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This entry provides an overview of some of the key scholarly developments in the area of customer satisfaction with services over the last 25 years. The service sector now dominates employment and gross domestic product figures for the United States and, more broadly, the economically developed world. However, this overview applies beyond the service sector, as some have argued that all firms are service businesses because manufactured goods are typically augmented by related services. Furthermore, increasing numbers of high-profile manufacturers, such as General Electric and ABB, aspire to increase their percentage of revenues from services.

Services as an Area of Study: A Multidisciplinary Evolution

Contemporary academic interest in services—conceptualizing services and related theory building, as well as how to measure customer satisfaction with services—blossomed during the late 1970s (as opposed to much earlier definitions and commentary on service in organizational sociology and economics). The emergent interest focused on how goods differed from services and grew out of a multidisciplinary perspective comprising marketing, organizational behavior, industrial and organizational psychology, and operations management. This multidisciplinary approach underscores how all functions in an organization must work together to satisfy a customer.

The three disciplines contributed to a specification of how the prototypical “pure” service (such as education in the classroom) differs from the prototypical “pure” good (such as a television set) in both production, consumption, and consumer evaluation processes. Compared with goods, services are typically described as possessing relative intangibility, hetero-geneity, perishability, inseparability of production and consumption, and customer participation in coproducing the services consumed. Each discipline has addressed how the nature of services should influence both theory and practice in their field.

Marketing

The academic field of marketing not only helped to pioneer the specification of how services differ from goods; it also drove the assessment of service quality and customer satisfaction from a technical approach to what has been labeled a user-based approach. The technical approach bases quality assessment on conformance to objective and readily measured standards set for the attributes of the output, and thus it is best suited to measuring the quality of mass-produced standardized goods.

The user-based approach assumes that quality is more subjective and therefore more appropriately measured from the perspective of the user or customer. This better fits the intangible, experiential nature of many services. Specifically, goods and services vary in their search, experience, and credence qualities. Prototypical services possess few easily observed search qualities (e.g., color and hardness) but instead are characterized more by experience qualities (e.g., taste) and difficult-to-evaluate credence qualities (e.g., characteristics that customers may need to accept on faith, such as the adequacy of a will). In turn, experience-based intangibility provides limited objective reference points for assessing the value of services, makes it difficult to quantitatively measure output and service quality, and makes it difficult to set specific, clear goals for employees.

The earliest model—and arguably the most visible measure of quality from the user's perspective—SERVQUAL, was developed by three pioneering services marketing researchers, A. Parasuraman, Valarie Zeithaml, and Leonard Berry. This model and survey of service quality assesses five dimensions—reliability, empathy, assurance, responsiveness, and tangibles—using a gap model that measures both expectations of how the service should occur and perceptions of what actually happened. These same five dimensions have not always emerged in studies done by other researchers; indeed, the original authors themselves stated that SERVQUAL and its factors may not be unconditionally applicable for all types of service situations.

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