There is a great overlapping in marketing and operations in the case of services. Thus, managing the quality of all service marketing mixes will be regarded as the quality of service.
The following reasons can be given in order to understand the importance of service quality:
1. Reduced Costs: By having higher level of quality, it is possible to have lesser mistakes for any repeat task, refunds to dissatisfied customer or service recovery exercises.
The cost can be reduced with the help of various preventive and corrective measures and thus improving the productivity.
2. Resistant or Less Affected to Price War: Some additional differentiating traits are possessed by those firms which are considered to have higher quality of their services, and thus they are able to avoid the service commodity trap.
As greater benefits in comparison to the competitors are provided, thus these firms can charge more prices for their services.
3. Greater Customer Loyalty: Greater customer satisfaction can be ensured by higher service quality which results in greater customer loyalty and greater profits.
4. Higher Market Share: Positive word-of-mouth publicity will be received from the loyal customers which will help the firm to increase their customer base with minimum costs.
5. Loyal Internal Customers: There is a linear relationship that exists along with the profitability of the firm, loyal customers, and happy employees.
There can be a sense of proud among the employees for the firm in which they are employed and higher level of inspiration and delivery of higher quality service can be achieved from the employees having sense of belongingness with the firm.
6. Higher ROI (Return on Investment): High-quality service can be facilitated via the service profit chain, which will result in higher profitability.