Before You Can Measure The Quality Of A Service, You Need To Understand?
Corporate executives and consumers have in contempo years adopted divergent views of product quality. Several recent surveys indicate how wide the quality perception gap is:
- 3 out of 5 chief executives of the land'south largest 1,300 companies said in a 1981 survey that quality is improving; only thirteen% said information technology is declining.1 Yet 49% of 7,000 consumers surveyed in a split 1981 study said that the quality of U.Due south. products had declined in the past five years. In add-on, 59% expected quality to stay down or decline further in the upcoming 5 years.2
- Half the executives of major American apparatus manufacturers said in a 1981 survey that the reliability of their products had improved in recent years. Only 21% of U.S. consumers expressed that belief.3
- Executives of U.South. auto manufacturers cite internal records that show quality to be improving each year. "Ford quality improved by 27% in our 1981 models over 1980 models," said a Ford executive.4 But surveys prove that consumers perceive the quality of U.S. cars to be failing in comparison with imported cars, particularly those from Japan.
Mindful of this gap, many U.S. companies have turned to promotional tactics to improve their quality image. Such efforts are evident in 2 trends. The first is the greater emphasis advertisements place on the word quality and on such themes as reliability, durability, and workmanship. Ford, for instance, advertises that "quality is task ane," and Levi Strauss proffers the notion that "quality never goes out of style." And many ads now claim that products are "the best" or "meliorate than" competitors'.
The 2d trend is the move to quality assurance and extended service programs. Chrysler offers a five-yr, 50,000 mile warranty; Whirlpool Corporation promises that parts for all models volition be available for 15 years; Hewlett-Packard gives customers a 99% uptime service guarantee on its computers; and Mercedes-Benz makes technicians bachelor for roadside help after normal dealer service hours.
While these attempts to change client perceptions are a step in the right direction, a company's or a product'due south quality image obviously cannot be improved overnight. Information technology takes time to cultivate client confidence, and promotional tactics alone volition not do the task. In fact, they tin can backfire if the claims and promises do not concur upwardly and customers perceive them as gimmicks.
To ensure delivery of advertising claims, companies must build quality into their products or services. From a product perspective, this means a companywide delivery to eliminate errors at every stage of the production development procedure—product blueprint, process design, and manufacturing. It also means working closely with suppliers to eliminate defects from all incoming parts.
Equally of import yet oftentimes overlooked are the marketing aspects of quality-improvement programs. Companies must exist sure they are offering the benefits customers seek. Quality should be primarily customer-driven, not applied science-driven, product-driven, or competitor-driven.
In developing production quality programs, companies often fail to have into business relationship two basic sets of questions. First, how exercise customers define quality, and why are they suddenly enervating higher quality than in the by? Second, how important is loftier quality in customer service, and how tin can it be ensured after the sale?
Equally mundane as these questions may sound, the answers provide essential information on how to build an effective customer-driven quality program. We should not forget that customers, afterwards all, serve equally the ultimate judge of quality in the marketplace.
The Production-Service Connection
Product performance and client service are closely linked in whatever quality program; the greater the attending to product quality in production, the fewer the demands on the customer service performance to correct subsequent problems. Office equipment manufacturers, for example, are designing products to take fewer manual and more automatic controls. Not but are the products easier to operate and less susceptible to misuse but they also crave petty maintenance and have internal troubleshooting systems to aid in trouble identification. The upward-front investment in quality minimizes the demand for customer service.
Too its usual functions, customer service can act as an early alarm system to detect product quality problems. Customer surveys measuring product performance can also help spot quality command or design difficulties. And of course detecting defects early spares later embarrassment and headaches.
Quality-improvement successes
It is relevant at this point to consider ii companies that accept developed successful client-driven quality programs: 50.Fifty. Bean, Inc. and Caterpillar Tractor Company. Although these two companies are in different businesses—L.L. Edible bean sells outdoor apparel and equipment primarily through mail-order while Caterpillar manufactures globe-moving equipment, diesel engines, and materials-handling devices, which it sells through dealers—both enjoy an enviable reputation for high quality.
Some 96.7% of three,000 customers L.L. Edible bean recently surveyed said that quality is the aspect they like almost about the company. Edible bean executes a client-driven quality programme past:
Conducting regular customer satisfaction surveys and sample group interviews to runway customer and noncustomer perceptions of the quality of its own and its competitors' products and services.
Tracking on its computer all customer inquiries and complaints and updating the file daily.
Guaranteeing all its products to be 100% satisfactory and providing a full cash refund, if requested, on any returns.
Request customers to fill up out a curt, coded questionnaire and explain their reasons for returning the merchandise.
Performing extensive field tests on whatever new outdoor equipment before listing it in the company's catalogs.
Even stocking actress buttons for virtually of the wearing apparel items carried years ago, simply in example a client needs one.
Despite recent financial setbacks, Caterpillar continues to be fully committed to sticking with its quality program, which includes:
Conducting two customer satisfaction surveys following each buy, 1 after 300 hours of production use and the second after 500 hours of use.
Maintaining a centrally managed list of production issues as identified by customers from effectually the world.
Analyzing warranty and service reports submitted by dealers, as part of a production improvement program.
Request dealers to comport a quality audit as soon as the products are received and to attribute defects to either assembly errors or shipping amercement.
Guaranteeing 48—hour delivery of any office to any customer in the world.
Encouraging dealers to constitute side businesses in rebuilding parts to reduce costs and increase the speed of repairs.
How Practise Customers Define Quality?
To understand how customers perceive quality, both L.50. Bean and Caterpillar collect much data straight from them. Even with such data, though, pinpointing what consumers really want is no simple task. For one affair, consumers cannot ever clear their quality requirements. They often speak in generalities, complaining, for instance, that they bought "a lemon" or that manufacturers "don't make 'em like they used to."
Consumers' priorities and perceptions likewise alter over fourth dimension. Taking automobiles equally an example, marketplace data compiled by SRI International propose that consumer priorities shifted from styling in 1970 to fuel economy in 1975 and then to quality of design and performance in 1980.5 (See Exhibit I.)
Changes in the importance to customers of U.S. car characteristics
In addition, consumers perceive a product'south quality relative to competing products. As John F. Welch, chairman and chief executive of General Electric Visitor, observed, "The customer…rates us better or worse than somebody else. It'due south not very scientific, just information technology's disastrous if you score depression."6
One of the major problems facing U.S. automobile manufacturers is the public perception that imported cars, particularly those from Japan, are of higher quality. When a 1981 New York Times-CBS News poll asked consumers if they thought that Japanese-made cars are normally better quality than those made here, nearly the same, or not as good, 34% answered better, xxx% said the same, 22% said non as good, and xiv% did not know. When the Roper Arrangement asked the aforementioned question in 1977, but eighteen% said better, 30% said the aforementioned, 32% said not every bit expert, and twenty% did not know.7
Farther, consumers are demanding high quality at low prices. When a national panel of shoppers was asked where it would like to see food manufacturers invest more, the highest-rated response was "meliorate quality for the aforementioned price."8 In search of such value, some consumers are even chartering buses to Cohoes Manufacturing Company, an dress specialty shop located in Cohoes, New York that has a reputation for offering high-quality, designer-label trade at discount prices.
Consumers' perceptions of product quality are influenced by various factors at each stage of the buying process. Some of the major influences are listed in Exhibit Ii.
Exhibit II Factors influencing consumer perception of quality* *Not necessarily in order of importance.
Watching for key trends
What should companies exercise to improve their understanding of customers' perspectives on quality? We know of no other way than to collect and clarify internal data and to monitor publicly bachelor information.
Internally generated information is obtained principally through customer surveys, interviews of potential customers (such as focus group interviews), reports from salespeople, and field experiments. Call up how L.50. Bean and Caterpillar use these approaches to obtain information on how their electric current and potential customers rate their products' quality versus those of competitors'.
Publicly available data of a more general nature can be obtained through pollsters, contained research organizations, government agencies, and the news media. Such sources are oft helpful in identifying shifts in societal attitudes.
Companies that try to ascertain their customers' attitudes on product and service quality oft focus besides narrowly on the meaning of quality for their products and services; an understanding of changing attitudes in the broader market can exist equally valuable.
Toward the end of the last decade, too many U.S. companies failed to find that the optimism of the mid-1970s was increasingly giving style to a mood of pessimism and restraint because of deteriorating economic conditions. Several polls taken during the 1970s indicated the nature and extent of this shift;nine for instance, Gallup polls showed that while simply 21% of Americans in the early 1970s believed "adjacent year volition be worse than this year," 55% held this pessimistic outlook by the end of the 1970s.
Pessimistic about what the hereafter held, consumers began adjusting their life-styles. The unrestrained desire during the mid-1970s to buy and own more than gave way to more restrained behavior, such as "integrity" buying, "investment" buying, and "life-cycle" buying.
Integrity purchases are those made for their perceived importance to gild rather than solely for personal status. Buying a small, free energy-efficient automobile, for example, can exist a sign of personal integrity. Investment buying is geared toward long-lasting products, even if that ways paying a little more than. The emphasis is on such values as durability, reliability, craftsmanship, and longevity. In the apparel business, for example, more manufacturers take begun stressing the investment value of clothing. And life-wheel buying entails comparing the cost of ownership with the cost of owning. For instance, some might see a $10 light bulb, which uses one-3rd as much electricity and lasts four times as long equally a $1 conventional lite seedling, as the better bargain.
These changes in buying behavior reflect the pessimistic outlook of consumers and their growing emphasis on quality rather than quantity: "If we're going to buy less, let it be better."
By overlooking this fundamental shift in consumer attitudes, companies missed the opportunity to capitalize on it. If they had monitored the information available, managers could have identified and responded to the trends earlier.
Ensuring Quality Later the Auction
As we suggested before, the quality of client service after the auction is often equally important as the quality of the product itself. Of course, excellent customer service tin can rarely compensate for a weak production. But poor customer service tin quickly negate all the advantages associated with delivering a product of superior quality. At companies similar Fifty.L. Bean and Caterpillar, customer service is non an afterthought simply an integral role of the product offering and is subject to the same quality standards as the product procedure. These companies realize that a superlative-notch customer service operation tin can exist an effective means of accomplishing the post-obit three objectives:
1. Differentiating a company from competitors. As more customers seek to extend the lives of their durable appurtenances, the perceived quality of client service becomes an increasingly important factor in the purchase decision. Whirlpool Corporation promises to stand past its products rather than hide behind its distribution channels; it has parlayed a reputation for effective client service into a distinct competitive advantage that reinforces its image of quality.
2. Generating new sales leads and discouraging switches to alternative suppliers. Keeping in regular contact with customers so as to deliver new information to them and gather suggestions for production improvements can ensure the continued satisfaction of existing customers and improve the chances of meeting the needs of potential purchasers.
iii. Reinforcing dealer loyalty. Companies with strong customer service programs can also broaden their distribution channels more than easily to include outlets that may non be able to deliver high levels of postpurchase customer service on their own.
The client service audit
To be effective, a customer service performance requires a marketing plan. Customer services should exist viewed as a production line that must exist packaged, priced, communicated, and delivered to customers. An evaluation of a company'southward current customer service operation—a client service inspect—is essential to the development of such a plan.
A customer service audit asks managers the post-obit questions:
What are your client service objectives?
Many companies accept not established objectives for their customer service operations and have no concept of the role client service should play in their business organisation and marketing strategies. Every company should know what percentage of its revenue stream it expects to derive from service sales and whether the goal is to make a turn a profit, break fifty-fifty, or—for reasons of competitive advantage—sustain a loss.
What services do you provide?
It is useful to develop a grid showing which services your company provides or could provide for each of the products in your line. These might include customer educational activity, financing arrangements, club confirmation and tracing, predelivery preparation, spare-parts inventory, repair service, and claims and complaints handling.
How do you compare with the competition?
A similar filigree can exist used to chart the customer services your competitors provide. Through customer surveys, yous tin place those areas of customer service in which your company rates higher or lower than the competition. In areas where your company is weak, can you lot invest to improve your performance? Where y'all are strong, how easy is it for competitors to match or exceed your performance?
What services do your customers want?
In that location is piffling value in developing superior performance in areas of customer service most customers consider only marginally important. An essential ingredient of the audit is, therefore, to understand the relative importance of various customer services to current and potential customers. Distinct customer segments tin often be identified according to the priorities they attach to particular services.
What are your customers' service demand patterns?
The level and nature of customer service needed often change over the product's life. Services that are top priority at the time of sale may be less important five years later on. Companies must empathise the patterns and timing of demand for customer services on each of their products. These they can graph, as Exhibit Three shows.
Exhibit Iii Postpurchase service demands for two products
Product A in the exhibit is a security command organisation, an electronics production with few moving parts. A high level of service is needed immediately post-obit installation to train operators and debug the system. Thereafter, the need for service quickly drops to simply periodic replacement of mechanical parts, such equally oftentimes used door switches.
Product B is an automobile. Service requirements are pregnant during the warranty period because of client sensitivity to whatever aesthetic and functional defects and besides because repairs are free (to the customer). After the warranty menses, nonetheless, service requirements across basic maintenance will exist more extensive for B than for A, since there are more mechanical parts to wear out.
What trade-offs are your customers prepared to make?
Excellent service can ever be extended—at a price. Y'all should know the costs to your company of providing assorted customer services through various delivery systems (an 800 telephone number, a client service agent, a salesperson) at different levels of performance efficiency. At the aforementioned time, yous should establish what value your customers place on varying levels of customer service, what level of service quality they are prepared to pay for, and whether they prefer to pay for services separately or every bit office of the product purchase price.
Customers are likely to differ widely in cost sensitivity. A printing printing manufacturer, for instance, has found that daily paper publishers, because of the fourth dimension sensitivity of their production, are willing to pay a high cost for immediate repair service, whereas book publishers, being less time pressured, can afford to be more price conscious.
The Customer Service Program
The success of the marketing programme will depend as much on constructive implementation as on audio analysis and enquiry. After reviewing several customer service operations in a diverseness of industries, nosotros believe that managers should concentrate on the following seven guidelines for effective program implementation:
ane. Educate your customers. Customers must be taught both how to use and how non to use a product. And through appropriate preparation programs, companies can reduce the chances of calls for highly trained service personnel to solve simple bug. General Electric recently established a network of production pedagogy centers that purchasers of GE appliances can call cost free. Many consumer bug during the warranty flow can be handled at a cost of $5 per call rather than the $thirty to $50 price for a service technician to visit a consumer'due south home.
2. Educate your employees. In many organizations, employees view the customer with a problem as an annoyance rather than equally a source of data. A marketing program is often needed to change such negative attitudes and to convince employees not simply that customers are the ultimate judge of quality but likewise that their criticisms should be respected and acted on immediately. The internal marketing program should incorporate detailed procedures to guide customer-employee interactions.
3. Be efficient commencement, nice second. Given the selection, most customers would rather have efficient resolution of their problem than a smiling face up. The two of course are not mutually exclusive, but no company should hesitate to centralize its customer service operation in the interests of efficiency. Federal Express, for example, recently centralized its customer service role to improve quality control of customer-employee interactions, to more easily monitor customer service performance, and to enable field personnel to concentrate on operations and selling. The fright that channeling all calls through iii national centers would depersonalize service and badger customers used to dealing with a field function sales representative proved unwarranted.
4. Standardize service response systems. A standard response mechanism is essential for treatment inquiries and complaints. L.50. Bean has a standard form that customer service personnel use to comprehend all telephone inquiries and complaints. As noted earlier, the documented data is immediately fed into a figurer and updated daily to expedite follow-through. In addition, most companies should establish a response system to handle client problems in which technically sophisticated people are called in on problems non solved inside specific time periods by lower-level employees.
5. Develop a pricing policy. Quality customer service does not necessarily mean free service. Many customers even prefer to pay for service beyond a minimum level. This is why long warranty periods frequently take express appeal; customers recognize that production prices must ascent to embrace extra warranty costs, which may principally benefit those customers who misuse the product.10 More important to success than free service is the development of pricing policies and multiple-option service contracts that customers view as equitable and easy to understand.
Because a separate market place exists for postsale service in many product categories, running the client service operation as a profit middle is increasingly common. Just the philosophy of "selling the product inexpensive and making money on the service" is likely to be self-defeating over the long term, since information technology implicitly encourages poor product quality.
6. Involve subcontractors, if necessary. To ensure quality, about companies prefer to have all customer services performed past in-house personnel. When effectiveness is compromised equally a consequence, however, the company must consider subcontracting selected service functions to other members of the distribution channel or to other manufacturers. Otherwise the quality of customer service will decline every bit an aftermath of cost-cutting or attempts to artificially stimulate demand for customer service to apply slack capacity. Docutel, the automatic teller manufacturer, for instance, transferred responsibility for client service operations to Texas Instruments because servicing its pocket-sized base of operations of equipment dispersed nationwide was unprofitable.
7. Evaluate client service. Whether the customer service functioning is treated equally a cost centre or a turn a profit center, quantitative performance standards should exist set for each chemical element of the service parcel. Do an analysis of variances between bodily and standard performances. American Airlines and other companies use such variances to calculate bonuses to service personnel. In add-on, many companies regularly solicit customers' opinions nearly service operations and personnel.
In conclusion, nosotros must stress that responsibility for quality cannot rest exclusively with the production section. Marketers must also be agile in contributing to perceptions of quality. Marketers take been too passive in managing quality. Successful businesses of today volition use marketing techniques to programme, pattern, and implement quality strategies that stretch beyond the factory floor.
References
1. Results of a Wall Street Journal:-Gallup survey conducted in September 1981, published in the Wall Street Periodical, Oct 12, 1981.
2. Results of a survey conducted by the American Lodge for Quality Control and published in the Boston Earth, Jan 25, 1981.
3. 1981 survey information from Apparatus Manufacturer, April 1981.
4. John Holusha, "Detroit'south New Stress on Quality," New York Times, April 30, 1981.
5. Norman B. McEachron and Harold Southward. Javitz, "Managing Quality: A Strategic Perspective," SRI International, Business Intelligence Program Report No. 658 (Stanford, Calif.: 1981).
half-dozen. John F. Welch, "Where Is Marketing At present That We Really Need It?" a speech presented to the Conference Lath's 1981 Marketing Conference, New York City, October 28, 1981.
seven. John Holusha, Ibid.
8. Bill Abrams, "Research Suggests Consumers Volition Increasingly Seek Quality," Wall Street Journal, October 15, 1981.
9. Daniel Yankelovich, New Rules (New York: Random Business firm, 1981), p. 182.
10. For evidence of this fact, see John R. Kennedy, Michael R. Pearce, and John A. Quelch, Consumer Products Warranties: Perspectives, Issues, and Options, report to the Canadian Ministry building of Consumer and Corporate Affairs, 1979.
A version of this commodity appeared in the July 1983 issue of Harvard Business Review.
Source: https://hbr.org/1983/07/quality-is-more-than-making-a-good-product
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