How Our Perspective is Different
Our research has shown that both cognitive (rational) and affective (emotional) drivers are important to the customer experience. Related to the latter, we address fundamental human needs; these include the need for empathy in service experiences, security, self-esteem and justice/fairness.
Much has been written on the issue of standard of comparison. That is, to what should a company compare its self? Its past performance, the market leader, what?
This question should be addressed with the company's business goals in mind. If your business goal is retention of your customers, what your competitor's customers think of their companies is irrelevant. What matters is what your customers think of you relative to your competitors.
In most markets, customers can evaluate - and do evaluate - products they have not used. They make this evaluation on the basis of brand image.
Conversely, if your business goal is the acquisition of customers, you need to be concerned about your competitors' customers perceptions of their respective companies relative to you.
Many companies have both business objectives, and so their performance should be examined from both perspectives.
A company's service quality is usually thought of in terms of its overall level (high, low). But quality control practices in manufacturing have identified another aspect of quality: consistency (variation). Consistency is important for several reasons. One is that what we call consistency is experienced as reliability by customers.
Another reason is that variation toward the low end of performance can do a great deal of damage. On some service attributes (e.g., courtesy), the customer attrition rate may be as high as 50% among respondents giving the company low performance ratings. Suppose that a sizeable percentage of a company’s customers, say 15%, give the company a low rating on such an attribute. Under those conditions, without taking into account the acquisition of new customers, the company will lose 7.5% of its customers per year.
It is a common practice in the industry to calculate an "importance" score for each attribute of a service channel. But is this always appropriate? Consider the following service questions from a typical banking study:
- Courteous and polite
- Correct first time
- Referred me to appropriate person
- Understood my question
- Answered my question clearly
- Clearly explained bank’s procedures
- Time in line
- Efficiently handled my transaction
These attributes are interdependent, and in several respects. For example, “Answered my question clearly” and “Clearly explained bank procedures” are interdependent by definition, because many customer questions pertain to bank procedures.
Some of the questions are interdependent in a functional sense. For example, “Efficiently handled my transaction” and “Understood my question.” How well a service person understands a customer’s question affects the efficiency with which she handles the customer’s transaction.
There is also type of dependency having to do with the data collection process. There is a tendency for customers’ perceptions of the company’s performance in one area to influence other perceptions in that area to varying degrees. For example, a customer’s perception of one aspect of a bank teller’s performance effects her evaluation of other aspects of that teller’s performance.
Because of all this, if the company’s performance on one attribute changes, its performance on some of the other attributes will also change to varying degrees. To the extent that this is the case, it calls into serious question whether we should attempt to measure the importance of the attributes individually, but should instead think in terms of what subset of attributes should the company seek to improve its performance.