What Is Service Quality? (With Importance And Dimensions)

Updated 30 September 2022

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Service quality is a measure of a business offering services and meeting various customer requirements and expectations. If the level of an organisation's service quality is high, it means that customers often find satisfaction in its services, which allows the business to possess a competitive advantage over its competitors. Learning about service quality can help you understand why it has an important role in service management and how it leads to customer loyalty. In this article, we answer 'What is service quality?', explain why it is important for organisations and discuss how to improve it successfully.

What Is Service Quality?

The answer to the question, 'What is service quality?' is it is an organisation's ability to fulfil customer requirements, which helps it differentiate itself from its competitors. When a business offers high-quality service, it may increase its profits and improve its reputation in the market. Compared to a product, which is physical in nature, services are intangible and their assessment by customers may be difficult. Its measure is also the attitude or judgements of customers about the quality of the service. Below are some factors of service quality:

Process quality: Also referred to as operational quality, this factor determines the quality of procedures involved in production processes.
Output quality: Also referred to as technical quality, this factor comes after production and determines what customers receive from service providers.
Physical quality: This focuses on the quality of the product that a customer receives or the quality of support for the products.
Interaction quality: This factor involves relationships between customers and service providers where interactions happen via different communication channels.
Organisation quality: The perception or the reputation of an organisation is organisation quality where customers having faith in a brand is important.

Dimensions Of Service Quality

Availability, communication, competencies, humility, trust, security and understanding are some dimensions of service quality, along with some common ones that are:

Reliability

This dimension of an organisation's service quality expands when its services remain reliable and consistent. With this, the organisation offers great customer satisfaction. Reliability focuses on customer interaction, along with the delivery or execution of the goods or services. In terms of reliability, the organisation also features quick and efficient problem resolution at a competitive price. A customer has certain expectations of reliable service when buying a product. When companies offer this service reliability, they help ensure that the service meets customer expectations, which may subsequently lead to business growth.

Tangibility

Tangibility is a company's ability to portray its service quality attractively to its customers. It is a company's functional quality that focuses on creating a good impression on customers. A company's high tangible quality may result from the appearance of its different components, like headquarters or showrooms, outfits of its employees, the marketing materials or the customer service department. For instance, customers may perceive a company's service quality as highly tangible if it has a modern design for its building, which is in a reputable and popular area.

Empathy

This dimension is an organisation's ability to offer its services in a manner that makes the company appear empathetic to its customers and their requirements. When a customer believes that a company truly values them, they are more likely to remain loyal to that company. A company may ensure empathy by offering individual attention to its customers. It also conveys to all its employees that they are necessary for the organisation to understand the specific requirements of the customers and offer the best services accordingly.

Responsiveness

A company that offers services promptly to its customers can often ensure customer loyalty and improved business growth. This dimension of service quality focuses on acknowledging, analysing and quickly replying to customer requests, feedback, queries and issues. Responsiveness conveys to customers that the company acknowledges their feedback.

Assurance

Assurance is when customers have confidence in the services of an organisation. It has an important role in the services in which customers may not always have sufficient expertise. This means that there is an element of trust that customers possess in the servicing organisation's ability to deliver. Organisations with a growth mindset tell their employees to make efforts that help them gain the trust of their customers, allowing them to achieve a higher level of customer retention.

Importance Of High Service Quality

Here are a few reasons that explain why high service quality is important to an organisation:

It increases sales. A company that offers high service quality has customers who prefer to do business with it, allowing the company to have repeat customers and boost its sales.
It reduces marketing costs. A company may use its funds to attract and gain new customers, but it is typically less expensive when it retains its existing ones by offering high-quality services.
It attracts motivated employees. If a company has high service quality, motivated and skilled professionals may prefer working with that company to find growth in their career.
It offers repeat business. When customers know that a company's customer service department is always willing to resolve their issues quickly, they are more likely to buy from that company again in the future.
It eliminates customers' doubts. A customer may feel hesitant before purchasing a particular product, but a company's high service quality may convince them to make the purchase because the customer knows they can trust the company to resolve their issues if they find any.

How To Improve Service Quality?

Below are some steps an organisation may follow to improve its service quality:

1. Understand the customers' requirements

During an issue with a product, a customer may not know the exact problem. In such situations, an organisation that intends to deliver excellent customer service often focuses on understanding the exact issue of their customers based on which it offers a solution. This process involves actively listening to customers and patiently offering problem resolution.

2. Treat customers with respect

There may be times when a customer makes unreasonable requests. In situations like these, a company that remains respectful towards its customers shows its commitment to its business. This courtesy makes customers feel like the company is empathetic to their problems. An organisation may ensure that its customer service department employees understand how to pacify difficult customers to improve their service quality and reputation.

3. Utilise customer feedback to improve

Accepting feedback from customers is a great way for a business to assess its service quality. Through customer feedback, a business recognises its areas for improvement. When companies acknowledge and implement the suggestions, it shows customers they value their views and may want to modify services to best suit the requirements of their customers. Apart from customer satisfaction, feedback may also improve a company's business functions.

4. Offer a robust customer interaction system

A company that deploys a well-implemented customer interaction system is often better able to register grievances and suggestions. Such a system can enhance business efficiency by processing customer requests quickly and easily. This allows companies to offer a splendid customer experience. All these factors together contribute to customers' perception of the company's service quality.

5. Ensure employees are familiar with company services

A company may ensure that all the employees who interact with customers possess extensive knowledge regarding the company's services. This allows the entire customer service department to explain the various services of the company to customers coherently. This also may enhance the customers' perception of the organisation's ability to offer quality services.

Levels Of Customer Service

Here are the four levels that a business commonly employs to categorise the quality of customer service:

Unsatisfactory

When an organisation is unable to meet customer expectations, its customer service becomes unsatisfactory. Many factors contribute to unsatisfactory customer service, like inefficient customer interactions or customer service representatives taking longer than usual to help customers with their issues. Unsatisfactory service quality is also an outcome of companies leaving customer queries unaddressed, which can result in a decline in its customers, sales and revenue.

Meeting expectations of customers

An organisation may ensure business stability by meeting customer expectations. When customers are not consistently registering complaints, it means that the business is successfully meeting its customer requirements. A business may strive to provide excellent customer service to build a loyal customer base. This makes it important for a business to deliver and improve its service quality consistently to outperform its competitors and retain its customers.

Outstanding customer service

A business taking additional measures to offer high-level service quality may help deliver outstanding customer service. Companies that offer such services already often have loyal customers. Companies that show customers they value them can also offer their customers various benefits apart from high service quality, like discounts, early access to sales, rewards and special offers.

Exceeding expectations of customers

A company may exceed customer expectations when it offers them a memorable experience. To offer such an experience, companies conduct an in-depth analysis of their target audience to understand their customers' complete buying process. The objective of this level is to offer continued exceptional service quality to customers by utilising every interaction with them.