Where to Invest:

Customer Service or Service Quality?

 In many cases we have seen suppliers with customer problems make the assumption that they need to have better, more empathetic customer service people and that will somehow fix the ongoing customer problem. Our experience has been that, only in rare cases will this investment-be it in training, hiring, whatever-- pay off.

When customer relationships begin to be troublesome, the investment we have found that is critical is an investment in Service Quality. Valarie Ziethaml[1], in the late 1980's was able to isolate the five elements of service quality, from most critical to least critical:

1. Reliability: the ability to provide what was promised, dependably and accurately
2. Responsiveness: the willingness to help customers and provide prompt service
3. Assurance: the knowledge and courtesy of employees and their ability to convey trust and confidence
4. Empathy: the degree of caring and individual attention provided to customers
5. Tangibles: the physical facilities and equipment and the appearance of personnel

Note that empathy (how many businesspeople tend to think of customer service) is fourth out of five characteristics. The two most critical are reliability and responsiveness and the only way those happen is by investing in systems to make sure people live up to their commitments as well as be responsive to customers. Be it a system to make sure that every customer promise is captured and an alarm that goes off if the promised time is about to lapse or getting supplier service people out to the customer location to fix whatever problem they are facing, the delivery systems need to be designed/redesigned to meet customer expectations. In other words they need to deliver service quality. 

Before you invest in customer service, be sure in your own mind the goal you are trying to achieve. Hiring or training great customer service people may help them meet the needs of customers but is that the key or is meeting and exceeding their critical expectations. For that, you need to achieve service quality.

[1] Zeithaml, et al., Delivering Service Quality. (Free Press, 1990)

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