Heed the Customer’s Need
The Economics Times
Sunday, 29 November 1998
Superior customer service, as a differentiating factor, is a corporate responsibility. Taking the example of capital goods, G K Gureja asks companies to reach out or face defections.
Liberalisation has brought the Indian customer to the centre stage of business operations. Progressively, demanding customers are refusing to pay anything more than the comparative value they perceive in a given product or service. This challenge has forced Indian industry to adopt many corporate initiatives aimed at enhancing competitiveness, such as total quality management, productivity improvement, reengineering, total productive maintenance, process improvement and ISO 9000 certification.
However, superior customer service, which has a great potential to enhance competitiveness, affect market’s reactions and influence customers’ decision in a most signif- icant manner, has not yet received the kind of management attention it deserves. Quality customer service can transcend product quality, cost leadership and attractive deliveries.
While the US and Europe were focused on catching up with the quality of Japanese products, Japanese companies shifted their focus to superior customer service as a differentiating feature.
That has resulted in a renewed focus on customer orientation all over the world. In India too, phrases like ‘customer satisfaction’ and ‘customer delight’ have gained considerable rhetoric. And yet it is not being realised that a quantum jump in achieving a higher level of customer satisfaction can come about only by a cultural change across an organisation.
Customer satisfaction or the lack of it is, essentially a function of the total value perceived by the customerthrough various value signals that emanate every time a customer/seller contact or ‘moment of truth’ occurs.
Five major dimensions form the primary basis of customer’s perception of total value offered by potential or contracted suppliers: Cycle time, Quality, Performance and Service, Cost of ownership and People.
While all dimensions continue to stay as touchstones of value perception, sources of value signals undergo a change between phases. In the case of capital goods, for instance, customer relationship comprises three distinct phases as under.
Striking a relationship
The very first contact, often made months in advance of a formal enquiry, marks the commencement of a process aimed at securing a commercially attractive business deal. An ongoing relationship is struck with the finalisation of an order on one of the competing bidders who in the customer’s perception offers the best value for money. Perceptional dimensions manifest themselves in many ways through the signals arising from the selling process.
These include response time and quality of offers; technical documentation; product quality; quality of references; manufacturing facilities; QA processes; service organisation; con- tractual safeguards and the kind of knowledge and keenness exhibited by the sales engineer and others involved in the selling process to understand the customer’s needs comprehensively.
Enhancing the relationship
The order execution brings in the new value signals. Basically, what is under scrutiny here is the capability of a company to meet or exceed the negotiated expectations. Value signals, therefore, stem from the gap between the actual and the committed performance on various parameters. The contact people in this phase are judged by the way they show flexibility in dealing with the delays caused by unexpected events like transit damages, delays on the part of the customer and handling of demands which might appear unreasonable.
Maintaining quality relationship
With the equipment commissioned and handed over, the relationship moves into the all important and longest phase that can either strengthen the relationship or can demolish it with far reaching consequences for the manufacturer. While the manufacturer loses control over the way the equipment will be used and maintained he has a lot at stake at the way the performance of the product may be judged and the way customer’s perceptions may change for the better or for worse.
Industrial capital equipment is purchased for pre-determined economic benefit. Once it is pressed into commercial use many of the earlier value signals recede into the back- ground and actual ‘cost of ownership’ becomes the single most important signal from which the customer derives satisfaction. The customer, therefore, also has vested interest in ensuring that the equipment continues to be available at its peak performance level.
Many occasions, therefore, arise when a user seeks the manufacturer’s help to maximise continuing profitability out of the investment made at some point of time. These occasions provide excellent opportunities for the manufacturer to render support that reflects value for the customer. Accordingly, the customer sees value or otherwise in response time for service calls spare parts supplies, availability an accuracy of technical information, the extent to which training needs are met and the kind of empathy an responsiveness is shown by the customer contact people in this phase of relationship. It is here that the service manager has tremendous opportunity to support and keep the customer fully satisfied.
One would imagine that as long as a customer continues to enjoy specified economic benefit from the equipment, his attitude towards the supplier should continue to be positive. Most often, it is so. But the relationship between two companies basically is 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 other sellers.
Empathy, assurance and responsiveness on the part of company have a great deal of influence over the quality of relationship as perceived by the customer. That explains why many unsuspecting sales managers are surprised when a seemingly happy customer chooses to go to a competing company for second purchase.
Managing customer relations cannot be left to the service department alone but has to become a company value, a culture. All this can happen not by well worded mission statements but management behaviour that supports every word of the mission statemet. Not merely by setting good performance standards but by committing the right resources.
The author is a former director, Thermax Ltd