Service Gap Analysis 101: Reshape Your Service Strategy

Are you in a situation where your company offers perfect services or products, but most of your potential customers gravitate toward the competitors even though they have longer delivery times and higher prices? If this sounds familiar, you might have a service gap issue.

A customer service gap is a difference between what your customers expect and what they get based on their perceptions. How do these situations occur? Why do so many companies have service gaps? And how can you fix them? We’ll answer those questions for you in this blog post.

What Is a Service Gap Analysis? How Does It Work?

As proposed by Parasuraman, Zeithaml, and Berry (PZB) in 1985, a service gap analysis is an effective methodology used to evaluate and improve customer satisfaction levels. Also known as the Gap Model for Customer Service, it rests upon two concepts:

Customer expectations.

    These are a customer’s beliefs and thoughts about a product or a service before accessing it. These expectations are subjective and largely depend on the cultural and ethnographic background, family status, age, lifestyle, and past experiences of your customers, as well as what they already know about your brand.

Customer perception.

    It’s a subjective opinion about your brand that consumers form after interacting with it. This opinion is based solely on their experience with your company, its services, and their communications with your staff.

By taking a closer look at these two aspects, the service gap analysis allows you to determine which part of your business strategy causes customer dissatisfaction (a customer service gap) and what you need to change or improve. Besides this, it identifies four types of gaps that cover various aspects of customer-company relationships.

The Four Gaps in Customer Service

Based on the PZB approach, a customer service gap occurs when perception falls short of expectations. But the main caveat here is, it’s often not so easy to identify the causes for this discrepancy. That’s where the four service gaps come in.

The Knowledge Gap

The knowledge gap is the difference between the customer’s expectations and the company's perception of customer needs. It occurs due to a lack of proper market research, insufficient communication between the company and the clients, or a knowledge silo between the management and the employees working with customers.

In this case, the management doesn’t know (or understand) what the customers want or need. For example, a bookstore failing to stock the most popular books or books from famous authors is doomed to fall behind the competition no matter how many offerings it has.

The Policy Gap

The policy gap means that the management understands the customer needs but fails to implement them fully or accurately in their products or services. Such gaps manifest in poor customer service, lack of regular quality checks, or lack of timely updates of service level standards.

For instance, if a company sells trendy tote bags of poor quality, the customers will look for the same bags (but of better quality) from competitors. And this is not an assumption: a whopping 89% of customers are willing to stop purchasing from a company due to a poor experience and will look for alternatives instead.

The Delivery Gap

The delivery gap exposes the differences between the service in theory and how employees carry it out. This occurs when a company has poor human resource policies and doesn’t have proper onboarding and training practices. As a result, employees may lack the qualifications, knowledge, or motivation to manage the customer needs.

In this case, it all comes down to the customer experience with company representatives. Even if the product or service itself fulfills customer needs, this won’t matter if the experience with the employees was unsatisfactory.

Imagine going to a beauty store to buy some face cream, and asking employees for advice, only for them to direct you to the nail polish section. Even if the store stocks exactly the right face cream for you, this doesn’t matter if the employees can’t direct you to it.

The Communication Gap

The communication gap appears when the company advertises its products and services in a way that doesn’t reflect reality. Creating a flawless promotional campaign is one thing but delivering on what you’ve promised is another.

If the company’s description of the services doesn’t match the actual service delivery, customers will be disappointed and distrustful. Of course, most companies don’t put invalid information out there intentionally. But poor analysis and evaluation of a company’s capabilities may lead to unrealistic promo campaigns. For example, a company promises fast delivery but cannot manage the flow of orders, and some customers don’t get their orders in the expected time.

The combination of these gaps leads to a global customer service gap. Even one of the mentioned gaps can lead to customer dissatisfaction and reduced income levels. Meanwhile, companies that manage to keep their customer satisfaction level above average in their sector achieve 9.1% revenue growth compared to 0.4% for those below the average.

A proper analysis of customer satisfaction will help you increase your company’s income. So, let’s find out how to do it in a way that will benefit you.

How to Run a Service Gap Analysis Properly

Running the service gap analysis is complex and involves many steps. Unfortunately, many managers prioritize the wrong details or focus on insignificant factors, making the whole process inefficient and pointless.

So, here’s a list of a few key ideas to keep in mind while conducting a service gap analysis:

  • Define clear end-goals before conducting an analysis
  • Research each part of your customer service process carefully to discover every problem spot
  • Determine your customer expectations by conducting interviews, gathering feedback, researching the market
  • Set measurable goals you want to achieve through the service gap analysis
  • After you identify your service gaps, create a prioritized list of changes and actions to fix them

A service gap analysis takes a lot of time and resources, so be sure to perform it in the right way.

SWOT Analysis vs Service Gap Analysis: Which One Is Better?

A service gap analysis isn't the only approach to business assessment. For instance, a SWOT (strengths, weaknesses, opportunities, and threats) analysis is another technique widely used by marketing specialists. Since each of these methods requires significant time and money to be implemented, you don't want to go with the wrong one. So, how do you choose the proper analysis approach? First, consider what you want to get out of it.

A SWOT analysis is applied to evaluate a company's performance against its competitors. It’s more applicable for establishing a company's long-term goals and analyzing the company's place in the market. Meanwhile, a service gap analysis is an internal evaluation of a company's activity to highlight weak spots in its work process. A service gap analysis is appropriate when you want to course correct one of your processes and solve a specific issue that causes customer dissatisfaction.

Thus, the question isn’t which method is better or worse, but which one matches your goals the best.

Recap

If you fail to meet customer needs, your business has slim chances of succeeding. Luckily, a service gap analysis allows you to target specific problems that lead to a mismatch between what consumers expect and what they perceive you deliver.

Analyzing different service gaps allows you to focus on different parts of the customer experience and identify weak and strong aspects of your work process. It’s the first step toward an improved and more efficient service strategy.

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