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by Craig Cochran

 



Listening to Feedback

A customer and Baldrige examiner discusses Ritz-Carlton quality.

 by William J. Kalmar

Customer feedback is obviously an important part of the improvement process at The Ritz-Carlton. Simon Cooper, president and chief operating officer, says, “When it comes to customers, feelings are facts.” The Ritz-Carlton deploys multiple methods to capture the customer experience, such as comment cards and a follow-up survey call to guests after their stay. In addition, Ritz-Carlton staff discreetly observe, listen, and ask for feedback during transactions to build upon The Ritz-Carlton knowledge-management system. Follow-up surveys conducted by Gallup provide third party validation. Finally, mystery shoppers circulate though the various properties to critique the processes.

Asking questions prior to a transaction also help Ritz-Carlton deliver exemplary service. On a recent dinner visit, knowing that my wife and I were celebrating our 44th anniversary, the hotel gave us complimentary champagne and offered free dessert. The wait staff even brought out a plate with our names and anniversary date inscribed in chocolate. The next morning when I saw one of the wait staff who handles breakfast, she asked me how I enjoyed the Dover sole. I asked how she knew that I had dined on Dover sole, and she said that it was her responsibility to make sure that Dover sole was on hand because I had requested it. That says quite a bit about surveying customers at the time of a reservation and then following up on it.

About the author
William J. Kalmar has been a member of the Malcolm Baldrige National Quality Board of Overseers and a Baldrige examiner. He is also a mystery shopper for several companies.

 

As quality practitioners, we’re accustomed to measuring the physical attributes of a product: dimensions, angles, power, hardness, tensile strength, color, and many other characteristics. Getting a handle on services can be more difficult. Often there are no physical attributes to measure, or they don’t clearly affect the essential nature of the service. We have to think about what really matters to the customer about the service. Although this is the case with both goods and services, it takes on special significance with a service. Let’s examine the nature of services and discuss the most effective ways of gauging their effectiveness.

The first thing to keep in mind about the service sector is that it is completely different from manufacturing. The things that you take for granted in manufacturing simply don’t exist in many service situations. Consider:

You control the environment. Even if you subcontract manufacturing to an outside firm, you can still stipulate the environmental conditions. With a service, the environment is often dictated or strongly influenced by the customer. You must adapt to these environmental issues, which can be a huge challenge.

The customer usually isn’t present. Sure, the customer’s presence is felt through specifications, tolerances, and product requirements, but the customer isn’t standing in front of you or peering over your shoulder. With a service, on the other hand, the customer is front and center. He or she is right there, throwing curve balls and changing requirements midstream.

 

For these reasons, service provision is radically different from manufacturing. Output measurements that are applied in manufacturing make no sense in a service situation because the customer has such a strong influence over our environment. Think about these traditional measures of output:

Number of customers processed per hour

Minutes spent on each call

Reports generated per day

Average time per repair

Rooms cleaned per shift

 

I’ve seen all of these measures applied aggressively in service environments, and all of them frequently backfired because you can meet output objectives and still generate very low customer satisfaction. That’s why the best way to understand service effectiveness is through customer perceptions.

Customer perceptions are key
Customer perceptions are critical in any product context. In the world of service delivery, they’re especially important due to the personal and interactive nature of services. You may satisfy every stated requirement and still fail to satisfy the customer in a profound way. The ground is shifting as the service is performed, and what you think was perfect may be far from satisfactory. That’s why you must specifically ask your customer what he or she thinks about your services. Don’t provide a long survey that probes every aspect of the service experience; just start with two simple questions: “How satisfied are you with the quality of our services?” and “How likely are you to recommend our services to a colleague?”

These two questions apply to nearly any service situation and industry. The first question addresses basic satisfaction, essentially asking if the services met all requirements. The second question takes this a step further and addresses true commitment: Do you feel strongly enough to recommend our services to somebody else? These represent two different places on the same continuum (as seen in figure 1), and both arenecessary for long-term success.

It’s worth noting that satisfaction falls only in the middle range of the continuum. The blunt reality of business is that basic customer satisfaction is no longer adequate for businesses to remain successful. Basic satisfaction simply means that they might use your services in the future--unless a better offer comes up. Satisfaction is little more than the absence of dissatisfaction, and there’s no glory in just squeaking by. Satisfaction is a reasonable starting point, but the ultimate goal is the kind of commitment that results in customers telling their friends and colleagues about your organization and recommending your services. That’s what you should be striving for.

The two survey questions include a four-point response scale. Some data gurus might question whether this provides much constructive information. Keep in mind, however, that people aren’t reliable measuring instruments. With subjective judgments, four or five degrees of resolution are about as precise as you can expect. Combine the preceding questions with the following two open-ended questions and you’ll have a very useful tool for measuring your services:

How can we improve our existing services? This is one of the simplest yet most effective questions ever conceived. It strikes at the heart of quality: improvement. It gives customers control of the dialogue, and they can do with it what they will. The responses will provide a clear path to making improvements that your customers value.

What services would you like to see us offer in the future? Innovation is the key to long-term survival, and this question enlists your customers’ help in making you an innovator. The range of responses is limited only by your customers’ imaginations.

 

In the case of the open-ended questions, the results can be sorted into similar categories. These can then be plotted on a Pareto diagram to provide guidance on the actions that should be taken. Many quality practitioners bristle at open-ended questions because they don’t produce data in a traditional sense. The responses can be converted to data, however, without much difficulty. Even more important, the results point the way to exactly the improvements and innovations that your customers desire.

You now have a dynamic tool that will take less than a minute of somebody’s time. The scaled questions probe two timeless issues--satisfaction and commitment--and produce solid data that can be tracked, while the open-ended questions provide direction for your improvement efforts. Together you have one of the most streamlined and effective service surveys imaginable.

When to capture perceptions
Ask customers for their feedback as soon as the effects of the service are felt. This might be immediately after performing the service or six months later; it all depends on the type of product you’re addressing and the sorts of contractual obligations that were made with the customer. Consider these service scenarios:

Restaurant. Feedback could be provided immediately following the experience, or certainly within a day or two of it.

Appliance repair. Feedback could be provided immediately on certain aspects of the service, but it would probably take weeks to know how effective the repair was. Most appliance-repair companies warranty their repairs for a certain length of time, so the feedback horizon could follow a similar time frame.

Management consulting. Complex consulting projects that aim to increase a company’s profitability and competitiveness might take up to a year to evaluate. Asking for feedback any sooner would be premature.

 

These three examples illustrate a range of time frames for feedback, from immediately after the service to a year later. Each organization must decide for itself when the effects of its services can be determined and, thus, when it’s appropriate to solicit feedback.

Once you’ve determined when to capture feedback, the next logical question is how to do it. Yes, you already have the tool, but how exactly will it be administered? Your choices are many: in person or by telephone, e-mail, web site, fax, postal mail, or text message. The chosen method should reflect the most convenient process for your customers. In general, try not to add another communication burden to your customers. If you have frequent face-to-face contact with them, use these interactions for getting their feedback. This also goes for existing communications via telephone and e-mail. If it’s already happening, use it. Providing feedback will only add a minute of extra time, and that’s an investment that most customers are glad to make.

Objective measures
Everything we’ve discussed so far is related to subjective measures of service quality. In other words, we’re asking someone’s opinion of how we performed. They probably don’t have data to back up their opinions, and they may not even be able to provide specific examples. These opinions are the basis for making buying decisions, however, so they’re valuable to you as a service supplier.

Besides subjective performance measures, there are also many objective measures that can be applied to your services. You need only look as far as your service guarantees and contracts to find some effective metrics. Nearly every service provider commits to performing its service within a certain time frame. This naturally gives rise to the question: Was the service performed on time? No opinions are necessary here; you either met your commitments or you didn’t. The data can easily be gathered, charted, and analyzed by your own organization. Hard data provide an excellent counterpoint to customer feedback, and they usually substantiate the themes revealed through customer feedback. When data don’t support these themes, it’s useful to explore the reason for the gaps; e.g., “Our customers think we’re always late, yet our data show this isn’t the case. What’s causing this difference in perceptions?” When there’s a difference of this sort, one of two things typically must happen:

1. The data-collection method must be changed to better match what the customer experiences.

2. The customer must be educated at the performance level. Sometimes providing objective data can shape people’s perceptions, and there’s nothing wrong with doing this.

 

So, what sorts of measures are helpful in managing service quality? Here are some of the most common:

On-time delivery. The scheduled date and time is agreed upon between the customer and services provider, and deviations from this schedule can cause serious problems. On-time delivery is an excellent measure that’s usually easy to track.

Responsiveness. This means your ability to respond to the customer within a reasonable amount of time. The response could be related to a question, problem, quote, inquiry, or order change. Organizations that cultivate “customer intimacy” are usually concerned about how responsive they are.

Effectiveness. All services are supposed to accomplish something: provide information, repair an appliance, process a transaction, or develop a program, among others. If you’re able to determine if your service was effective, then this is an important measure. Keep in mind that I’m talking about an objective measure of effectiveness, not the customer’s perception of effectiveness.

Availability. Services that are up and running must be concerned with availability. Examples include utilities providing water, electricity, gas, telephone, or other resources exactly when they’re needed. Being down for a few hours can cause millions of dollars in losses and huge claims.

Audit results. Processes that provide a service can usually be audited. Either through in-person observation or by examining records, an audit can reveal whether the service was performed as planned. Ideally, conformity with the plan would mean that the service is effective, though this isn’t always the case.

Cost control. This means adhering to established budgets and spending plans while meeting other service objectives. Notice I didn’t say “cost reduction,” which often is used to justify a reduction in service quality.

 

In summary, a two-pronged approach is the most effective way to measure service quality. Gauge service effectiveness through customer perceptions and through objective data, and remember that measures are worthless unless you take action.

About the author
Craig Cochran is the north metro Atlanta region manager with Georgia Tech’s Enterprise Innovation Institute. He’s the author of ISO 9001 in Plain English; Customer Satisfaction: Tools, Techniques and Formulas for Success; The Continual Improvement Process; and Becoming a Customer-Focused Organization , all available from Paton Professional (www.patonprofessional.com). Visit the Georgia Tech’s Enterprise Innovation Institute at www.innovate.gatech.edu .