Change Implementation Techniques for Forming Transitional Team, Creating Alignment, Maximizing Connectedness and Creativity

Technique 8.2 Determinants of Customer Service

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There are 11 determinants of service in which customers make judgments about the quality of service they receive from a service provider. Answering the following questions, by circling "yes" or "no", will identify how you stand on the determinants

i) Do you provide reliability? (consistency of performance and dependability) Yes No

ii) Are you responsive enough? (employees' availability to provide services and ability to provide the promised services reliably and accurately) Yes No

iii) Are you competent? (employees' possession of the required skills and knowledge to capably perform the service) Yes No

iv) Are you accessible? (approachability and ease of customer contact with employees)

Yes No

v) Are you courteous enough? (attitudes such as politeness, respect, consideration and friendliness of contact personnel, andcaring and individualized attention provided to customers)

Yes No

vi) Are you a good communicator? (two-way, reciprocal dialogue that keeps customers informed in a language that they can understand and employees listening to customers) Yes No

vii) Are you credible? (traits and attitudes, such as trustworthiness, believability and honesty, andknowledge of staff, and the ability to inspire trust and confidence) Yes No

viii) Are you secure enough? (customers' freedom from danger, risk or doubt) Yes No

ix) Do you understand/know your customer? (the manner in which staff makes the effort to understand customers' needs) Yes No

x) Do you provide enough intangibles? (evidence of the service including post sales, the "feeling" that the customer gets when dealing with the staff, eg assurance, responsiveness, empathy, etc) Yes No

xi) Is the physical appearance adequate (physical facilities, equipment and staff appearance)

Yes No

The more "yes" answers, the better the customer service.

It would be a good idea to ask a range of customers these same questions to provide a reality check on your self-perceived answers.

The relative importance of the dimensions will vary from industry to industry and even from customer to customer.

· · One of the most important determinants is reliability. Irrespective of how good the other dimensions are, customer satisfaction will be low if reliability is poor. Reliability means delivering the basics, ie most customers want a basic service delivered in a competent manner. On the other hand, assurance, responsiveness and empathy are the basis for exceeding customer expectations

· · There is a zone of tolerance which is used to determine the difference between adequate and desired level of service, ie waiting in a queue to be served may be OK for a short time but at some point it becomes a nuisance. The zone of tolerance is situational, ie depends upon the situation at the particular moment when this service is delivered. The zone of tolerance has 3 dimensions

"...- minimum (adequate) level of service

- desired level of service

- perception of actual service delivered..."

Harry Onsman, 2004d

· · Furthermore, there are 5 specific aspects of customer behaviour

"...- loyalty (the strength of the relationship between customer and provider and the likelihood that the customer will do more business with the provider

- switch (the likelihood that the customer might take the business to another provider)

- pay more (the likelihood that customers continue to buy from the provider even if prices increase)

- external response (the likelihood that a customer would complain to other (current and potential) customers about the levels of service provided)

- internal response (the likelihood that the customer would complain to the organisation's staff)

These behaviour intents have a capacity to impact on the profitability of the organisation supplying services to customers because they are associated with the customer's." expectation

Harry Onsman, 2004d

· · A cost-benefit type analysis of the provision of high levels of service quality ie is it worth providing the high level (do the financial benefits outweigh the extra costs of providing the high level of service)?

· · The measurement of productivity should be considered from the customer's point of view, rather than from a production focus

A Model: The Customer Triangle

· · The customer triangle is one way to describe the customer-driven approach, ie strategy, systems and people, all revolve around customers' needs and are shaped by those needs


organisational development change management

(source: Karl Albrecht, 1994)

This triangle stresses the need to develop special insights into the needs of customers, and to have business strategies focused on customer values, rather than on organisational values. Consequently, there is a re-focusing of values, systems and people who express organisational values.

· · In looking at customer values, there is a hierarchy as shown in the table below.

organisational development change management

- basic= the first step, and needs to be "got right", ie producing the product wanted by the customer;

- expected= mediocre performance level that most organisations can attain, ie customer does not notice the supplier, and the supplier does not have customer loyalty;

- desired= the start of competitive advantage, ie handling customer needs, exceeding customer expectations, and the customer wants to continue the business relationship, ie. developed customer loyalty;

- unanticipated = you are ahead of the customer by realising/anticipating his/her future needs.

(source: Karl Albrecht, 1994)

· · This hierarchy shows that an organisation has to perform well on the first 2 levels of value just to do business with the customer. Only when an organisation can offer higher levels of value than its competitors is there any differentiation and competitive advantage

· · Performance at "desired" level 3 demonstrates that you are better than your competitors. As a result, customers will start to favour your organisation. If you achieve the un-anticipated level, then you get to a special place in your customer's eyes, and have a breakaway competitive position. On the other hand, if the un-anticipated becomes the norm, it becomes expected by your customer, and you have to continue to provide that level of service quality, or you will lose the customer

Relationship Marketing as Part of Customer Management

· · Customer management is about developing relationships (including personal) so that the customers like dealing with you and your organisation. Furthermore, they perceive that they receive real value from dealing with you.

· · Relationship marketing can be done in several ways:

- by identifying the key people in your customers' organisations, ie the influencers, and targeting them with your communications, relationship building, etc. Who are the influencers or decision-makers in purchasing, ie who has the authority to sign cheques and/or purchase orders? At what level(s) in the organisations are the decision-makers to be found? Are they the senior executives, purchasing professionals, finance executives, technical and research staff, production managers, marketing staff, etc.? Sometimes it can be one person or a number of people. This needs to be explored and identified

- by bringing customers and their needs into the process of design and development of product and services

- by cultivating new niche markets

- by building a network of suppliers, outlets, partners and end-users which reinforces your company's reputation and technological leadership

· · These strategies emphasize creativity and interaction, especially with customers, ie making the customer part of your organisation

· · At the same time, one needs to be wary about

- getting immersed in creating and producing products (this can cause organisations to become introspective and forget about the customers)

- getting lost in the competition of selling, and the cut and thrust of the marketplace, ie chasing market share (this can create a culture in which a customer is seen as a statistic only)

· · The aim of relationship marketing is to have undisputed leadership in the market you have targeted, ie you market and create products and services that are suitable to that market

Remember: everyone in the organisation is involved in customer service ? not just sales and marketing personel who are directly involved with the customer. The receptionist, the administration and accounting staff, etc have important parts to play. Remember also that positive people-handling skills are pivotal and more significant than processes and programs

Characteristics of the Commercial World that Impact on Customer Management

· · Competition is global and exploding

· · Numbers of products and services are multiplying and their lifespans are shrinking

· · Markets are shattering into thousands of niches

· · Distribution channels are increasingly chaotic, and this is complicating customer communications

· · There is continual re-organisation of organisations to develop better business practices

· · Competition and market chaos means that research is less reliable and firm predictions foolhardy

· · Customers are becoming better informed and educated

· · Customers are more demanding and less interested in commodity products

· · Increasingly, competition is coming from non-traditional sources, ie outside your own industry

· · Researching emotional responses of customers is becoming more common. Some examples,

- banks are exploring data about spending patterns, eg entertainment v. fuel usage

- use of psychology to dictate decisions, ie evaluat your emotional state before determining whether to go shopping or not

- smart fridges that understand when you are over eating and lock their door

- consumer backlash against short-term, ephemeral products in favour of products that have some meaning/contexts/substance/medium to long-term benefits, etc, eg a sandal designed in Kenya that expands as the child's foot grows

Selecting 'Real' Trends

The trick is picking a 'real' trend ? as opposed to the fake trends. Some of the factors to keep in mind are

· · Age complexity - the stereotypical image of each age group is no longer applicable; there is much more behavioural variation within each age group. Traditional age behaviour patterns are breaking down with more "generational congestion", eg baby boomers do not act their age, children are maturing faster, adults are acting younger (the rise of "kidults") and people aged over 60 are enjoying a "second youth".

· · Life-stage complexity (this is linked with age complexity)- the days of predictable behaviour by consumers, based on the stage they are in their lives, are over. This is not a new trend, but it means strategies based on traditional demographics are increasingly ineffective.

· · Gender complexity - the rise of the metrosexual and "the increasing feminisation of both society and men" has created a "strong cross-over of product usage and behaviours from males to females and vice versa".

· · Income complexity - rising wealth is changing the way people behave, with well-heeled consumers looking for "anti-luxury" products and poorer consumers fuelling the "masstige" trend, that is, luxury products sold at reasonable prices.

· · Convenience - the trend of time-poor consumers looking for more convenient products continues to create new revenue opportunities for many companies.

· · Health - the search for healthier products continues to gather strength. Now the focus has shifted to spiritual as well as physical well-being.

· · Sensory - increasing stress, rising affluence and globalisation are prompting consumers to look for new and more intense sensations. For packaged-goods companies, this means consumers are increasingly demanding about the quality, pleasure, variety and experience that products offer.

· · Individualism - another well-established trend, the anti-mass-marketing attitude of some consumers, is creating opportunities for mass-marketers to personalise and customise products and "to help consumers express themselves through their consumption choices".

· · Homing - although cocooning (people locking themselves away in their homes to avoid an ugly, difficult world) was never as big here as in the United States, the homing trend is catching on. The home and family are increasingly important ideals, driving sales of home-theatre equipment, security systems and many other products.

· · Connectivity - unhappy about the fast-paced, impersonal nature of modern life, some consumers are focusing on their local communities and "lifestyles that are rich in relationships". Marketers can help people feel connected by developing products and services that "bring people together".

Some Themes in Customer Management

· · The only way to command and maintain the loyalty of customers is to create relationships with them based on superlative service, trust, quality and responsiveness

· · Customers are moving targets governed by competition, fashions and trends, market infrastructure and strategic relationships

· · Market creation is more important than market share, ie aim for a piece of the action and not somebody else's action, as the market share is limited and hotly disputed

· · Should aim to handle the future needs of your customers

· · The market-driven approach operates on the dialogue between you and the customer, with service and products adjusted, based on the findings of the dialogue

· · Using predictions based on past performance is very dangerous as the future is becoming less and less like the past with the explosion in technology. Furthermore, past successes do not guarantee success in the future

· · Importance of qualitative research rather than the quantitative, ie people versus numbers

· · Marketing is everyone's job, not just a marketing department's role

· · The rise of the importance of the Internet and associated technologies (mobile phones) has put the power more in the customer's corner in marketing.

Signalling Theory

This involves understanding human instinct for status seeking. Recent research (Patrick Durkin, 2009) has identified 6 central traits that apply to individuals seeking status:

i. general intelligence (consumers becoming more skeptical)

ii. openness to experience (conspicuous consumption vs. savings)

iii. consciousness (conscious people plan for the future, honour their promises, relationships, study and work hard)

iv. agreeableness (doing or saying things that are acceptable to your peer group)

v. extraversion (relies upon companionship and contact with other people)

vi. emotional stability (does not follow fads)

Traits ii to vi are personality traits and are a

"...very powerful way to talk about people in terms of different personalities, interests and tendencies and along with general intelligence seem to capture a lot of variation between people which is relevant consumer choice..."

Geoffrey Miller as quoted by Patrick Durkin, 2009

(source: Patrick Durkin, 2009)

Branding (as part of Customer Management)

 . Brand = a signal (negative or positive) that influences the consumers position to buy a product. Brands are a way of signalling quality and of communicating identity.

· · Branding is about how a product or service can develop a good relationship with a customer so that a premium price can be charged. It is about how the customer feels when associated with the product/service; it is about perceptions that have not been formed by accident. They have been formed by a relationship which has survived good times and bad, via consistent yet differentiated positioning, innovative production and promotion, a high level of service, a commitment to remaining ahead of customer needs, delivering on promises, etc.

· · Branding is about creating a positive interaction with the customer and not being an annoyance.

· · As Richard Branson stated, a brand needs to appeal to an attitude of mind, more than a particular demographic.

On the other hand,

"...too many companies want their brand to reflect some idealistic, perfected image of themselves. As a consequence, the brands acquire no texture, no character and no public trust..."

Richard Branson, 2008

· · The power of a brand is demonstrated when Virgin moves into a new product and/or market, such as Virgin into the mobile phone market. It sends shock waves through the incumbents.

· · For example, Phil Knights did not sell a lot of Nike Air because customers wanted to jump higher, but because, as basketballers, they wanted to be like Michael Jordan.

· · Traditionally businesses focus on the core. Of the 20 top brands in the world, 19 are associated with one product type, eg Coca-Cola specializes in soft drinks, Microsoft produces computer software, Nike makes sports shoes and clothes. The only exception is Virgin where Richard Branson uses the Virgin brand as the glue that holds his diverse business empire together. The success of this brand is derived from its focus on customer service; this focus is supported by values including innovation, honesty, caring, value-for-money and fun. Virgin is keen to make its interaction with its customer a fun experience, eg uses irreverent humour.

In fact, everything is done to protect the Virgin brand's reputation, ie

"...our aim is to establish Virgin as the most respected brand in the offering customers excellent value for money in so many areas of their lives, we aim to make them happier......Virgin's success is primarily down to the consistent way it's delivered on its brand proposition......because the central proposition of the Virgin brand is about customer experience, Virgin has..... innovative products or services to satisfy changing customer demand..."

Richard Branson, 2008

In fact, Branson (2008) has described Virgin as "branded venture capitalism"

· Need to understand the difference between luxury and consumer brands. The central message of the luxury industry is its exclusivity, ie people are excluded, usually owing to price and/or availability. This is the complete opposite to customer brands where one is trying to encourage the mass market to buy. Thus luxury goods are able to charge a higher price. Despite this, luxury consumers are not dissimilar to ordinary consumers in thier stages of consumption, ie evolving from necessity to discretionary spending then to conspicuous brand consumption.

· Luxury brands - there are 5 stages of market evolution

i) basic needs like shelter, sustenance, social belonging, etc

ii) some surplus earnings allow purchases of amenities like cars, white goods (refrigerators, washing machines, stoves, etc)

iii) surplus earnings are large enough to be able to buy and boast about prominent luxury brands. Price can create some exclusivity

iv) "nouveau riche" stage - able to buy goods and services for not what they are but what they represent, ie success

v) when statements of wealth cease to matter, ie because the consumer is so wealthy and/or their environment attaches value to elements other than brand display

"...The ability to surpass envy is a true luxury..."

Andrew Cornwell, 2013

At this stage, hidden brands become important as they demonstrate an inherent exclusivity that relies on knowledge rather than wealth. Also the narrative of the brand becomes important.

"...Luxury is a business whose products rely on craftsmanship, history, exclusivity and service. When the business is run well, the customer enjoys a luxurious experience that transcends price and rarity..the experience is an intangible asset..."

Andrew Cornwell, 2013

· Fighter brands are created cynically to combat a competitor that is threatening your market share. This is different from traditional brands that were designed with target consumers in mind. Many fighter brands fail for the following reasons:

i) cannibalisation - when the fighter brand is aimed at a low-priced rival but ends up reducing sales from more profitable premium brands, eg Kodak's funtime film aimed at Fuji's cheaper products but ended up doing more damage to Kodak's own premium gold plus line

ii) failure to attack - concern about cannibalising premium brands resulting in developing a timid strategy that has minimal impact on the competition

iii) internal orientation - become so inwardly focused on developing fighter brands that you forget about customers, eg United Airlines launched TED to combat low-priced carriers but it was still more expensive

iv) missing profitability ? when an organisation creates a brand designed to compete with low-priced rivals but has no capabilities to handle the resultant situation

v) resource drain - timing for launching a fighter brand is wrong and resources are wasted

Branding as part of change management

"...good branding, it's an organisational change exercise...... it signals so much more than an updated logo. It does signify an organisations change and where they're going..." and immediately identifies what the organisation is about
Cameron Kerr as quoted by Michael Bleby, (2015)
Logos are critical because they lodged themselves in the consumer's mind, ie
"...the mind works better looking at pictures than words, so if you can create a picture, or an image through the design of a logo that resonates or associates a certain company, you'll recognise that company straight away..."
John Borghetti (Virgin Australia) as quoted by Michael Bleby, (2015)

" is not just a piece of graphic. It needs to communicate everything about the business and it needs to be captured in one simple device. It needs to work on the size of a football field and it needs to live on an app..."

Hans Hulsboschas quoted by Michael Bleby, (2015)

Need to be aware of overused buzzwords include "crafted, artisan, immersive, curated, innovative, disruptive, bespoke, heritage and authentic"

Some examples of re-branding to create a new image and as part of change, especially after bad publicity (AFRBoss 2015b):

- following corruption allegations, Leighton Holdings changed its name to CIMIC (construction, infrastructure, mining and concessions)
- under pressure from investors over alleged human rights abuses in detention centres and founding families' withdrawal of the right to use the Transfield name, Transfield changds its name to Broadspectrum
- Onesteel became Arrium
- QR National is now Aurizon
- ICI became Orica



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