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How are quality related characteristics different for products and services?  Quality can mean free of deficiencies or the characteristics that satisfy customer needs. In a product focused business your product has a measureable set of characteristics such as being: 

  • reliable, meaning it doesn’t break down often or at all; 
  • serviceable, easy to repair; and 
  • durable, lasting a long time.

We are very used to hearing about product quality.  These characteristics however do not directly apply in a service focused business, i.e., banking, selling insurance or financial advice.  And some businesses like restaurants are a mix of both product and service, i.e .the product/food must be good and the service must be excellent. 

Quality related service characteristics include 

  • Reliability - your service is consistently performed well, your processes are repeatable by all employees each and every time 
  • Tangibles - equipment, personnel, location of the service performed all support customer satisfaction with your service
  • Responsiveness - prompt willingness to give good service by all employees  
  • Assurance - courteous, trustworthy, and knowledgeable providers of the service
  • Empathy - satisfactory problem resolution

So in a service focused business how does quality/customer satisfaction link to profit?

We will use a chain metaphor and see that a chain of events, links, leads a quality service organization to profit and growth. 

  • “The first step in the service–profit chain is internal service quality, or treatment employees receive from a company’s internal service providers (i.e., management, human resources, etc.). When employees are given responsibility and authority, they are more satisfied with their jobs. 
  • In turn, satisfied employees are more apt to respect customers and treat them well. Treating customers well, the hallmark of high-quality service, leads to customer satisfaction and loyalty. 
  • When customers continually come back to do business with a service provider, this leads to long-term profits and growth.”

If your business is a service provider and you wish to improve customer satisfaction and loyalty think about how to implement the quality related service characteristics discussed above.

Reference: The information in this article is discussed in depth in Chapter 18 of the textbook: MGMT 12; Williams, 2022, 2019, 12th  Edition, South-Western Cengage Learning, Boston, MA.

About the Author(s)

Jim Abbey

I can assist you with a range of topics such as the automotive industry, government contracting, tech start-ups, event management, web design, and teaching. As an entrepreneur I founded and managed a small business for ten years that supplied technology products for people with special needs. My work in the automotive industry included supplying software for factory automation and testing systems...

Key Topics

QUALITY in a Service Business