How was the Servqual index that you developed used to assess levels of service quality in two industries?
Banking and e-commerce were the two verticals we looked at for a pilot project. We looked at customers’ expectations and the five dimensions of Servqual. We did a lot of groundwork to modify the original Servqual questions to be generalisable to different verticals. And then we came up with 15 general questions which, with tweaking, can be used in many verticals. Then we tested it with five major companies in e-commerce and five major retail banking sectors. For that we picked two metro areas, Bangalore and Mumbai, and we asked about 1,000 respondents across the two different sectors and across companies. That was the basic sampling. And then we got results for each of the companies as well as sectors as a whole. The index itself is a single score on a scale of 0-100. We also took into account the relative importance of the 5 Servqual attributes to come up with the end result.
So, what kind of questions did you pose to the banks and e-comm companies?
No, these are the questions to the bank customers and consumers of online companies. The banks included SBI, Punjab National Bank, ICICI among the five big banks. The online companies were Flipkart, Amazon, BigBasket, Makemytrip and SBI Online. So, we had SBI in both sectors, the physical bank and online as well. There were three questions pertaining to each of the five Servqual attributes. The wording of the questions varied slightly depending on whether we were looking at banking or e-commerce. For example, if you take bank ‘tangibles’ they pertain to the appearance of the facility, the appearance of personnel in the bank branches, while the equivalent for e-commerce would be the appearance of the website and ease of navigation.
Do each of these attributes have different weightages?
Yes, glad you are asking the question because in the US, where we have used this Servqual approach quite a bit, we find distinct differences across the five attributes. Reliability gets about 30 per cent of the allocation, the tangibles get about 10-15 per cent, and the others fall in between.
In the India results, what we consistently find is that the relative importance of attributes are remarkably similar, around 18-22 per cent. So one possible reason is in India the service industry is in a very early stage now, particularly with all the technology and start-ups coming up. Therefore, it is not mature enough. In the US, the sectors are mature and the customers have formed their opinions. It is tangible. Everyone looks nice, all the stores look nice. So it is not that important. But here, from one bank branch to the next, there is a lot of variation. So the possible explanation is that it hasn't reached the developed maturity.
So what will be the takeaways for a bank which has got a middling Servqual score?
The topline takeaway will be how it’s doing compared to its four competitors that were included in the study. That will be the natural interest. Another question will be why is that so? For that we can actually go into the data and dig a little deeper to identify the strong and weak points of the 15 things we measured. So there will be diagnostic information that can be extracted from the specific data we combined to produce the index. And that, in turn, may lead to some further investigation that the company might want to commission on its own.
So the entity that does this study was established by IFIM Business School?
Yes, the organisation is called the Academy of Indian Marketing (AIM) and within that the entity is called AIM Parasuraman Centre for Service Excellence. It has launched the pilot index results and one of the main goals of the Centre is to implement this index on a much broader basis across all verticals over time.
Apart from that, there are other objectives in the Centre’s vision. It is basically to promote overall excellence across different sectors such as education, government, product sectors, service sector, et al . We can do that by disseminating some of these results. And, also by creating new knowledge, which is specific to India. As I said we are already finding some differences. We thought that what we observed in the decades in the US would be replicated here. But, that's not the case as the results and patterns are different. So there may be some new knowledge.
Now, from an academic perspective, we are generating new knowledge related to service excellence which is another sub-goal of the Centre. It also means that we want to work with researchers and other like-minded educational institutions and bring them to a forum to have discussions and do joint research with them to generate more basic knowledge about the area of service excellence.
What is the next step? Are you going to undertake the study of some more sectors to come up with a Servqual score?
Yes that will be the next step. But we need to have the resources to do it. It is very expensive to roll this out. We are now in the process of strategising how best to roll this out and how to get support. We used IFIM students as part of their class projects to go out and collect some additional data. So they also get exposed to the methodology and brought back some data. It was then further analysed to corroborate what we found from the pilot study using commercial marketing research, which was very expensive.
Are you going to write to various companies saying you have this index?
One of the things we are looking for is funding and we hope the companies would be excited about being the founding members of the Centre. And with their help and blessing we can get the word out. It is called the Index of Service Excellence in India. We are making it India-specific and we are also trademarking it.