Improving Service Delivery to Raise Customer Satisfaction

Developing strong service management within organizations is not easy. Some customers may like a particular approach while others will leave to other opportunities. The researchers Sivakumar, et. al. (2014) studied service failures and surprises to develop a model incorporating prospect theory to encourage positive service impressions.  Their work will delve in to frequency of service failures/delights, timing of these failures/delights, proximity of failures/delights, and the sequence of failures/delights. 

It is difficult to understand the totality of service if one is only focused on failures. To get a better picture of the patterns of service perceptions among customers it is beneficial to look at failures, success, and why these things are occurring. To know what the company is doing well and what it is failing at will provide better opportunities to enhance what works and minimize what doesn’t. 

Their model is based off of prospect theory. Prospect theory explains a mental accounting system based upon heuristics that consumers use to judge winnings, losses, and mixtures of both (Kahneman and Tversky, 1979).  Customers have a value proposition in mind when engaging in a particular service and if what is offered is less than that proposition they will be disappointed and possibly move onto another company. If the perceived value is higher than the customer will be satisfied and may stay. 

It is important to remember that service loss or gain from the perspective of the customer is not equal. Research by Mittal, et. al. Baldasare (1998) found that when customers lose it has a greater impact on their psyche than when they win. This means that organizations should ensure that positive impressions are more forthcoming in their service delivery chains than the negative impressions.

They found that by suitably deploying resources and the amount of service personnel firms can gain direct and indirect control over the distribution of service failure occurrences and delights. Even with lay-offs and cuts to budgets it is possible to analyze where these occur and adjust the service process to ensure there are significantly more service positives that raise customer satisfaction.  It requires an analysis of where service success and failure are being delivered and reconstructing to service process to improve upon the chances of positive outcomes. This leads to customer satisfaction, greater purchase amounts, and customer retention.

Kahneman, D. & Tversky, A. (1979). Prospect Theory: an analysis of decisions under risk. Econometrica, 47 (2).

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Mittal, V. et. al. (1998). The asymmetrie impact of negative and positive attribute-level performance on overall satisfaction and repurchase intentions. Journal of Marketing, 63 (33).

Sivakumar, K. et. al. (2014). Service quality: the impact of frequency, timing, proximity and sequence of failures and delights. Journal of Marketing, 78 (1).

Creating Localized Customer Service through Digital Technologies

Digital technologies are an important development in service management.  The paper by Setia et. al (2013) discusses how digital technologies can create higher customer-oriented businesses in localized markets. They focus on two customer service capabilities such as customer orientation capability and customer response capability. To gather their results they used 170 branches of a large Indian bank.

Because the modern market requires a more rapid pace of innovation, shorter product cycles, adjusting customer needs and international commerce there is a need for companies to differentiate themselves based upon better customer service.  Through strong customer oriented strategies and responses they are better able to align their operations to local customer needs.

The goal is to create stronger business outcomes that raise customer retention, lower operational costs, and increase market impact. To do this well requires collecting the right information and using that information to improve upon corporate strategy. How that information is collected and processed will determine the digital design and information quality.

There are four characteristics of information quality:

1.) Completeness that provides enough useful information to impact employee performance.

2.) Accuracy that the information is correct.

3.) Format that presents the information for useful purposes.

4.) Currency that represents the newness of information.

The researchers found that the information quality influences customer service capabilities.  There is need for a fundamental shift from resource acquisition to capability building platforms. The use of proper data collection and usage can create better methods of localizing services for greater impact. Decision makers will need to turn this information into human action that raises customer service perceptions and performance.

Setia, P., et. al. (2013). Leveraging digital technologies: how information quality leads to localized capabilities and customer service performance. MIS Quarterly, 37 (2).

Improving Upon Customer Control Initiatives

Service can be an elusive concept that is not only difficult for customers to define but also for the companies that offer such service. The authors Sichtmann, et. al. (2011) have developed a facilities–transformation–usage framework of service provision by drawing from control theory. It is important for decision makers to understand and focus on the overall process of service exportation in order to increase sales and customer satisfaction rates. 

Cultural considerations play a part in the overall service delivery processes. As the nation increases in exportation of services it is important to understand how culture can impact the perception of service delivery. The exportation of services includes the total concept of service exportation under different times, places, conditions and cultures. 

As service design will require a higher level of customer integration the options may create a little more difficulty in control when compared to simpler designs. However, this does afford the opportunity to create greater service impact and effectiveness. The authors use three concepts that include facilities, transformation and usage. 

Facilities: The facilities stage includes all of the company’s resources such as knowledge, employees, facilities, and technology that make service delivery possible. 

Transformational Stage: The stage in which the company resources are combined with customer resources to create transformation within the service process.

Usage Stage: The stage in which the customer takes ownership of the resources and determines their quality without company influence. 

Their model also uses control to enhance the credibility of their arguments. This includes 1.) input and 2.) process control. Input control regulates the antecedents to performance that include knowledge, values, abilities and motives of employees. Process control regulates the transformational processes through company action to ensure that performance of the elements is at their maximum. 

The researchers found that quality control initiatives would benefit from facilities, transformational, and usage stages as well as input and control processes within their theoretical frameworks. The use of the framework helps organizations manage their customer service exportation better as well as ensure that there is strong management of the customer service elements. It is through fostering greater service development that customer satisfaction raises.

The report does help highlight the concept that customer service strength is necessary to encourage repeat customers. Customer service is an actual strategy that requires understanding the company’s resources, putting in place proper processes for fulfilling that service, and ensuring that customers are happy with the results. The entire process should be checked at various intervals to ensure that it is working and managed properly for effectiveness.

Sichtmann, C. (2011). Service quality and export performance of business-to-business service providers: the role of service employee- and customer-oriented quality control initiatives. Journal of International Marketing, 19 (1).

Reaching New Customer Service Peaks in Manufacturing

Art Work: Dr. Murad Abel

The world of manufacturing is changing and new methods of competing are important to ensure that companies are staying competitive. Companies can incorporate additional concepts related to service and service metrics into their manufacturing operations to help encourage higher levels performance that are more reflective of market needs. Research by Visnjic, et. al. (2013) helps decision makers find new ways of adopting higher service oriented operations.

Just like Americans went through a shift in their manufacturing management toward Japanese models in the past they are now moving toward new customer service oriented values. They are seeking to tie their products more closely to the needs of the customer and this requires a new way of thinking. As the system changes, so will the measurements of success and the accounting of financial revenues.

Metrics are important markers that help guide strategic decisions. The previous product-based performance measurement systems are inadequate to understand the service dynamic. Organizations are seeking to update their measurement mix in order to create higher levels of relevant data used to guide the organization to higher levels of performance.

Companies often rely on a few measurements and try to replicate them in other places, other nations, and at different times. Because measurements are supposed to give one the ability to take a snap shot of what’s going on in the market a single measurement skews this the accuracy of this picture. It is beneficial to ensure that measurements are chosen for their well-rounded image so trends and changes can be discerned.

The researches completed a three-year case study of Atlas Copco a multinational equipment manufacturer to come to their conclusions.  They looked at both qualitative and quantitative data to understand their measurement systems.  They have a presence in 100 companies and 14,000 employees that makes them adequate for a global case study.

They found that moving services from a support function role to a revenue stream helps encourage better decisions.  Conflicts between production and service should rectify by developing and catering new performance measurements that can bridge the gap. Companies should seek both breadth and depth in their customer service penetration.  Capitalizing on the new service oriented dynamics makes companies more responsive to market trends and raises their potential revenue generation.

The report does provide some information on bringing forward concepts as they relate to changing the perception of customer-oriented processes within manufacturing. Having the right data metrics is important for analyzing and making strategic decisions. Implementing service components into the manufacturing processes takes some time, as it is a new way of thinking. As the implementation process continues, the mindset of employees and decision-makers will change with it.

“The relationship with the customer tells us every day how well we perform and, for sure, keeps us alert to all the changes in the market.”—Ronnie Leten, CEO Atlas Copco Group

Visnjic, K., et. al (2013). Steering manufacturing firms towards service business model innovation. California Management Review, 56 (1).

Measuring Service Quality Beyond Metrics

Service management within the hotel industry is vitally important for raising perceived customer value. The more value an organization develops the more likely customers will experience a positive impression of the business. This impression has dollar and cents value. Despite this knowledge many hotels have a difficult time implementing new customer service programs that further their strategic interests. Part of the problem may lay in the culture of the organization, improper metrics, and a misaligned perception of total service quality. 

Let us assume for a minute that a new program to reduce checkout speed failed after implementation. The decision-makers trained the front desk representatives and measured the amount of customers they have attended to within the metric time-frames. Even though the speed increased the level of service declined as employees attempted to meet the service metric and ignored fundamental service expectations. 

Even though management has pushed for this speed they failed to see the fundamental value of a positive experience that lays in the total customer experience. Employees focused closely on the metric but ignored all other variables in an attempt to fulfill the requirements. This is an example where a seemingly concise strategy failed because it only partly represented the customer’s needs. 

To develop a stronger service culture and a higher level of customer satisfaction requires a proper focus on a service culture that continually reinvents itself based upon the needs of their patrons. The essential issues exist within the pro-active attitudes and the way in which employees view their job responsibilities. Is their job defined as the quality of service or is the job defined by the metric? Allowing for greater awareness of the fundamental aspects of customer service allows for a higher level of employee performance beyond short-term gains. 

To create this greater awareness it can be beneficial to understand the local culture and how employees view the concept of service management. For example, a study analyzing the influence of culture and service found that national cultural values impacted the overall personal perceptions of service quality dimensions (Dedic & Pavlovic, 2011). Knowing how employees and managers are perceiving customer service helps in developing stronger methods of improving customer service delivery. 

To understand the differences between employee perceptions and customer perceptions can be furthered by using an employee survey that assesses employee customer service perceptions and comparing the results to customer’s expectations of quality service. Where there is difference there will be a misalignment of service delivery. Better alignment can come through stronger training programs that help bridge the misalignment between employee’s understandings and customer understandings. 

The organization should develop a customer centric approach to its service metrics, employee training, and program implementation. Companies that have developed winning cultures place emphasis on customer service, business growth and employee development (Bradt, 2008). Positive growth is found in customer satisfaction, the expansion of successful services, and the development of employee skills and perceptions. 

 Fundamentally, customers have a variety of factors that constitute a positive experience and focusing simply on a speed metric may miss the other aspects that are inherent in patron retention. Such customers want a friendly attitude, competence in the expected service, and have their issues handled promptly. Failing to understand the totality of the service limits the likelihood of successful program implementation.

The next time you or your management team implements a program that appears to have unintended effects on customer service quality consider the type of metrics being used and ensure that they meet customer expectations in the widest possible sense. Furthermore, ensure that employees’ understandings and definitions of customer service are comparable with customer perceptions of quality service. Where there are differences, consider improving training to bring these two perceptions into alignment and redeveloping metrics to create a more beneficial measure of performance. 

Tips:

-Ensure metrics actually measure what is important to customers.

-Avoid having service quality defined exclusively by the service metric.

-Focus on the total customer experience.

-Develop training programs that increase both skill and perception.

-Ensure that the latent culture is customer versus organizational centric.

-Ensure that customer service programs actually align with strategic approaches. 

Bradt, G. (2008). 5 simple steps to build a winning corporate culture. Supervision, 69 (3). 

Dedic, G. & Pavlovice, D. (2011). A taleof two nations-empirical examination of influence of national culture on perceived service quality. International journal of management cases, 13 (3).