Service efficiency and service quality have often been considered two different dimensions that don’t work well together. As service quality improves the efficiency of service moves downward. Likewise, as service quality moves down efficiency can move upwards. Conventional wisdom may not be accurate. A study by Talluri, Kim and Schoeherr (2013) used both transactional and survey data to show how service quality and efficiency can work together.
What they did find was that service efficiency should be improved through the development of higher levels of technology before moving into service demand quality. Without efficiency in place quality becomes more expensive. Focusing on efficiency and then on quality appears to push growth higher.
Efficiency allows for the use of less resources to service customer’s needs. As core service functions are defined the processes and procedures streamline to cut out any waste. There may not be a lot of options in the types of services offered to customers but there is also less waste in the overall process.
Customers like a level of customization when handling and solving their problems. If they have an issue then general flexibility in dealing with that issue is beneficial. However, this customization reduces the overall efficiency of the organization. Customers may be happy but they are soaking too many resources to maintain profitability.
Developing customer service should be streamlined to meet certain organizational objectives. Once the efficient aspect of customer service has been covered it is possible to expand the range of service to raise overall satisfaction. Like a cycle the process of streamlining and then offering enough flexibility to meet customer needs is important.
The report helps administrators put in perspective the tradeoffs of efficiency and quality. It also helps them understand that these concepts are not necessarily mutually exclusive. It is possible to improve on efficiency and then work on offering enough flexibility within defined limits to serve customers adequately. When done together it can save the company money and improve upon customer satisfaction.
Talluri, S., Myung, K. & Schoenherr, T. (2013). The relationship between operating efficiency and service quality: are they compatible? International Journal of Production Research, 51 (8).