The level of service offered by an organization stems from the business policy or object- ives. These were referred to at the start of Chapter 2. Objectives may, to a large extent, be driven by what the competition is doing or is threatening to do. When deciding upon and specifying a level of service, management tends to rely on the advice of the marketing function. If the marketing function does not correctly interpret the require- ments of the customer, then there will be a gap between the level of satisfaction the organization believes it is providing and what the customer believes is being achieved.
The concept of service gaps arose from the research of Berry et al. (1988) and his col- leagues (Parasuraman et al., 1985, 1991; Zeithaml et al., 1990). Their SERVQUAL model is discussed in some detail in Chapter 16.
As Lewis (1994: 237) says, referring to Parasuraman et al.:
They defined service quality to be a function of the gap between consumers’ expectations of a service and their perceptions of the actual service delivery by an organization; and suggested that this gap is influenced by a number of other gaps which may occur in an organization.
The magnitude of the gap will be compounded by the number of steps in the service process and by the distance of the operational function from the customer. This is illus- trated by the following examples.
In our first example, let us suppose that the marketing department at an International Folk Festival on the south coast has interpreted what the customer wants only 90 per cent correctly. Straight away, this means that the actual performance can never be better than 90 per cent of what the customer really wants. If, however, business policy is such that it is deemed sufficient to provide resources to meet only 90 per cent of the cus- tomer’s requirements (this 90 per cent being set on the understanding that marketing is 100 per cent correct), then at best the customer will only get 81 per cent of what it wants.
In our second example, let us assume that an event management company slightly misinterprets what a major charity wants for a fundraising event, and that also it sets itself an internal target of 90 per cent. If we further suppose that the operation is so resourced that to the best of their ability they can only achieve 95 per cent of the stand- ard set, this means the final result will be that customer satisfaction is at best only 69 per cent. The calculation is as follows:
● Customer requirement 100%
● Misinterpretation of needs 90% (i.e. they get it 90% right)
● Business policy sets target at 90% of 100, but this now actually equates to 90% of 9081%
Table 5.3 Customer service rating
Service required Weighting % Performance Weighted
score
(a) (b) (ab)
Clear specification 50 70 0.35
On time 25 80 0.20
Preparation for 15 90 0.135
receipt of delivery
Timely payment of invoice 10 95 0.095
100 0.78
70 Management of Event Operations
● Due to being under-resourced, the back of house team sets an internal standard of slightly better than 90% of target. However, owing to slight ambiguity and misunder- standing of the management target, this means that even when 92% of internal target is reached, it is only 90% of what was set by management – i.e. 90% of 81%73%
● The front of house team, also under-resourced, is 95% on target – 95% of 73%69%.
From the above examples, it is clear that unless gap analysis is understood, manage- ment will firmly believe that the overall result is somewhere near 90 per cent of what the customer wants. Each department, when queried, will also fervently believe that it is reaching between 90 and 95 per cent of the required performance levels. However, in the second example above it can be seen that the customer’s expectations are only being matched to 69 per cent.
If an organization is close to its customers and aware of what the competition is doing, then a gap of this magnitude should not happen. The larger the organization and the greater the delineation of responsibilities between departmental functions, and the further the operations function is removed from the customer and from consultation in business policy decisions, the greater the likelihood of gaps occurring between what is provided and what the customer really wants. This concept is explored further in Chapter 16.
Reflective practice 5.7
You are an incentive travel company called ‘Travel to Success’, offering your services in pro- viding packages to blue chip companies for their high-flying sales staff.
Typically you provide one- to two-week breaks in Thailand and China, linked with further promotional events to stimulate further sales among the workforce. Your unique selling point (USP) for your company is that you provide an evaluation of the effect of the incentives on the workforce over the following year. Armed with excellent qualitative research you are able to advise companies on the best methods of incentivizing their workforce with a high return on investment.
Imagine that you have done extensive research in the marketplace, and now construct a chart as in Figure 5.2.
1. Identify the critical success factors (CSFs) as determined by your hypothetical in-depth cus- tomer research, and list them on the vertical axis.
2. Assign values to the importance of each factor from the point of view of your customers.
3. Trace an unbroken line onto the chart for each CSF.
4. Estimate your own company’s performance (hypothetically) and plot this on the chart (using a different colour).
5. Similarly, create two further imaginary companies (‘Incentive Holidays R Us’ and
‘Outperform’) and plot their scores onto the chart, again using different colours.
6. What do the results tell you?
Reflective practice 5.8
Return to the earlier section on critical success factors.
1. If you were to take into account the feelings of the major stakeholders, would the line you plot- ted for the Incentive Travel Company, ‘Travel to Success’, change with regard to how you could measure its attainment of the weighted critical success factors demanded by your customers?
2. You could now plot the needs of your customers and also the needs of your prominent stakeholders on the chart. You will see that the lines do not match. What does this tell you?
How will you manage the gaps and the tension between your stakeholders?
Customers, stakeholders and gap analysis 71
Chapter summary and key points
This chapter is the penultimate chapter in the analysis stage of the event operations man- agement model. It began by looking at who the customer is, and distinguishing between stakeholders and customers. The importance of determining critical success factors, not only for customers, but also for stakeholders has been stressed.
To summarize, generally an organization will aim consistently to achieve certain stand- ards or levels of quality as determined by business policy. The decision as to the level of service to provide will be an economic one, and may be driven by what the competition is doing or is likely to do. The intention should be to define accurately what the customer wants. Normally an organization will not be able to meet all the requirements of the cus- tomer completely, and some trade-off will be possible. It is also wise to understand who the stakeholders are and what their concerns might be, and how they can affect your performance.
Where a strong organizational culture exists, enthusiastic and helpful staff, at very little extra cost to the organization, can enhance the perception of service level.
(Wright, 2001) Given infinite resources any system, however badly managed, might provide adequate cus- tomer service.
(Wild, 1995) Many an organization has failed to survive although the customers have been more than satisfied with what they have received. Thus customer satisfaction is not the only cri- terion by which an operations manager will be judged. Customer satisfaction must be provided simultaneously with an effective and efficient operation. The level of customer satisfaction offered must not only be affordable to the organization, but also consistent and sustainable. The events organization, if it is to survive, has to make a profit. Profit is not a dirty word.
Chapter 6 will look in detail at how to analyse the internal environment – i.e. the organization itself. This is the last and essential element in the analysis process prior to the detailed planning stage.