Service Performance Gap - Jyske Bank - Case Study Example

Topic: MARK270 Case Study Report Name: ID no: Unit code and name: Lecturer name: Assignment No: Due Date: Executive Summary This report looks into the gap model of service quality as applied in the case study of Jyske Bank. The report looks into the four provider gaps in the service quality service delivery. The listening gap is first analyzed in relation to Jyske Bank. This gap is concerned with knowing the customer expectation before offering the services. The bank made it easy to contact and consult their customers through the use of IT and making efforts to know the customers as individuals. The bank also redesigned their branches to facilitate customer interactions with Bank. The second Gap looked at is the designs and standards gap. This is concerned with how the services are measuring to customers expectations. The Jyske bank looked at the customers’ standards and their feedback on the services. The Bank made improvements on the space where they offered their services and on loan services. Through this, it was possible to close this gap. The third gap looked at is service performance Gap. This gap entails delivering the service on the way it was designed. Jyske Bank closed this gap by hiring employees who were able to deliver the service unaltered. This was made possible by the human resource department hiring and training procedures, explaining to the customers their roles and use of information technology. The last gap that was used by the bank is the communication gap. The communication given to the customers matched what the bank delivered. The bank advertised only after making sure they could deliver the service. Contents Name: 1 ID no: 1 Unit code and name: 1 Lecturer name: 1 Assignment No: 1 Due Date: 1 Executive Summary 2 Contents 3 Gap 1: The Listening Gap 4 Gap 2- The Designs and standards Gap 5 Gap 3- the service performance gap 6 Gap 4- The Communication Gap 7 References 9 Gap 1: The Listening Gap The Gaps model of service quality is one of frameworks that have been developed to cater for excellent services to the customers. This model was introduced in the 1985 and since then it has been used to help companies formulate and deliver quality services to their customers. The model has four provider gaps. The first is the listening gap. This refers to the difference between what the customers expect on the services given and the level of understanding in the company about the customer expectation (Mick & Fournier, 2001). For a firm to accurately meet what the customers need, they need to know their expectations. Jyske Bank was able to cross this gap and meet the customers’ demands. This was achieved through making it easier for the customers to interact with managers. The interactions were made easier by redesigning the branches and making their customers feel equal to the employees. The structured branches have level chairs where the customer can directly talk to the banker in same level. The bank offered more personalized servicers making the customers feel more at home. This made it possible for the customers to tell the bank what they expected in an easy manner. By knowing the customers as individuals, it becomes easier to solve their problems and identify with them. The expectations for the customers must be assessed adequately before making or developing new services by the industry. To close this gap effectively, the service provider needs to know and address the customer needs so that failure of the service is eliminated (Zeithaml, Bitner & Gremler, 2009). Using technology, it is possible to influence the provider gap 1 (Mick & Fournier, 2001). This is by improving the ways in which the industry listens to the customers. This has been made possible through use of internet which has replaced the traditional methods of listening to customers. Through use of internet, the company can get more immediate feedback from the customer and also enhanced data analyzing speeds. The Jyske bank has facilitated the use of IT in the interactions between the account team members and customers. This meant that the customers had enhanced speed of interaction with the bank. The advantage of getting a quick method of interaction is that the service provider gets immediate feedback. Jyske bank has also been able to maintain customer privacy. This has been achieved by maintaining the right balance in the collected customer information to use in building relationships and invading the customer personal details in undesirable ways. Using the application form during the loan application, the customer’s expectation based on price and terms were put in it. This helped in a great way in knowing what they expected as well whether it was in line with bank requirements. Gap 2- The Designs and standards Gap This gap is involved in making the customers expectations into goods and services (Mick & Fournier, 2001). This gap looks into how the services are measuring to the customers expectations. To close this gap, Jyske Bank has to look into various strategies. The first strategy was use of well defined development of new service and innovation process for the products. Jyske Bank had to differentiate how it offered services to its customers. In order to deliver in the competitive positioning, the bank made tangible changes in the service delivery system. Each customer was assigned with a branch employee as a point of contact. This was a strategy formulation which was handy before implementation. The implementation of new service delivery requires careful planning. This was evident in implementing the new service. As time went on, the managers noted that the service was not working well. The customers were having problems with interacting with the service provider. The managers’ commitment was firm to deliver personalized services. The solution was found through use of teams of bankers who could talk with customers. This involved the second strategy that is concerned with following on the customers experience from the service (Zeithaml, Bitner & Gremler, 2009). The customer physical space where the service is offered was also looked at. Having these operational factors designed according to the customer perspective formed an important part in closing this gap. In the Jyske Bank, the space was improved in a great way. This was done through branch design; the bank had to spend more than DKK 750 million in the physical redesigning of the branches. The new branches looked great and welcoming to customers. The attractive effects were accomplished through use of modern and high quality materials. The new design made it possible for the customers to interact directly with the customers. The customers were able to get services in the comfort of the bank (Zeithaml, Bitner & Gremler, 2009). Another strategy for closing this gap is realizing and using the customer defined standards to measure the service operation (Zeithaml, Bitner & Gremler, 2009). When the industry fails to use standards, the service quality as expected by the customer is not met. Looking at how loans were given by the bank, the bank had realized what the customers’ standards were. For satisfaction, the customers needed to have a feeling that they owned the loan. The customer standards were having a loan that had as few processes as possible. This was accomplished by the company making the loan process to be simple and easy to obtain. This was a way of making the bank services more customers oriented than company. The designing and standards gap was also closed through use of technology. Though the company maintained face to face operations, the technology enabled services were implemented. These helped the customers to get services they needed fast and efficient. Technology has also helped in measuring the customer expectations in an efficient manner. Gap 3- the service performance gap The industry has to deliver the service in the way it was designed (Mick & Fournier, 2001). To close this gap, the service delivery firm has to make sure that the service delivered is according the customer standards and design. Jyske bank closed this gap by making sure that the services they gave were tailored to what the customers expected. This was achieved through three main strategies. The first strategy involved making sure that the human resource department was aligned in making excellent service delivery. All the employees hired were willing to deliver the service as it was designed by the company. To achieve this, the company made use of hiring the right employees and developing them to deliver outstanding services. The bank in its hiring procedure looked for more than the banking skills. To get employees who could deliver the untampered services, social skills were of paramount interest. The viable employees were supposed to be capable of fitting into the company service mindedness values. These values were; openness and genuine interest in other people. The employees were tested in their engagement with the bank before getting employed. Through these efforts, the human resource department could get the right employees to deliver the services. When a company gets the right employees, the need for training and development is of great importance (Verhoef, Antonides & de Hoog, 2004).This happened in Jyske Bank as the employees were trained on the skills needed in their duties. Individual development was given the outmost importance. The personal development was taken as the employees’ initiative. To maintain this workforce, use of incentives is one of the methods used (Rust, Moorman & Dickson, 2002).The monetary incentives offered by the bank were few. These included use of one time payments, annual rises and stock. The one time payments were awarded to individuals who did exceptionally well in their duties. Raise incentives were given annually and became part of the employee salary. A second strategy that was employed was by defining the customers’ role and making sure they are assisted in understanding it. The Bank closed this gap by communicating to the customers on what their role entails. After making sure the customer was aware of the role, the Bank embarked in facilitating it. The customers role was utilizing the bank services and the bank had to make the services achievable and of high quality. The customers were given the same class as the Bank employees and making sure their needs were met. The third strategy in meeting this gap was use of technology effectively to help in performance (Parasuraman, Zeithaml & Malhotra, 2005). The technology that could make the employees efforts easier were utilized in the bank. The technology helped the customers in becoming more elite and also helpful in the bank to achieve quality services. The bank made use of information technology system that helped in measuring the profitability. This helped a lot in coming up with results in a short time and also reducing the work of employees in computation. Technology was also used effectively in other services that were offered including credit. Through use of technology, the bank made the customer contact with employee more efficient and also empowering the customers. Gap 4- The Communication Gap The service communication should be a match to what is delivered by the industry (Mick & Fournier, 2001). This gap looks into the disparity between what the company delivers in its services and what is communicated externally to the customers. Communication is effected by use of price, advertising and other relevant forms of communications. Jyske Bank was able to cross the communication gap by using three strategies. The first strategy was concerned with integrated marketing of services. This involved making sure that all messages and signals that were passed about the services were according to the customer’s expectations and what was delivered. The bank made sure they could deliver the services before thy advertised them. This meant that the Bank did not spend much on advertising until it was sure it could deliver what it advertised. By using the customer experience on their products, it was possible to advertise them. This made sure that the bank was already aware of the product outcome before it was advertised. Jyske bank utilized the second strategy in communication. The strategy was concerned with making sure that the customer’s expectations were handled in an effective manner by the bank’s employees. The customer was kept informed on any changes in service delivery to make sure that the expectations matched any change that could occur in nature of service. This was evident in times when there was change in services. The changes involved price increase or discontinuation of service (Bitner, Ostrom & Morgan, 2008). The final strategy that the bank utilized to cross the communication gap was developing internal communication to aid the customer in getting consistent message from in the time for sales and service delivery. The sales and marketing done did not over market the products. Excessive promotional services can lead to failure if the product does not deliver (Bitner, 2001). The bank utilized vertical communication strategy which helped the customer to get accurate information from the employees. The Bank says that most of the advertising was by the word of mouth from the customer satisfaction. This helped other customers to gain the unbiased or exaggerated information. The bank also had invested in information technology to assist in making effective communication with the customers. The information technology channels helped in giving consistent message to all the employees in the bank. The technology led to ease in communication between the customer and the firm as well as among the employees. Information technology development in communication was one of the Jyske Bank strong points as seen in the IT programs designed to help in ease of communicating between the account team members and the customers. From Jyske case study, it’s evident that for the service provider to cross the customer gap, all the four constituent gaps must be well understood and performed. The impact of information technology in all the four gaps is evident. Gap model is adaptable even in today’s dynamic business environment as has been proved in the case study analysis (Barber & Strack, 2005). The gap model is a core ingredient of a successful service industry as have been demonstrated. Jyske Bank has remained in leadership through application of the Gap model effectively. The bank was able to close the customer Gap by closing all the four provider gaps. References Barber, F. and Strack, R. 2005, ‘The Surprising Economics of a ‘People Business’,’ Harvard Business Review, vol. 83, no. 6, pp. 80–91. Bitner, M. J. 2001, ‘Service and Technology: Opportunities and Paradoxes,’ Managing Service Quality, vol.11, no. 6, pp. 375-379. Bitner, M. J., Ostrom, A. L. and Morgan, F. N. 2008, ‘Service Blueprinting: A Practical Technique for Service Innovation,’ California Management Review, spring 2008, pp. 66- 94. Mick, D. G. and Fournier, S. 2001, ‘Paradoxes of Technology: Consumer Cognizance, Emotions, and Coping Strategies,’ Journal of Consumer Research, vol. 25, no. 9, pp.123-47. Parasuraman, A., Zeithaml, V. A. and Malhotra, A. 2005, ‘E-S-QUAL: A Multiple-Item Scale for Assessing Electronic Service Quality,’ Journal of Service Research, vol. 7, no.2, pp. 213-233. Rust, R. T., Moorman, C. and Dickson, P. R. 2002, ‘Getting a Return on Quality: Revenue Expansion, Cost Reduction, or Both?’ Journal of Marketing, vol. 66, no.10, pp. 7-24. Verhoef, P. C., Antonides, G. and de Hoog, A. N. 2004, ‘Service Encounters as a Sequence of Events: The Importance of Peak Experiences,’ Journal of Service Research, vol. 7, no. 8, pp. 53-64. Zeithaml, V. A., Bitner, M. J. and Gremler, D. D. 2009, Services Marketing: Integrating Customer Focus Across the Firm, 5th edition, New York: McGraw-Hill. Read More