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From Dr. Scott Sampson's Understanding Services Businesses Book (click for table of contents)
SBP 3d: Difficulty in Measuring Output⇐Prior —[in Unit 3: Services Fundamentals: Execution]—

SBP 3e: Difficulty in Maintaining Quality

With services, quality measurement tends to be subjective and difficult to scale. The standards by which quality is defined are often ambiguous. These unique specifications of quality, coupled with labor-intensiveness and inconsistent customer inputs, make it difficult to provide consistent quality.

Why it occurs

This principle occurs because each customer may present different inputs-of varying-quality to the process. Customers also specify different quality measurement standards, making the measurement of quality difficult.


Quality has many definitions, although almost all capture some idea of “goodness.” What is “good” production? Who says what is “good” and what is “not good?”

In manufacturing processes, the ultimate customer is often not identified until well after the production is complete. Therefore, the manufacturer has to estimate what customers will deem “good” and what they will consider “not good.” Market researchers survey customers to determine what these designations might be, and give that information to product engineers, who interpret survey results into product specifications. These specifications are generally numerical in nature, based on objective quality measurements.

Service businesses have both the luxury and the challenge of having the customer involved in the quality measurement process. They do not have to estimate what the customer deems as “good” or “not good,” but can directly ask the customer, if they choose to do so. The problem is that each customer may have a different scale for comparing good and not good, as well as unique standards by which the service is evaluated! Service that may be more than good for one customer may be worse than bad for another. Every customer may represent a unique quality measurement system! (These ideas will be discussed in more detail in the Measuring Service Quality and Productivity Unit.)

Even if we have a reliable and valid measure of service quality, achieving good quality can still be a difficult task. The best service processes and the best employees can only do so much if customers provide inputs of low quality. Therefore, much of the quality assurance process in service businesses involves managing customer inputs and customer involvement. (There will be more discussion on this in the Challenges in Delivering Service Quality Unit.)

How it effects decisions

Service providers need to decide when and how to measure quality in the service process. Some measures may be objective, relying on service standards set by the company. Other measures might be subjective, based on customer evaluations of the service. Too frequent measurement can be a burden on employees and customers, but too little measurement can provide insufficient information.

Service providers also need to determine how best to approach the quality of customer-provided inputs. Too little control of customer inputs can lead to unacceptable quality of production, and too much control can be an annoyance to customers.

What to do about it

Since quality measurement in services is less than an exact science, it is often good to improve measurement validity by using multiple measures. The service provider may base the service on internal standards which are justified and updated by quality assessments given from customers. Detailed information about service quality measurement techniques will be presented in the Measuring Service Quality and Productivity Unit. Issues about service quality assurance will be discussed in the Challenges in Delivering Service Quality Unit.

For example

How can a bank measure quality? Some measures are quite objective, such as whether transactions balance or are accurately recorded. Others are extremely subjective, such as the cordiality of loan officers and other employees. Cordiality is extremely difficult to measure, and measurements are subject to customers' individual attitudes. What about the measure of wait time at the teller windows? One may think that is an objective measure, since it can be accurately recorded with a stop watch. However, the actual wait time is much less important to service quality than the customers' perceptions and acceptance of the wait times, which is more difficult to measure.

How can a law firm measure quality? A seemingly objective measure would be the number of cases won (for trial lawyers). However, heterogeneous production and variable customer inputs (i.e. cases) probably has as much or more of an influence on case winning than the “quality” of the legal service. (At least I would hope that would be the case, although it probably is not in many instances.) In fact, even poor quality lawyers win cases in which the client is clearly in the right.

This is similar to measuring quality of investment banks, who often publish statistics about their ability to generate a financial return over some past time period. U.S. law requires disclosure that “past performance does not guarantee future earnings,” or something like that. Poor investment bankers can be lucky picking stocks, and good investment bankers can have portfolios go bad. In fact, even a “quality” measure of a 10 percent return is relative-is 10 percent a good or a bad return? Most would say that depends on what alternate investments are doing.

For each of the above examples, the fact that it is difficult to measure quality makes it more difficult to manage quality. Further, quality assurance may be influenced by the quality of customer inputs: Banks require correct and legible information on forms and checks. Law firms prefer cases with quality evidence. And investment bankers need customers' investment funds and preference information in a timely manner.

My airline example


A 1996 Southwest Airlines advertisement proclaims that they won the “Triple Crown,” which is that they were #1 in On-time performance, #1 in Baggage Handling, and #1 in Customer Satisfaction. What exactly is “on-time” performance? What denotes good baggage handling? How is customer satisfaction measured? And who defined these measures as such? Coming up with such measures is easier said than done.

Think about how much customers can influence on-time performance. Customers who violate procedures by being late, not checking in, or having too many carry-on bags can make it difficult to always have planes depart on time. One alternative is to not let such passengers on the plane, which can have a negative effect on those customers' perceptions of “quality.”

How manufacturing differs

With manufacturing, quality measurements tend to be relatively standard for a given product. Maintaining quality in a manufacturing process is often considered equal with meeting product design standards.

Analysis questions

  1. What product features denote quality?
  2. How would we know if we were providing quality?
  3. How are we able to identify when quality is a problem? Can we measure quality problems before they come to the attention of customers? How or why not?
  4. What are some methods used to assure quality?
  5. What are the issues that may tend to undermine quality assurance?

Application exercise

Imagine that your service company wants to implement a system which rewards individual employee based on their ability to provide quality. Describe how you would design such a system. What would the quality measures be? How might these quality measures by tied into rewards or compensation? Would they be a fair basis for allocating employee bonuses? How or why not? What are factors outside of the control of employees that would hinder quality assurance? In other words, what are ways that employees might do good work yet achieve results of unacceptable quality? Give a few examples.

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