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The Gaps Model of Service Quality and

Customer Relationships in A Digital

Marketing Context

Author: Adam Guerguis

November 2, 2018

Contents

Introduction………………………………………………………………………………………………………………………………… 3

The gap model of service quality ……………………………………………………………………………………………….. 3

Customer Relationship Management ……………………………………………………………………………………………. 6

Relationship Marketing (RM) ……………………………………………………………………………………………………. 7

The role of the Community Manager ……………………………………………………………………………………… 8

Engagement Marketing and co-creating value ………………………………………………………………………… 8

The connections between the gap model and customer relationships ……………………………………………. 10

Customer Loyalty …………………………………………………………………………………………………………………… 10

Solutions to increase service quality and close the gaps ……………………………………………………………….. 11

Services Blueprinting ………………………………………………………………………………………………………….. 11

Embracing the Service-Profit Chain concept ………………………………………………………………………….. 12

Using technology to influence the listening gap ………………………………………………………………………… 12

Online research and cyber surveys……………………………………………………………………………………….. 12

Machine Learning, Artificial Intelligence, and Natural Language Processing …………………………….. 13

Using technology to close the design and standards gap……………………………………………………………. 15

Electronic Customer Relationship Management (eCRM) ………………………………………………………… 16

Real-time Service Monitoring ………………………………………………………………………………………………. 16

Websites A/B testing and Heatmaps ……………………………………………………………………………………. 16

Empowering employees and customers to close the service performance gap ……………………………. 17

Tools and examples to close the communication Gap …………………………..…………………………………… 18

Bibliography ……………………………………………………………………………………………………………………………… 19

Introduction

Studies have shown that it is cheaper to retain existing customers than to getting new ones. It is

also proven than the profitability of retaining only 5% of customers through a good customer

service can lead to an increase in profits between 25% to 95% (Reichheld & Schefter, 2000).

However, only 20% of companies track customer retention and listen to their customers to

understand their pain points and learn more about their experience (Reichheld & Schefter, 2000).

In a very competitive environment, service quality has become an essential ingredient to help

brands remain profitable. That lead many companies to regard their core business from a

relationship marketing (RM) perspective. Those companies have learned that building healthy,

meaningful, and growing relationships with their customers is their only way to grow and be

profitable.

Some confuse service with products and good manners. But services are not physical objects that

can be owned. They are experiences that people feel and remember (Shostack, 1984). Examples

are hotel stays, flying with airline companies, telecommunications, etc. Services represent about

80 percent of the US GDP and a growing percentage of the GDPs of every country in the world

(Bitner, et al., 2008).

The gap model of service quality

The gap model is a marketing method to analyse perception in relation to expectations. This

model, developed by Parasuraman, Zeithaml, and Berry (1985) proposes five gap types that

appear when trying to measure service quality (Parasuraman, et al., 1985). The five gaps

visualised in this model (Figure 1) are:

• Gap 1: Difference between consumers’ expectations regarding service provision and the

organization’s management perceptions of those expectations, i.e. not knowing what

consumers expect (Seth, et al., 2005; GÂRDAN & GÂRDAN, 2014).

• Gap 2: Difference between the perception of managers regarding consumers’

expectations and the service quality specifications, i.e. improper internal organization

quality standards (Seth, et al., 2005; GÂRDAN & GÂRDAN, 2014).

• Gap 3: The discrepancy between service quality specifications (internal standards

regarding service quality) and delivered service quality, i.e. the service performance gap

(Seth, et al., 2005; GÂRDAN & GÂRDAN, 2014).

• Gap 4: The discrepancy between service delivery process quality and how the

organization communicates to its consumers about service delivery, i.e. did promises

match delivery? (Seth, et al., 2005; GÂRDAN & GÂRDAN, 2014).

• Gap 5: The difference between the service the consumers are expecting to receive and

their perception of the service they have actually gotten (Seth, et al., 2005; GÂRDAN &

GÂRDAN, 2014).

Figure 1: Gap Model of Service quality (Parasuraman, et al., 1985)

Thanks to more research as well as criticism, the gap model was evolved many times. In 1988,

Parasuraman and his team refined their gap model to add the SERVQUAL scale to measure

consumers’ perception of service quality (Parasuraman, et al., 1988) and it was named the

extended model of service quality. That model focuses on five dimensions to perceive service

quality: reliability, responsiveness, tangibles, assurance (communication, competence,

credibility, courtesy, and security) and empathy (Knowing the customers) (Seth, et al., 2005).

SERVQUAL was revised again in 1991 (Parasuraman, et al., 1991) and in 1994 (Parasuraman, et

al., 1994).

Even with all the enhancements to the SERVQUAL scale, it is still a very difficult task and almost

impossible to find a universal way to measure customers’ satisfaction towards the services that

organizations provide (Plăiaş, et al., 2012) due to the services’ characteristics “intangibility,

inseparability, perishability and variability” (GÂRDAN & GÂRDAN, 2014).

It is also noticed for some organizations, like healthcare, how service quality perception can be

severely affected by external factors. According to GÂRDAN (2014), “the perception regarding

the quality of the [healthcare organization] service will have a more stronger bound with

consumption decision… if the consumers are not affected by other factors like: the prescribers,

mandatory treatment scheme, lack of alternative resources, physical localization of the services

etc.” (GÂRDAN & GÂRDAN, 2014).

Customer Relationship Management

Marketing is geared towards “making promises through value proposition, enabling the

fulfilment of individual expectations created by such promises and fulfilling such expectations

through support to customers’ value-generating processes, thereby supporting value creation in

the firm’s as well as its customers’ and other stakeholders’ processes.” (Grönroos, 2006).

For almost any organization to establish a healthy and successful relationship with its customers

it needs to understand their perceptions. And for this to happen, the organization needs to help

and train its staff to be able to know what their customer needs are and what they are expecting

from the organization (Broussard, 2000).

However, some top executives in organizations have negative views about marketing due its lack

of adaptability towards the shifting marketing mix and customer needs changes (Day &

Montgomery, 1999).

Evert Gummesson (2004) proved that for organizations to be successful in their customer

relationship management activities, they need to be able to successfully collect consumers

personal data (Gummesson, 2004). Now with the implementation of new regulations about data

privacy like GDPR, personal data collection and management have become much harder for many

organizations. Thanks to different technology advancements, it is still possible for companies to

have a personal relationship with their customers without violating any data privacy laws.

Relationship Marketing (RM)