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Jeff Dewar

Quality Insider

How to Exceed Customer Expectations

A formula for going beyond just “satisfaction”

Published: Monday, January 7, 2013 - 13:34

To begin, let’s use the right words. Instead of just talking about “exceeding expectations” or “customer satisfaction,” try including these in your customer vernacular: Impress. Surprise. Delight. Enchant. Bewitch. And my favorite… dazzle.

For example, instead of asking the product packaging team: “How can we exceed our customers’ expectations?”

Rather, run this by them:
“Think of the word ‘dazzle.’ When a customer opens our shipment of widgets, how can we make them pause for three seconds, and with a grin on their face whisper under their breath, ‘Those clever little fellows... brilliant.’ ”

Regis McKenna, Tom Peters, Steven Covey, Ken Blanchard, and many others have spoken eloquently about the utter irrationality and absurdity of customer perceptions. How can two competing companies have such wildly different customer perceptions? Even more bizarrely, how can the company whose performance is slightly weaker than its competitor be viewed more favorably by its customers? Answer: Because it’s not just about the hard metrics of performance; it includes the byzantine web of the customer’s expectations—and how the supplier manages them.

Years ago, I worked with two different suppliers to get quotes for two engineering projects. One supplier clearly had superior skills, but it was the other guys that we chose to work with. Why? Because of how they communicated with us, consulted on options, and their attitude of, “Yes, let’s figure out how we could do that.” The other guy treated us as though he was from a morally superior civilization. And that is the simple reality: That expectations are a mix of thousands of inputs, some logical and others purely emotional with no basis in rational thinking.

What this all boils down to is a simple equation.

Which means, arithmetically speaking, there are only two ways to raise customer perception: Increase the value of what you deliver or reduce the expectation. And here’s the critical key: You are significantly in control of each variable.

Since there is a cultural value to converting the words into symbols (it helps the concept take on a more formulaic feel) and because it's a practical shorthand, let’s make our formula look like this:

 

As an aside on the cultural importance of expressing concepts as formulas: Federal Express achieved enormous traction in getting their people to understand that quality improvement would not kill productivity. Fred Smith, the founder of FedEx, became very frustrated when speaking to FedEx groups while trying to evangelize the importance of quality, because he’d typically get pushback from the audience with questions like, “We all know that quality is important, but this company was built on productivity. Do you want quality, or productivity?” The question, of course, was conveying the deep-seated belief that they are mutually exclusive. He therefore came up with a symbolic equation:

Quality improvement equals productivity improvement. Smith went on to explain that he didn’t think his board of directors would be very happy if their quality was significantly raised but the company went broke because their productivity dropped through the floor, or, conversely, that their cost savings through productivity gains were fantastic, but they lost all their customers because their quality tanked. The Q = P equation became an excellent symbol of a new way of thinking, as can the CP = D/E when it comes to managing customer expectations.

An example: Buying a car

The CP = D/E relationship happens all the time. Let’s use one of the simplest metrics in a basic customer service scenario—time.

My friends, Bob and Muriel, a husband and wife of mutual means, decided to look for new car but couldn’t agree on what to buy due to a mix of stylistic, economic, and green reasons. Their discussion turned into a debate, and then bordered on an argument. Bob wanted a minivan; Muriel wanted an SUV. In a gesture of devotion to the marriage, they each decided to purchase their own car.

They’re each a loyal lifelong customer of their respective banks and on a Monday morning dropped by to fill out an application for their new car loans. Bob’s bank promised to make the funds available by 4 p.m. that day. Muriel’s promised an answer by 9 a.m. the next morning.

They met for lunch on Monday and engaged in healthy spousal banter about their new cars, with Bob teasing his wife that her lethargic bank didn’t hold a candle to his bank’s speedy service, and that he’d pick up his new minivan that night.

As promised, Bob’s bank called him at 4 p.m., right on time, to tell him the loan was funded and he could pick up his minivan. Then at 5 p.m. Muriel’s bank called and told her that her loan was funded, and if it was convenient, she could pick up her new car immediately.

There was spirited repartee at their house that night after Muriel rolled up in her new SUV, parking it alongside her husband’s new minivan in the driveway just minutes after Bob got home.

Here’s a summary of the timetable:

Spouse

Applied for loan

Promised completion
(Expectation)

Actual completion
(Delivery)

Bob

Monday 9 a.m.

Monday 4 p.m.

Monday 4 p.m.

Muriel

Monday 9 a.m.

Tuesday 9 a.m.

Monday 5 p.m.

You can ask two fundamental questions about the customer experience:

1. Which bank processed the loan faster in raw hours? Answer: Bob’s bank, by one hour.
2. Which bank left its customer with a greater sense of surprise and delight? Answer: Muriel’s. (Illustrated by her happy dance in the driveway.)

 

In this very simple example, Muriel’s bank changed the value of our equation by delivering faster than expected, and the expectation was formulated by whom? Her bank! In other words, the bank kept the D constant while reducing the E. One could look more deeply and imagine that the bank fully expected that it could process the loan by Monday at 5 p.m., but it wanted to leave some wiggle room in case something went awry, as well as provide an opportunity to potentially surprise its customer.

Remember, there’s no need to fudge the numbers; all you need to do is provide the longest estimated wait time, not the average, and you’ll naturally have a number of instances where customers end up with their desired result more quickly than expected.

Time is by no means the only metric. This same principle can be applied to metrics of accuracy, the enjoyment of a training course, level of organization in a project plan, the readability of a technical manual, or the helpfulness of a technical support call. As long as there is a delivery value and an expectation, the equation of CP = D/E exists.

If you think all of this is leading up to a continuing game of improving what we deliver to our customers, while we train them to have higher and higher expectations—you’re right. But wasn’t that an objection from the 1980s that we no longer need to answer in 2013?

Creating quality measures

In order to include the CP = D/E in your quality measures for time-based performance (when less time is considered better service), e.g. your customer satisfaction index, use this formula to give you a percentage of how much you exceeded (or failed to meet) a customer’s expectations. A value of 100 percent means that you met them perfectly.

Let’s plug in the numbers for an expected wait time of 10 minutes to check in at a hotel, but where the customer actually got through the line in six minutes.

The answer is 140 percent. You exceeded the customer’s expectation by 40 percent. However, imagine a situation where it took 12 minutes to check in. You fell short of the customer’s expectation by 20 percent. Another way of expressing it is that you met only 80 percent of her expectation. It just depends on how you want to display the results and communicate them.

It’s not a complicated task to construct other formulas for different scenarios where the D and E are based on criteria other than time. I’m sure you can think of several right away. Share them with us. Meanwhile, I’ll have to end this article now. I’m off to see that our customers are satisfied... I mean dazzled.

Discuss

About The Author

Jeff Dewar’s picture

Jeff Dewar

Jeff Dewar is CEO of Millennium 360 Inc., Quality Digest’s parent company. During his career he has presented quality-related topics to thousands of people on six continents, all but Antarctica.

Comments

you had me there for a while

The beginning of your article was great. You brought in the attention of the marketing, sales, as well as production departments - then I think you got carried away with your formulas. This might be intriguing for us Quality people but for the rest of society it just seems drab. Anyway it was still a good article- thanks