In the past 30 years, management theories have been rewritten, established models torn up and new approaches to management developed because of two important reasons. First, services have overtaken manufacturing to become the prime engine for economic growth, including in India where it accounts for over 50 per cent of GDP. Second, management and delivery of services is as different from management and distribution of products as the latter was different from farming.
Among the many fundamental differences between products and services is the difficulty faced by organisations in obtaining meaningful and adequate feedback from customers. As customers, when we are unhappy with a tangible product like a car or a computer, we find it easy to demonstrate to the seller that we do have a problem, since we have tangible evidence to support our complaint. An engine that does not start on a cold winter morning or a TV that has wavy images can be shown to the seller. However, when we receive poor service, we are reluctant to complain, partly due to the fact that there is nothing tangible left to use as “evidence”. According to well-established research findings, a mere five per cent of customers receiving poor service bother to complain.
The reason why there can be no warranty for service is that while a bad product can be replaced, a bad service cannot be, as it is consumed on delivery. Only a superb recovery can persuade the customer to forgive the first trespass. But that is possible only if organisations get very smart in encouraging customer feedback. Good service organisations, therefore, view customer feedback as very precious, and seek it as if they are searching for gold nuggets. The very survival of service businesses depends on how well they tune in to customers’ feelings. Here are a few methods.
To start with, regular, and even mandatory, presence of top management at the coalface is a must. Federal Express has a system by which top management salaries are not reviewed if they fail to record 12 days a year performing front-line jobs. Organisations like John Lewis partnership use focus group discussions with randomly chosen customers to encourage spontaneous feedback. Mystery shoppers and ghost audit programmes are also very common these days. Websites are provided by the better organisations to make it easy for customers to give feedback or complain.
However, the cheapest and most effective way of listening to the customer is to encourage front-line staff to become the eyes and ears of management, as they are well aware of the failed “moments of truth”. At very little cost and in very little time, this method can be put to effective use, provided management encourage front-line staff to record and escalate customer feedback. In a research project I supervised at Daimler Benz in Hamburg, we asked front-line staff to fill a customer satisfaction survey by second-guessing customers. Their guess was startlingly close to what the market research agency had reported based on an expensive survey of customers’ views.
Unfortunately, as most organisations believe that customer complaint reduction is an indication of good performance, there is reluctance on the part of organisations to record customer complaints — let alone allow employees to register customer complaints on their behalf. Employees are quite often scared to add to this negative score, and try their best not to record or escalate customer complaints in such organisations. Here is a recent example of this phenomenon.
I submitted all papers required for direct debit of my phone bills to Company X four months ago. Yet, I kept receiving SMS messages and telephone calls, sometimes three a day, warning me of dire consequences if my monthly bills were not settled forthwith. I went again to X’s local office to complain to the front-line lady, attempting to not only ensure the direct debit payments but also sort out the nuisance of follow-up messages and calls. Nothing happened and the same problems continued for another three months. For fear that my phone, internet connectivity, etc would be cut off, I paid the collection agents for three more months. However, that did not provide me with a respite from the nuisance calls and SMS messages. I told the callers at least a dozen times that I was an irate customer and wanted their Customer Services Director to call me. Each time, I was told they couldn’t do it. Some even said they were not allowed to do so.
I went again with the receipts of these payments to the local office. While the front-line employee seemed genuinely sorry for me and was trying to do what she could to help, she appeared quite helpless when it came to solving my problems. She appeared to have no one to approach to tell him or her I was one very unhappy customer. Nor would she give me her name so that I could call again to check on the resolution of my problem. Apparently, the company does not want its customers to have access to anyone at all within their organisation to voice their complaints.
In organisations such as Singapore Airlines (SIA), which view information on customer dissatisfaction as valuable data to make a good recovery through speedy resolution of customer problems, exactly the opposite happens from what happened to me with my phone company, one of India’s biggest telecommunication companies. Employees in SIA are assured that even if they were the cause of customer dissatisfaction, they would be thanked – and not punished – for registering and escalating customer complaints.
Only ineffective service organisations view the double negative measure of customer complaints reduction as an indicator of good performance. For those who doubt this, the case of Pan Am might be a good eye-opener. They recorded zero complaints from customers for three months; a score that Six-Sigma advocates would view as the Mount Everest of achievement. Unfortunately, Pan Am registered this astonishing score in the last quarter before they went down the tube. The real reason for zero complaints was that customers had given up on Pan Am and understood the futility of complaining.
After half-century of the service revolution, to assess customer satisfaction by measuring customer complaints reduction is surely an indication of an antediluvian management. It is about as foolish as viewing total silence between a husband and wife as a sign of marital bliss.
The writer, a former corporate executive, was the founder-director of the Centre for Service Management at the University of Buckingham, and is now MD of Chennai-based VSM Consulting Services.
mahesh@vsmahesh.com
