quality in customer services. a company can improve her results considerably, by focusing on quality...

Export MarketingVeikko Laine

Quality in Customer Services



A Company can improve her results considerably,by focusing on Quality in her Customer Services

Future companies, that will thrive:

Production decentralization

Company

Future Company

A

B

C

D

1

2

3

Subcontractors Customers

Now In the Future

Integration of info activities


Quality in Customer ServicesA Company can improve her results considerably,by focusing on Quality in her Customer Services

BUT What is/are

- Quality ?- Customer ?

- Services ?


Of course, giant companies have the access to better up-dated and more accurate information from their special market research departments. They have also

the possibility to affect and mould the market, - from its macro level.

ProblemCan one compete victoriously with International Giants ?

Can one start from the periphery and become a Major Player ?How ?

Background In the 80-ties, the company was a local actor. It was far away

from the market mainstream. Turnover rested at some 0,5 MEUR.

At the market, there were well known names: Siemens, Philips, AEG, ABB, GEC… Giant companies have many advantages. They can offer

complete solutions on a turn-key basis. They can provide BOF financing packages, (BOF = Build, Operate, Finance), worth hundreds of millions.

All actors (”competitors”, if you like) have the same market information.

Example : Quality in Customer Services


How was this info converted into victorious actions?

Situation in the mid-90ties.

Company turnover grew > 10-fold. Number of personnel remained the same. Operations were highly profitable.

The company was now, in its field, third largest on the world market.

What was behind the success ?

Was there something in the market information, that gave a clear competing edge?

Was there something in this info… - that others did not notice?

Example : Quality in Customer Services cont.



…general market info… ??…all companies had ”roughly” the same market information…



…general info… ?? => to start with, everyone has the same!!

Painting by Bev Doolittle: ”The Forest Has Eyes”

…but some can notice more than others…



…general info… ??…all companies have ”roughly” the same info…

BUT…the winner has a clearer picture of…

- Quality- Customer- Services

…and knows to act accordingly…


MarketMarket Potential Total business > 20 Billion ECU / yr

New Airports ~ 100-150 / 10 yrsAirtraffic growth : ~ doubles / 10 yrsThe Market is ”steady” and Growing

”Customers” The Airport is a business entity. People are technically minded, safety conscious, conservative

Product Same need => Solution => Same Product …copying… ”Same Customer” ( > 30 000 / 3 000 same customers) Heathrow = Beijing = H:ki Vantaa = Oulu

Price Airport is the ”Show Window” of the area… Money no problem

”Competition” Very strict international specifications. Special market, …difficult to enter… Competition is tough for ”outsiders””Insiders” ~ 3 000 companies, => 1 300 Suppliers / 800 Consultants / 300 Contractors …how to win…

= International Airports



Example of an Offer Request by a consultant


- Quality ?- Customer ?- Services ?

QUALITY =




Quality = The pure concept has been deteriorated. It has become neutral, …”grey”…

…nobody really knows what it is…

…quality is like …”XXXXX ”… Everyone likes it… everyone talks about it… everyone does it… everyone knows how to… everyone thinks it comes by nature,-as by itself… so, why should one study it, - and learn more… IF problems occure, - the fault is ALWAYS on the side…

=> it is the partner, - not me.

Quality = ??



Quality =?

Quality ?

Product quality = Design quality x Production q. x Marketing q. x Customer Service q. x etc. Suitability for use Market Research Production Facilities Market Research Service Organization Performance R & D Production Technology Verifying the Need Service actions, steps, measures Usability Design systems, process Personnel Giving of Promises Training, User Hand Books Outer Design Specifications Training Keeping of Promises Supplying of Spare Parts etc. etc. etc. etc. etc.

Or, it can be: …

as an example



Quality ? cont.

Environmental Quality (…product life cycle...) Value Quality (costs/benefits) Competition Quality (better/same/worse) etc. Or Search Quality (can be evaluated in advance) Experience Quality (during usage) Credence Quality (will be known after buying)

Or Efficiency (no waste of resources, input/output ratio) Testability (produces data which can be evaluated) Modularity (functions as a part of an another system) Flexibility (can adapt to usage, environmental etc. changes) Vulnerability (can resist, crime, vandalism, misuse…) Usability (no extra workload for the user, …no special skills…) etc. etc. etc.



Quality ? cont.

Quality :

…the ability, of the Product, to fulfil the

Customer´s

needs, …wishes and expectations …



Quality ? cont.

Quality : …the ability of the product to fulfil the Customer´s needs

…wishes and expectations …

Does the Customer know his/her needs, wishes… expectations… ???

Then who should know?

The Seller must understand that -QUALITY- consists of many factors



Quality

Technical Quality Commercial Quality

Which one is cheaper to gain?

Which one gives a better price ?



Quality

Technical Quality Commercial QualityCompare Cosmetics:

At our factory, we fill jars

In the Boutique, we sell dreams

Which Quality is cheaper to get, which one gives a better price & a more content Customer ?

Which should be focused on?And, who judges the Quality ?

Who´s opinion counts ? The Factory´s or, - the Customer´s?

Quality

Technical Commercial

Intensive work with technical and material systems

Intensive interaction withpeople

…non-living, no free will, predictable…

…living, free will, unpredictable…

Conformance with requirements Fitness for intended use

Drawings and specs Needs, wishes, expectations

Operating Prototype Value for the Customer

Tests acc. to tech. requirements Customer satisfaction …can be measured… …difficult to evaluate…

Quality :Fulfilment of specs Customer experience “Do Things Right” “Do Right Things”

…devil lurks behind the tiny details

”simple” …complex



Quality

One cannot talk about Quality, without thinking simultaneously and unconsciously about - The Product

Quality & Product are like Siamese twins, - they live in symbiosis, - not one without the other.

PRODUCT =


”Product” = ?

- What the producer produces and markets

- What the customer buys

- Tangible & Intangible

- Concrete & Abstract

- Material & Immaterial

- Goods & Services

- Technical quality & Commercial quality

A ”product” has the following characteristics :

A ”product” is the combination of these two.

…do these two match…?

- Visible & Invisible



Compare :

”Product” = ? Cont.

A car, an automobile ?A car is much more than, …four wheels and a motor. It represents :

VW : …”a huge emotional value, which makes adrenaline flow”…

GM : …superior visual sensations. Driving : - even stronger experiences”…

Jaguar : …”a strong statement”…

…car, - is a message…

…and so are all products…

“Products” are simultaneously concrete & abstract. => Customer´s Decision-making…

…of the “owner”…

…to / from the “owner”…



Quality in Customer services

CUSTOMER

”Characteristics”


The Customer / theory In a transaction, who is actually the Customer ?

The Customer :

- Is always right …

- Is part of our business, not an outsider

- Is a person (group of persons), not a company

- Is not someone to match wits with

- Is not dependent on us – but we on him

- Is the fellow who makes it possible to pay our salaries

- Is a human being like ourselves, with the same feelings and emotions

- Is the life–blood of every business

Quality ?

- Is not so stupid as one may think, …but…

External vs. InternalCustomer

- Is the King


The Customer is the most important person in any business.

-The Buyer needs two eyes, …the Seller can do with one… old chinese prowerb

- Caveat emptor => Let the buyer be aware

- Money distorts ”Buyer–Seller” role-distribution, …AND general THINKING

”…got this invitation to a real-estate business seminar. Just wonder what it is good for…!?

Europeans traded Manhattan for trinklets, glass beads etc. worth some 25 USD. The native indians just could not understand that one can attach ownership to Nature, Earth, Water, Wind, Rivers, Rain, Air, Space, Moon, Planets… This ownership thinking, was not in their culture. Honesty?

Target: Win-Win =>…symbiosis…

The Customer / reality

External/Internal Customer


Caveat Emptor, ”let the buyer be aware”

There are several reasons why ”The Seller” is thought of negatively.

-Inbalance in knowledge- The Seller ”knows” the needs, wishes and exp. better than the Buyer.- The Seller knows the product better (…faults, mismatch of need-product.)

- The Seller has a better training of psychological methods

-Company internal culture- High pressure selling- The Seller is more active of the two (…aggressiveness…)

- The Seller may misuse ”social courtesy”

- The Seller may misuse ”legal technicalities”

-MONEY distorts logical, rational thinking !!!! (…emotions…) - e.g. a ladies handbag = 2000 EUR ? …misuse of ”stupidity”… ?

- The unfortunate truth is that there are also dishonest sellers

…knowing this, - what should You do ?



Quality in Customer services

Customer, - internal Customer

In addition to external Customers, the company has …internal Customers

Inside the company: ”…the result of your work, is the raw-material needed by the next person in line, - your co-worker…”

The company employees are all Customers to eachother.

Your co-workers are your Customers, as you are their Customer

Are you giving ”Quality Products” to them, - are they to you?

Who judges/defines ”Quality”? You or… ??


In addition to conflicts that arise from personal differences, there are company internal sources that automatically cause tensions :

Function Their Emphasis Marketing

Production Customized models / orders

Internal Customer

Standard models / orders Long prod. runs / few products Short runs / many products No product changes Frequent product changes Stiff production schedules Flexible production schedules Long delivery times Short delivery times Ease of production Solving customer wishes Standard quality control Special quality control

Engineering Functional / tech. features Sales / customer wish features Few models/standard components Many models / custom comp .

Long design lead times Short design lead times

Standardized design procedures Ad hoc / liberal design proc

Source: Philip Kotler, ”Diagnosing the Marketing Takeover” Harvard Business Review


In addition to conflicts that arise from personal differences, there are company internal sources that automatically cause tensions :

Function Their Emphasis Marketing

Broad product line

Internal Customer

Fast moving items/few products Economic levels of stock Large stock levels (del. time !) Standard parts Nonstandard parts Price of material Customer opinion of material Purchasing at determined times Immediate purchases

Accounting / Finance

Standard transactions Many reports Few reports Special terms & discounts

Hard and solid budgets Flexible budgets acc. to need Pricing to cover costs & profit Pricing to further market dev .

Cont.

Inventory / Stock Management

Full customer credit reports Little customer credit examin . Low credit risks Medium credit risks Tough credit terms Easy credit terms

Tough collection procedures Easy collection procedures

Source: Philip Kotler, ”Diagnosing the Marketing Takeover” Harvard Business Review



Customer…”Customers” you find everywhere… …they are like grains of sand on a beach…

As a human being, you have both internal & externalCustomers

- As an external Customer you have the environment, - NatureService it well, and it will serve you…

- As an internal Customer, you have yourself, - your body and soul

Or you can pollute your external Customer, the environ

Service them well, and they will service you…Or, you can pollute your internal Customer, - iyourself.

- Your body- Your soul



Services

Earlier we noticed that the Product has a Janus-face, i.e. it has two characteristics:

It can be : Goods and/or Services

SERVICES =


Product ? What the seller sells ?

What the buyer buys ?

Goods Services

Visible, concrete Invisible, abstract

Facts, reasoning, intellect Image, feelings, emotions

Production \ Marketing Selling = Production

Marketing \ Consumption Production = Consumption

Producer produces Buyer participates in production => co-production, co-operation

- who is the Customer ?



Product ? cont.

Goods Services

Owner of the Product is either the Producer or the Customer

Owner of the Product is :

The Customer AND the Producer

Customer feed-back, afterwards Customer feed-back, immediate

Product changes are slow Product changes are rapid

Personnel => Technology Personnel => Attitude

Mastery of Production Mastery of Interaction

”Product” knowledge Knowledge of ”Product” AND human relations

Customer decisions Y/N Customer decisionmaking iscontinuing all through the proces



Product ? cont.

Goods Services

Decisions are made high-up in the hierarchy

Decisions must be madelocally & promptly

Production personnel must learnto work with technical questions

Personnel must also learn the very character of services

Products are produced Services are –performed- bythe buyer and the seller

Product = Goods + Services => X

…devil lurks behind the tiny details

Services => To make it ”easy” for the Customer



SERVICESWhat are services ?

- Perhaps it is easier to answer, ”WHY” - need services?

REASONS : - To make things ”easy” for the Customer /

- What might these ”things” be ?

- Too difficult (C. does not have the needed knowledge/expertize/tools/workforce…)

- Too expensive (C. does not have the necessary resources vs. need… Airplane vs. seat)

- Too big (C. needs but a small portion. Not the Scyscraper, - but an appartement…)

- Too dangerous (C. appreciates someone else to take the risk)

- Laziness, loving of Comfort (”Jet-Set”, => have someone to -”serve”- you)- Any difference in so called ”cultural barrier”

- What else ?

- Physical/mental differencies (…inabilities…)- Logic of the line of business is …unknown- ”I need it now” (the shop opens at…=

- ”I need it here” (the nearest shop is in…)

Differencies in Information content !



SERVICES = ”Product” (=>Visible + Invisible)

Services => …help the Customers…

…services are everywhere… …we are surrounded by them… - without noticing them, - perciving them... they are taken for granted?

Services = “Product” => Visible + Invisible. (What might be the Invisible part of Services in above pics?)


Services = ”Product” (=>Concrete + Abstract)

”Services” is a co-operation process where both the Seller & the Buyer participate

Temporal process :

1) …build-up of customer expectations… (how do you control / know? 80/20 … high / ”normal” / low…)

2) ”Physical” (e.g. P-2-P) contact, roles start to develop (…compare : dogs )

3) Acceptance of the roles… (…w/o acceptance, …understanding… compare Rodeo)

4) Performance of activities (…in co-operation… leadership …Rodeo)

5) End phase, …getting apart… (memory build-up…)

6) …temporal continuum… (next encounter, and next ,and…)

Services => …to make it “easy” for the Customer…

(Visible + Invisible)

Export MarketingVeikko LaineExport Marketing

Veikko Laine


Services = ”Product” (=> Concrete + Abstract)

”Services” is a co-operation process where both the Seller & the Buyer participate

Co-operation => Interaction =>

& Leadership

CUSTOMER & styles of participation

Situation at the beginning of the co-operation process : Customer is “fearful”, (s)he feels uneasy (…mismatch of “products”…) => Inform what is happening / going to happen (in the serviceprocess), and - what the Customer is expected to do.

The Customer should feel that (s)he IS IN CONTROL of the process => “safety”

How do you inform the Customer what (s)he is expected to do ?…earlier experiences, …signs, …written material, …lay-out of premises, …P-2-P contact…

…however… …(s)he wants , ...appreciates to be …lead… (…make it “easy”…)

Distribution of work activities, - who does what /w/h… ?

(Visible + Invisible)

…compare Airport Check-In…


Services & styles of Customer Participation

1. Specifier- specifies the services (s)he wants… …production & co-operation…

2. Developer- gives suggestions of how to improve the services, and participates in the R&D and production work

3. Controller- controls / supervises the quality of the services (s)he receives

4. Producer- at the extreme, the only person in the service production

5. Consumer- uses the services all through the production process

6. Promoter- often the best salesperson of the service producing organization

Active - Passive, …Aggressive, Social, Dominating, Supportive, Driven by special interests…

Participation is often rather loaded with EMOTIONS


Services = ”Product” (=> Concrete + Abstract)

Characteristics of good services :

1) Credibility 2) Prof skills => task & personal

3) Thrustworthiness, attitude & behviour 4) Willingness to serve

5) Reach ability 6) Frendliness, caring

7) Communication, interaction 8) Safety

9) ”Understanding” the Customer 10) Material support (…back-stage)

11) Easyness of Customer participation 12) ”Correcting” procedures

13) Control of C expectations, experiencies 14) Control of C participation

Quality is what the Customer experiences all through the process. The Customer evaluates constantly the outcome, - down to the smallest detail of the process.

Devil lurks behind the tiny details !

15) Control of the participation of the other Customers

…emotions…


Example Quality in Customer Services

Ongelma.

Voiko kansainvälisten suuryritysten kanssa kilpailla voitokkaasti ? Voiko periferiasta nousta keskeiseksi tekijäksi ?

Miten ?

Taustaa

Yritys oli 80-luvulla paikallinen toimija. Se oli kaukana tapahtumien päävirrasta. Liikevaihto pysytteli 3 – 4 miljoonassa markassa.

Markkinoilla vaikutti tunnettuja nimiä, Siemens, Philips, AEG, ABB, GEC… Suuryrityksillä on monia etuja puolellaan. He voivat tarjota asiakkailleen kokonaisratkaisuja ”avaimet käteen” – periaatteella. He voivat tarjota satojen miljoonien BOF rahoituspaketteja (BOF = Build, Operate, Finance). Kaikilla kilpailijoilla on samat markkinoita koskevat lähtötiedot. Tosin, suuryritykset saavat tuoreemmat ja tarkemmat tiedot erityisiltä markkinatutkimusosastoiltaan. Heillä on myös mahdollisuudet vaikuttaa markkinoihin – niiden makrotason kautta.

Tilanne 90-luvun puolessavälissä

Yrityksen myynti kasvoi yli kymmenkertaiseksi. Henkilökunnan määrä pysyi samana. Toiminta oli erittäin kannattavaa. Yritys oli alallaan noussut maailman kolmanneksi suurimmaksi.

Mihin yrityksen menestyminen perustui ?

Oliko yleisissä lähtötiedoissa jotain sellaista josta sai selvää kilpailuetua ? Oliko tiedoissa jotain… - mitä muut eivät havainneet ?

Miten tämä tieto realisoitiin toiminnaksi ?

Voiko vastaavanlaista tiedon analysointia ja jalostamista käyttää siten että saa kehitettyä voittoisia suunnitelmia myös muille aloille ? Miten ?

Kansainväliset lentokentät

Markkinapotentiaali

> 20 miljardia Euroa / vuosi Uusia lentokenttiä n. 100-150 / 10 vuotta lisäksi laajennoksia, uudistamisia Lentoliikenteen kasvu : kaksinkertaistuu joka 10:s vuosi Markkinat ovat vakaat ja kasvussa “Asiakkaat” Lentokenttä on liikeyritys.

Asiakkailla on tekninen tausta, he ovat turvallisuus- painotteisia, vanhoillisia

Tuote Sama ongelma = ratkaisu = tuote …monistaminen…

"sama asiakas" (> 30 000 / 3 000 samaa asiakasta) Heathrow = Beijing = H:ki Vantaa = Oulu Erittäin tiukat kansainväliset standardit ICAO / FAA Hinta Lentokenttä on alueen “näyteikkuna”. ”Money no problem” Kilpailu Tiukat kansainväliset standardit ICAO / FAA Vaativa erikoisala, uusien toimijoiden vaikea tunkeutua Kilpailu on ulkopuolisille kovaa

”Sisäpiiriläisinä” on n. 3 000 yritystä, joista 1300 tavarantoimittajaa / 800 konsulttia / 300 urakoitsijaa

Services : Help the Customer, make his / her work easy => ex. remove the cause of irritation

Quality : Customer evaluates,- not only the company

Customer : Know them, ex. …what disturbes them

This way you will get => Quality in CustomerServices

Great growthHow was it done?

Tough tech requirementsCustomer knowledge?

Expensive. Reports, plansNo concrete products to install


QUESTIONS ?

…in a transaction, who is the Customer ?

quality in customer services. a company can improve her results considerably, by focusing on quality...

Documents

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customer services slide

market information slide

customer services general

customer services examp

world market

market mainstream

isare quality