Innovation of SME service industry in Indonesia in improving customer satisfaction

Purpose Small-medium enterprise (SME) service industry is an industry that continues to experience growth in developed and developing countries, including Indonesia. SME service industry that engaged in the service industry, namely, rental for generator set, air conditioner and sound system. In recent years, this SME has been experienced in declining in sales and getting some complaints from their customers. Many studies suggest that service quality and customer satisfaction are the key factors in the service industry. The purpose of this paper is to analyze the quality of service based on the customer's perspective. Design/methodology/approach Data was collected using a combination of literature review, interview, brainstorming and questionnaires and analyzed by using importance-performance analysis (IPA) and quality function deployment (QFD) model. Findings This research resulted in nine technical requirements that allow the company to focus on these attributes to help the company enhance its customer satisfaction. Practical implications Based on the theory, applying service quality, IPA and also QFD will result in customer satisfaction. Practically the enhancement in customer satisfaction is not as easy as expected. Nowadays, customers always expect more and more and it is impossible to fully captured customers' needs and always satisfy customers. Nevertheless, for this research company can understand their customers better, companies can evaluate their performances based on the customers' perspective and know their customers' needs. The company also know their strengths and weaknesses to allocate the resources and maximize their potential. Last but not least, the company is able to know their strategic priority that needs to be done for their better performance in the future to fulfill their customers' needs and hope to enhance their customer satisfaction Originality/value A lot of research about customer satisfaction but still limited especially in the service industry in Indonesia using a combination of IPA and QFD model. So this research will give benefit for SMEs in Indonesia to allocate their resources more effectively by looking at the results of the four quadrants of IPA and house of quality (HOQ) framework can be used for a company as the references for their priority strategic option. Yet, to keep improving, the company recommended reviewing HOQ periodically.