Charm Your Customers or Face Defections!
(Published in June 98’ issue of Sampada)
It was at the MCCI’s exports-award-function on the 2nd of January this year that I came to know of the Chamber’s resolve to elevate Pune as the ‘First City’ of India in computer software exports.
A few days later I learnt that MCCI has set up a special committee on TQM that has assigned itself the task of transforming Pune as the lead city in quality of manufactured goods.
Both of the above goals are fully in tune with the current market realities. A large number of corporates are working on one or more of the compelling initiatives to improve competitiveness. However, one area of business operations that has a great potential to influence customers, affect markets and enhance competitiveness in a most decisive manner, has not yet received the kind of management attention it deserves. That area relates to quality of customer service. Good customer-service can transcend product quality, cost leadership and attractive deliveries. Yet, it has remained largely unexplored. Customer service needs to be brought under sharper management focus with a sense of urgency. Without sufficient customer attention even better product quality and cost competitiveness will fail to attract and retain customers
It is now quite clear that while many countries competing with Japan bridged the quality gap, the Japanese companies shifted their focus to superior customer service as a differentiating feature. That resulted in a renewed focus on customer orientation all over the world. Phrases like ‘Customer satisfaction’ and ‘customer delight’ are buzzing with increasing frequency in management circles. Yet, a change in a company culture alone can bring about a quantum jump in achieving a higher level of customer satisfaction that sets one company apart from the other.
Customer satisfaction or lack of it, is essentially, a function of the total value perceived by the customer through various value signals. The signals, transmitted both by the product behaviour as well as the process by which customer service is delivered. Service encounters may or may not involve face to face interaction between the seller and the buyer and yet, they can send very strong messages of empathy or indifference towards each other. A capital equipment is expected to serve the user over an extended period of time. There are many occasions when a user seeks manufacturer’s help to maximise continuing profitability out of the investment he chose to make at some point of time. These occasions provide excellent opportunities for the manufacturer to render support that reflects creating value for the customer.
The following five dimensions form the primary basis of customer’s perceptiveness of total value offered by potential suppliers :
- Cycle Time
- Quality
- Performance & Service
- Cost of Ownership
- People
The above dimensions manifest themselves in many encounters that take place beginning from the first contact – which, in most cases is made months in advance of a formal enquiry – and going through various degrees of technical and commercial details up to the finalisation of an order. With that a new relationship is struck between the seller and the customer.
Ongoing customer satisfaction depends entirely on how the customer continues to perceive value addition in the activities that follow placement of an order. That is, delivery, installation, commissioning and beyond. However, as the transaction runs from one phase of buyer/seller relationship to the other, the perception factors change relative priority and weightage.
The first two of the three distinct phases of the customer / seller relationship are transient by their very nature. Booking of an order is the end of the first phase and beginning of the second, namely of contract execution. This is a very important phase but again it comes to a close as the equipment is delivered, installed, commissioned and formally handed over to the customer. The relationship then moves into the all important and longest phase that can either strengthen the relationship or can demolish it with consequences of far reaching importance to the manufacturer.
It is in this phase that the service manager of a company has tremendous opportunity to offer value adding support that will keep the customer fully satisfied. Over a time, the customer will turn to be a good referral source and in the ultimate sense an advocate for the company and for its products.
Once a capital equipment is pressed into commercial use many of the earlier value signals recede into the background and actual ‘cost of ownership’ becomes the single most important signal from which the customer derives economic satisfaction.
With the machine commissioned and handed over the manufacturer looses control over the way the equipment will be used and maintained. And yet, the manufacturer in general and the marketing manager in particular, has a lot at stake at the way the performance of the product is judged and the way customer’s perceptions change for better or for worse. This phenomenon underlines the importance of the service manager staying close to the maintenance manager in particular and the actual users of the equipment in general.
A service engineer provides a vital link between the two organisations He delivers service to his customer and earns goodwill for himself and his company, primarily by playing one or more of the following roles:
- A technician.
- A salesman.
- A teacher and
- A friend in deed.
- And, of course, he provides feedback to his company about customer’s expectations, product behaviour and emerging opportunities.
The industrial capital equipment is purchased for pre-determined economic benefit. One would, therefore, imagine that as long as the customer continues to enjoy that benefit his attitude towards the supplier should continue to be positive. Most often, it is so. But the relationship between two companies is, basically, a relationship between a set of people in one company with a set of people in the other. And strange as it may seem the quality of the relationship is influenced, to a considerable extent, by the same soft factors which influence relationship between the customers and sellers of other goods. Apart from the tangibles, these factors or dimensions of service quality are:
(a) Accuracy,
(b) Assurance and
(c) Responsiveness.
When you look at customer satisfaction from this perspective you realise why customer satisfaction can not be left to the service department alone. Corporate management has to ensure that Customer Service does not remain merely a function. It has to become a company value, a culture, an all pervasive attitude through out the organisation. Internal customers who form a chain of the business processes have to feel satisfied before they can be expected to delight the external customer.
According to the Global Competitiveness Report 1996, compiled by the World Economic Forum, India is ranked 43 among 49 nations on the parameter described as ‘Customer Orientation’. If we have to raise our rank to an honourable level on this parameter and consequently on overall competitiveness nothing will work except a cultural revolution in our approach to meeting (or in fact, exceeding) customer’s expectations. That is also the only way to stop customers from defecting to alternative choices. We know that abetted by competition, defections proliferate as fast as they occur in contemporary politics. And companies can ill-afford a threat as daunting as a large scale customer defection.