Service quality dealer identification: the optimization of K-Means clustering

Abstract

Service quality and customer satisfaction directly influence company branding, reputation and customer loyalty. As a liaison between producers and consumers, dealers must preserve valuable consumer relationships to increase customer satisfaction and adherence. Lack of comprehensive measurement and standardization regarding service quality emerges as a consideration issue towards the company service excellence. Therefore, identifying the service quality performance and grouping develops into valuable contributions in decision-making to control and enhance the company's intention. This study applies the K-Means Algorithm by optimizing the number of clusters in identifying dealer service quality performance. Hence, the ultimate service quality formation will be performed. The analysis found three dealer identification categories, including Cluster One, with 125 dealers grouped as good performance; Cluster Two, with 30 dealers grouped as very good performance; and Cluster Three, with 38 dealers grouped as not good performance. In order to evaluate the efficacy of optimum k value, the lists of testing approaches are conducted and compared, whereby Calinski-Harabasz, Elbow, Silhouette Score, and Davies-Bouldin Index (DBI) contribute in k=3. As a result, the optimum clusters are determined through the highest performance of k values as three. These three clusters have successfully identified the service quality level of dealers effectively and administered the company guidelines for corrective actions and improvements in customer service quality instead of the standardized normal distribution grouping calculation.