Prople Who Tried a Prodcut Were Satisfied and Bought It Again Are Called
Corporate executives and consumers have in recent years adopted divergent views of product quality. Several recent surveys signal how broad the quality perception gap is:
- Three out of five chief executives of the country's largest ane,300 companies said in a 1981 survey that quality is improving; just xiii% said it is declining.1 Yet 49% of 7,000 consumers surveyed in a carve up 1981 study said that the quality of U.S. products had declined in the past five years. In addition, 59% expected quality to stay down or decline further in the upcoming five years.ii
- One-half the executives of major American appliance manufacturers said in a 1981 survey that the reliability of their products had improved in recent years. Only 21% of U.S. consumers expressed that belief.3
- Executives of U.South. auto manufacturers cite internal records that prove quality to exist improving each year. "Ford quality improved past 27% in our 1981 models over 1980 models," said a Ford executive.4 But surveys bear witness that consumers perceive the quality of U.S. cars to exist declining in comparison with imported cars, especially those from Japan.
Mindful of this gap, many U.S. companies have turned to promotional tactics to meliorate their quality image. Such efforts are evident in two trends. The first is the greater emphasis advertisements place on the discussion quality and on such themes every bit reliability, durability, and workmanship. Ford, for example, advertises that "quality is job one," and Levi Strauss proffers the notion that "quality never goes out of fashion." And many ads now claim that products are "the all-time" or "better than" competitors'.
The second tendency is the move to quality assurance and extended service programs. Chrysler offers a five-year, 50,000 mile warranty; Whirlpool Corporation promises that parts for all models will be available for 15 years; Hewlett-Packard gives customers a 99% uptime service guarantee on its computers; and Mercedes-Benz makes technicians bachelor for roadside assistance later normal dealer service hours.
While these attempts to change customer perceptions are a stride in the right direction, a company'south or a product'due south quality image obviously cannot be improved overnight. Information technology takes fourth dimension to cultivate client confidence, and promotional tactics alone will not do the job. In fact, they tin backfire if the claims and promises practice non hold up and customers perceive them equally gimmicks.
To ensure delivery of advertising claims, companies must build quality into their products or services. From a production perspective, this means a companywide commitment to eliminate errors at every stage of the product development process—product blueprint, procedure design, and manufacturing. It also means working closely with suppliers to eliminate defects from all incoming parts.
Equally important notwithstanding frequently overlooked are the marketing aspects of quality-comeback programs. Companies must be sure they are offering the benefits customers seek. Quality should exist primarily customer-driven, not technology-driven, production-driven, or competitor-driven.
In developing product quality programs, companies often neglect to take into account two bones sets of questions. First, how practice customers define quality, and why are they suddenly demanding college quality than in the past? Second, how important is high quality in client service, and how tin it be ensured later the sale?
As mundane as these questions may sound, the answers provide essential information on how to build an effective customer-driven quality programme. We should not forget that customers, after all, serve as the ultimate judge of quality in the marketplace.
The Production-Service Connexion
Product operation and customer service are closely linked in any quality program; the greater the attending to production quality in product, the fewer the demands on the customer service functioning to correct subsequent problems. Office equipment manufacturers, for example, are designing products to have fewer transmission and more than automatic controls. Non but are the products easier to operate and less susceptible to misuse but they likewise require little maintenance and accept internal troubleshooting systems to help in problem identification. The up-front end investment in quality minimizes the need for customer service.
Besides its usual functions, customer service can deed as an early warning arrangement to detect production quality bug. Customer surveys measuring production performance can also assist spot quality control or design difficulties. And of course detecting defects early spares later embarrassment and headaches.
Quality-comeback successes
It is relevant at this point to consider ii companies that take developed successful customer-driven quality programs: Fifty.L. Bean, Inc. and Caterpillar Tractor Company. Although these ii companies are in different businesses—L.L. Edible bean sells outdoor clothes and equipment primarily through mail-society while Caterpillar manufactures globe-moving equipment, diesel engines, and materials-treatment devices, which it sells through dealers—both enjoy an enviable reputation for high quality.
Some 96.7% of 3,000 customers L.Fifty. Bean recently surveyed said that quality is the attribute they like most about the company. Bean executes a customer-driven quality program by:
Conducting regular customer satisfaction surveys and sample grouping interviews to track client and noncustomer perceptions of the quality of its own and its competitors' products and services.
Tracking on its computer all customer inquiries and complaints and updating the file daily.
Guaranteeing all its products to be 100% satisfactory and providing a total cash refund, if requested, on whatever returns.
Asking customers to make full out a short, coded questionnaire and explain their reasons for returning the trade.
Performing all-encompassing field tests on any new outdoor equipment before list information technology in the company's catalogs.
Even stocking actress buttons for most of the apparel items carried years ago, just in case a customer needs one.
Despite recent financial setbacks, Caterpillar continues to be fully committed to sticking with its quality programme, which includes:
Conducting ii customer satisfaction surveys following each purchase, one after 300 hours of production apply and the 2d afterward 500 hours of employ.
Maintaining a centrally managed list of product bug as identified by customers from around the globe.
Analyzing warranty and service reports submitted by dealers, every bit function of a product improvement program.
Asking dealers to conduct a quality inspect as soon as the products are received and to attribute defects to either assembly errors or aircraft damages.
Guaranteeing 48—hr delivery of any part to any customer in the world.
Encouraging dealers to establish side businesses in rebuilding parts to reduce costs and increase the speed of repairs.
How Do Customers Ascertain Quality?
To understand how customers perceive quality, both L.Fifty. Bean and Caterpillar collect much data directly from them. Even with such data, though, pinpointing what consumers really want is no simple task. For one thing, consumers cannot always articulate their quality requirements. They often speak in generalities, lament, for example, that they bought "a lemon" or that manufacturers "don't brand 'em like they used to."
Consumers' priorities and perceptions too change over time. Taking automobiles as an example, market data compiled by SRI International suggest that consumer priorities shifted from styling in 1970 to fuel economy in 1975 then to quality of design and performance in 1980.5 (See Exhibit I.)
Changes in the importance to customers of U.S. automobile characteristics
In add-on, consumers perceive a production's quality relative to competing products. Every bit John F. Welch, chairman and master executive of General Electric Company, observed, "The client…rates us better or worse than somebody else. It'due south not very scientific, but information technology'due south disastrous if you score low."6
One of the major problems facing U.South. motorcar manufacturers is the public perception that imported cars, peculiarly those from Japan, are of higher quality. When a 1981 New York Times-CBS News poll asked consumers if they thought that Japanese-made cars are usually better quality than those made here, about the same, or not every bit skilful, 34% answered better, 30% said the aforementioned, 22% said non equally good, and 14% did not know. When the Roper System asked the same question in 1977, only 18% said ameliorate, thirty% said the same, 32% said not as good, and 20% did non know.7
Further, consumers are demanding high quality at low prices. When a national panel of shoppers was asked where information technology would like to see nutrient manufacturers invest more, the highest-rated response was "better quality for the same price."8 In search of such value, some consumers are even chartering buses to Cohoes Manufacturing Company, an apparel specialty store located in Cohoes, New York that has a reputation for offering high-quality, designer-characterization merchandise at discount prices.
Consumers' perceptions of product quality are influenced by various factors at each stage of the ownership process. Some of the major influences are listed in Exhibit II.
Exhibit Two Factors influencing consumer perception of quality* *Not necessarily in order of importance.
Watching for key trends
What should companies do to improve their understanding of customers' perspectives on quality? Nosotros know of no other way than to collect and clarify internal data and to monitor publicly bachelor information.
Internally generated information is obtained principally through customer surveys, interviews of potential customers (such every bit focus group interviews), reports from salespeople, and field experiments. Think how L.L. Bean and Caterpillar use these approaches to obtain data on how their current and potential customers rate their products' quality versus those of competitors'.
Publicly available information of a more general nature tin can exist obtained through pollsters, independent inquiry organizations, government agencies, and the news media. Such sources are ofttimes helpful in identifying shifts in societal attitudes.
Companies that endeavor to define their customers' attitudes on product and service quality often focus too narrowly on the significant of quality for their products and services; an agreement of changing attitudes in the broader marketplace can exist equally valuable.
Toward the cease of the last decade, too many U.S. companies failed to discover that the optimism of the mid-1970s was increasingly giving way to a mood of pessimism and restraint because of deteriorating economic weather. Several polls taken during the 1970s indicated the nature and extent of this shift;nine for instance, Gallup polls showed that while only 21% of Americans in the early 1970s believed "side by side year will be worse than this year," 55% held this pessimistic outlook by the end of the 1970s.
Pessimistic about what the future held, consumers began adjusting their life-styles. The unrestrained want during the mid-1970s to buy and own more than gave way to more restrained behavior, such every bit "integrity" ownership, "investment" buying, and "life-cycle" ownership.
Integrity purchases are those made for their perceived importance to gild rather than solely for personal status. Buying a modest, energy-efficient automobile, for example, can be a sign of personal integrity. Investment buying is geared toward long-lasting products, even if that means paying a little more. The emphasis is on such values equally durability, reliability, craftsmanship, and longevity. In the apparel business concern, for case, more manufacturers have begun stressing the investment value of clothing. And life-cycle buying entails comparing the cost of buying with the toll of owning. For example, some might run into a $ten light bulb, which uses i-tertiary as much electricity and lasts iv times as long as a $1 conventional calorie-free bulb, every bit the better deal.
These changes in buying behavior reverberate the pessimistic outlook of consumers and their growing accent on quality rather than quantity: "If we're going to buy less, let it be better."
Past overlooking this central shift in consumer attitudes, companies missed the opportunity to capitalize on it. If they had monitored the information available, managers could have identified and responded to the trends earlier.
Ensuring Quality After the Sale
As nosotros suggested earlier, the quality of customer service later on the sale is often as important as the quality of the production itself. Of class, excellent customer service can rarely recoup for a weak product. Merely poor customer service can quickly negate all the advantages associated with delivering a production of superior quality. At companies like L.L. Bean and Caterpillar, customer service is not an afterthought only an integral part of the product offer and is discipline to the same quality standards as the production procedure. These companies realize that a top-notch customer service operation can exist an effective ways of accomplishing the following three objectives:
i. Differentiating a visitor from competitors. As more customers seek to extend the lives of their durable goods, the perceived quality of customer service becomes an increasingly of import factor in the purchase decision. Whirlpool Corporation promises to stand by its products rather than hide behind its distribution channels; it has parlayed a reputation for effective customer service into a singled-out competitive advantage that reinforces its image of quality.
2. Generating new sales leads and discouraging switches to alternative suppliers. Keeping in regular contact with customers and then every bit to deliver new data to them and get together suggestions for product improvements can ensure the continued satisfaction of existing customers and meliorate the chances of meeting the needs of potential purchasers.
3. Reinforcing dealer loyalty. Companies with potent customer service programs can too augment their distribution channels more easily to include outlets that may non be able to deliver high levels of postpurchase customer service on their own.
The customer service audit
To be constructive, a customer service operation requires a marketing plan. Customer services should exist viewed as a product line that must exist packaged, priced, communicated, and delivered to customers. An evaluation of a visitor'due south current client service performance—a customer service audit—is essential to the development of such a programme.
A customer service inspect asks managers the following questions:
What are your customer service objectives?
Many companies have non established objectives for their client service operations and have no concept of the function customer service should play in their business and marketing strategies. Every company should know what percentage of its revenue stream it expects to derive from service sales and whether the goal is to make a profit, interruption fifty-fifty, or—for reasons of competitive advantage—sustain a loss.
What services practise yous provide?
It is useful to develop a grid showing which services your company provides or could provide for each of the products in your line. These might include customer education, financing arrangements, order confirmation and tracing, predelivery preparation, spare-parts inventory, repair service, and claims and complaints treatment.
How exercise you compare with the contest?
A similar grid can exist used to chart the customer services your competitors provide. Through client surveys, you lot can identify those areas of customer service in which your visitor rates higher or lower than the competition. In areas where your company is weak, can you invest to meliorate your operation? Where you are strong, how piece of cake is it for competitors to match or exceed your functioning?
What services do your customers want?
At that place is picayune value in developing superior performance in areas of customer service well-nigh customers consider only marginally of import. An essential ingredient of the audit is, therefore, to understand the relative importance of diverse customer services to current and potential customers. Distinct customer segments tin often be identified co-ordinate to the priorities they attach to particular services.
What are your customers' service demand patterns?
The level and nature of customer service needed often change over the product'due south life. Services that are top priority at the fourth dimension of sale may exist less important 5 years subsequently. Companies must understand the patterns and timing of demand for client services on each of their products. These they can graph, as Showroom Iii shows.
Exhibit Three Postpurchase service demands for two products
Product A in the showroom is a security command organisation, an electronics production with few moving parts. A high level of service is needed immediately post-obit installation to train operators and debug the system. Thereafter, the demand for service rapidly drops to only periodic replacement of mechanical parts, such as frequently used door switches.
Product B is an automobile. Service requirements are meaning during the warranty period because of customer sensitivity to any aesthetic and functional defects and besides because repairs are gratuitous (to the client). After the warranty period, however, service requirements beyond basic maintenance will exist more extensive for B than for A, since at that place are more than mechanical parts to wear out.
What trade-offs are your customers prepared to make?
Excellent service can always be extended—at a toll. Y'all should know the costs to your company of providing assorted customer services through diverse delivery systems (an 800 telephone number, a customer service amanuensis, a salesperson) at different levels of functioning efficiency. At the aforementioned time, you lot should found what value your customers place on varying levels of customer service, what level of service quality they are prepared to pay for, and whether they prefer to pay for services separately or as part of the product purchase price.
Customers are likely to differ widely in cost sensitivity. A printing press manufacturer, for case, has plant that daily newspaper publishers, because of the time sensitivity of their product, are willing to pay a high toll for firsthand repair service, whereas book publishers, being less time pressured, can afford to be more cost witting.
The Customer Service Program
The success of the marketing program volition depend as much on effective implementation as on audio analysis and research. Afterward reviewing several customer service operations in a variety of industries, we believe that managers should concentrate on the following vii guidelines for constructive program implementation:
i. Educate your customers. Customers must be taught both how to utilize and how not to use a production. And through appropriate training programs, companies tin can reduce the chances of calls for highly trained service personnel to solve elementary problems. General Electrical recently established a network of product instruction centers that purchasers of GE appliances can call toll complimentary. Many consumer problems during the warranty menstruum can be handled at a price of $v per call rather than the $30 to $50 toll for a service technician to visit a consumer's home.
2. Educate your employees. In many organizations, employees view the customer with a problem as an badgerer rather than as a source of information. A marketing programme is often needed to change such negative attitudes and to convince employees not only that customers are the ultimate judge of quality merely also that their criticisms should exist respected and acted on immediately. The internal marketing program should comprise detailed procedures to guide customer-employee interactions.
3. Exist efficient showtime, overnice 2d. Given the option, most customers would rather take efficient resolution of their problem than a smiling confront. The 2 of form are not mutually exclusive, simply no company should hesitate to centralize its customer service operation in the interests of efficiency. Federal Express, for example, recently centralized its customer service role to amend quality control of customer-employee interactions, to more easily monitor customer service functioning, and to enable field personnel to concentrate on operations and selling. The fear that channeling all calls through three national centers would depersonalize service and badger customers used to dealing with a field function sales representative proved unwarranted.
4. Standardize service response systems. A standard response machinery is essential for handling inquiries and complaints. L.L. Bean has a standard form that client service personnel use to embrace all telephone inquiries and complaints. As noted before, the documented information is immediately fed into a calculator and updated daily to expedite follow-through. In addition, most companies should establish a response system to handle customer issues in which technically sophisticated people are called in on bug non solved within specific time periods past lower-level employees.
5. Develop a pricing policy. Quality customer service does non necessarily mean free service. Many customers even prefer to pay for service beyond a minimum level. This is why long warranty periods often have limited appeal; customers recognize that production prices must ascent to cover extra warranty costs, which may principally do good those customers who misuse the product.10 More important to success than costless service is the development of pricing policies and multiple-option service contracts that customers view every bit equitable and easy to empathize.
Considering a separate market exists for postsale service in many product categories, running the customer service operation as a turn a profit heart is increasingly common. Only the philosophy of "selling the product cheap and making coin on the service" is likely to be self-defeating over the long term, since information technology implicitly encourages poor product quality.
6. Involve subcontractors, if necessary. To ensure quality, most companies adopt to have all customer services performed past in-business firm personnel. When effectiveness is compromised as a result, however, the company must consider subcontracting selected service functions to other members of the distribution aqueduct or to other manufacturers. Otherwise the quality of client service will pass up as an aftermath of cost-cutting or attempts to artificially stimulate demand for customer service to use slack chapters. Docutel, the automated teller manufacturer, for case, transferred responsibility for customer service operations to Texas Instruments because servicing its modest base of operations of equipment dispersed nationwide was unprofitable.
7. Evaluate customer service. Whether the customer service performance is treated as a cost center or a turn a profit eye, quantitative operation standards should be set for each element of the service package. Do an analysis of variances between actual and standard performances. American Airlines and other companies use such variances to calculate bonuses to service personnel. In addition, many companies regularly solicit customers' opinions about service operations and personnel.
In conclusion, we must stress that responsibility for quality cannot rest exclusively with the production department. Marketers must also exist active in contributing to perceptions of quality. Marketers have been too passive in managing quality. Successful businesses of today will utilise marketing techniques to plan, blueprint, and implement quality strategies that stretch beyond the factory flooring.
References
1. Results of a Wall Street Journal:-Gallup survey conducted in September 1981, published in the Wall Street Journal, October 12, 1981.
2. Results of a survey conducted past the American Society for Quality Control and published in the Boston Globe, Jan 25, 1981.
three. 1981 survey data from Appliance Manufacturer, April 1981.
4. John Holusha, "Detroit's New Stress on Quality," New York Times, April 30, 1981.
five. Norman B. McEachron and Harold South. Javitz, "Managing Quality: A Strategic Perspective," SRI International, Business Intelligence Program Study No. 658 (Stanford, Calif.: 1981).
6. John F. Welch, "Where Is Marketing Now That We Actually Need Information technology?" a speech presented to the Conference Board's 1981 Marketing Briefing, New York Metropolis, Oct 28, 1981.
7. John Holusha, Ibid.
8. Neb Abrams, "Inquiry Suggests Consumers Will Increasingly Seek Quality," Wall Street Journal, October 15, 1981.
ix. Daniel Yankelovich, New Rules (New York: Random House, 1981), p. 182.
ten. For evidence of this fact, see John R. Kennedy, Michael R. Pearce, and John A. Quelch, Consumer Products Warranties: Perspectives, Issues, and Options, report to the Canadian Ministry of Consumer and Corporate Diplomacy, 1979.
A version of this article appeared in the July 1983 effect of Harvard Business Review.
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Source: https://hbr.org/1983/07/quality-is-more-than-making-a-good-product
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