for the same service.

Brand Image and communication – An organisation can create its band logos and symbols that confer an image of high quality and professionalism. Similarly communication forms an integral part of differentiating an offering from its competitors. The message as well as selecting the right message vehicle or tool highlighting the success stories of the brand influence buyers. For example, McDonald’s, FedEx, Blue Star are international and well recognised brands.

Maintaining and Improving service quality –
An organisation has two ways in maintaining and improving service quality.
Internal setup– The organisation should set systems in place internally to constantly monitor and improve on the service. These can be done in different ways –

i) Setting high standards – The organisation should build a culture for constant improvement in its quality of service as well as its delivery. Capital One bank had always strived to answer the customer emails within hours of being received. From a period of replying within 24 hours, it succeeded in replying within 4-5 hours without compromising on quality.

ii) Conducting surveys – The data gathered through surveys and questionnaires helps analyse the needs and wants of the target audience. This way the organisation can make changes to the offering or launch a new offering basis the customer requirements and demand.

iii) Gap analysis – Identifying various gaps in service delivery. The management may have certain perception about a service quality which may be not congruent to customer expectation, delivery, etc. These gaps should be identified should be used in making service improvements.

iv) Motivating and training employees – a study a found that a satisfied employee working for an organisation helps make business grow. A well trained and loyal employee results in getting loyal customers which ensures profitability for the business.

External inputs – The organisation may receive customer complaints through employees or other mechanisms. A successful organisation always gives ample opportunities for customers to share their inputs. The channel of communication can be directly with the managerial staff also. For example, Blue Dart has email addresses given on their website, wherein a customer can complain with the top management in case of no resolution to an issue.

Similarly, an audit can be done regularly to monitor the set standards in interacting with customers. For example, emails communication or telephonic conversation with customers can be audited by the quality team to ensure high quality of service and regular coaching of the employees. The customer satisfaction scores or Voice of customer (VOC) measurements help in understanding the customer’s needs and expectations.