Marketing Research

1. Strategies and Procedures Quality of Service

1.1 Focus on Customers

A customer (sometimes known as a client, buyer, or purchaser) is the recipient of a good, service, product, or idea, obtained from a seller, vendor, or supplier for a monetary or other valuable consideration. Customers are generally categorized into two types:

  •   An intermediate customer or trade customer (more informally: “the trade”) who is a dealer that purchases goods for re-sale.
  •   An ultimate customer who does not in turn re-sell the things bought but either passes them to the consumer or actually is the consumer. A customer may or may not also be a consumer, but the two notions are distinct, even though the terms are commonly confused. A customer purchases goods; a consumer uses them. An ultimate customer may be a consumer as well, but just as equally may have purchased items for someone else to consume. An intermediate customer is not a consumer at all. The situation is somewhat complicated in that ultimate customers of so-called industrial goods and services (who are entities such as government bodies, manufacturers, and educational and medical institutions) either themselves use up the goods and services that they buy, or incorporate them into other finished products, and so are technically consumers, too. However, they are rarely called that, but are rather called industrial customers or business-to- business customers. Similarly, customers who buy services rather than goods are rarely called consumers. Six Sigma doctrine places (active) customers in opposition to two other classes of people: not-customers and non-customers. Whilst customers have actively dealt with a business within a particular recent period that depends from the product sold, not- customers are either past customers who are no longer customers or potential customers who choose to do business with the competition, and non-customers are people who are active in a different market segment entirely. Geoff Tennant, a Six Sigma consultant from the United Kingdom, uses the following analogy to explain the difference: A supermarket’s customer is the person buying milk at that supermarket; a not-customer is buying milk from a competing supermarket, whereas a non-customer doesn’t buy milk from supermarkets at all but rather “has milk delivered to the door in the traditional British way”. Tennant also categorizes customers another way, that is employed outwith the fields of marketing. Whilst the intermediate/ultimate categorization is used by marketers,

market regulation, and economists, in the world of customer service customers are categorized more often into two classes:

  •   An external customer of an organization is a customer who is not directly connected to that organization.
  •   An internal customer is a customer who is directly connected to an organization, and is usually (but not necessarily) internal to the organization. Internal customers are usually stakeholders, employees, or shareholders, but the definition also encompasses creditors and external regulators. The notion of an internal customer — before the introduction of which external customers were, simply, customers — was popularized by quality management writer Joseph M. Juran, who introduced it in the fourth edition of his Handbook (Juran 1988). It has since gained wide acceptance in the literature on total quality management and service marketing; and the customer satisfaction of internal customers is nowadays recognized by many organizations as a precursor to, and prerequisite for, external customer satisfaction, with authors such as Tansuhaj, Randall & McCullough 1991 arguing that service organizations that design products for internal customer satisfaction are better able to satisfy the needs of external customers. 1.2 Leadership and Strategic Planning When it comes time to implement a strategy, many companies find themselves stymied at the point of execution. Having identified the opportunities within their reach, they watch as the results fall short of their aspirations. Too few companies recognize the reason. Mismatched capabilities, poor asset configurations, and inadequate executioncan all play their part in undermining a company’s strategic objectives. Although well- regarded corporations tend to keep these pitfalls squarely in their sights, in our experience far fewer companies recognize the leadership capacity that new strategies will require, let alone treat leadership as the starting point of strategy. This oversight condemns many such endeavors to disappointment. What do we mean by “leadership”? Whereas good managers deliver predictable results as promised, as well as occasional incremental improvements, leaders generate breakthroughs in performance. They create something that wasn’t there before by launching a new product, by entering a new market,or by more quickly attaining better operational performance at lower cost, for example. A company’s leadership reaches well beyond a few good men and women at the top. It typically

includes the 3 to 5 percent of employees throughout the organization who can deliver breakthroughs in performance.

Since bold strategies often require breakthroughs along a number of fronts,a company needs stronger and more dominant leadership at all levels if these strategies are to succeed. A defining M&A transaction, for example, requires leadership throughout an organization’s business units and functions in order to piece together best practices and wring out synergies while striving to carry on business as usual. In addition, leaders throughout both companies must transcend the technical tasks of the merger to rally the spirits of employees and to communicate a higher purpose.

As the number of strategic dimensions and corresponding initiatives increases, so does the pressure on leadership. Not surprisingly, our work in many industries with companies of all sizes has shown that high-performers, especially those with lofty aspirations, have the most difficulty meeting their leadership needs. Of course, companies that perform poorly are also lacking in leadership capacity. The higher a company’s aspirations or the more radical its shift in strategic direction, the larger the leadership gap. This rule holds true for high performers and laggards alike.

1.3 Establishment of Comprehensive Customer Service

Step 1: Identify your target customers

Begin by identifying your target customers. Who are they? What do they need from your agency? How, and at what times or places do they interact with your agency— what are the “points of service delivery”?

  •   Cluster or segment target customers based on their common behaviors.
  •   Determine the priorities of your customer “clusters”.
  •   When possible, focus on customers with high current or future value—for example, someone who frequently accesses your services. A comparable example is a frequent flier program—airlines offer a higher level of service (such as early boarding privileges) to their frequent flyers, while still meeting the needs of their other passengers.
  •   To target the highest level of service to your “frequent flyers”, you also need to identify the best ways to serve non-target customers, those to whom it is expensive to provide services, or those who might be better served by other means. This is a necessary part of a customer focus. One example: a fire department could discourage residents from contacting the department to remove cats from trees by charging a $20 fee for performing the service, and by advertising their busy emergency call load.

Step 2: Determine what your customers want

 Determine what target customers want (not just what they need right now) by considering these techniques:

o online customer satisfaction surveys o phone or email survey
o in-person meetings or focus groups o user testing

o channel analytics (web, phone, etc.)

  •   Determine how target customers prioritize their “wants”. Generally, customers want timeliness, convenience, quality products and services, variety or selection, and protection or security. However, each agency must identify what is most important to its customers.
  •   Weigh how important the customer-identified “wants” are to your agency. Are the services something that the organization does, is capable of doing, or wants to pursue?
  •   Determine how well your agency can meet your customers’ “wants” in comparison with competitors. You may think you don’t have competitors, but more than likely you do, especially if you’re producing consumer-related information for the public. Be mindful of who’s doing similar work—if competing organizations meet or exceed customer expectations, it changes the customer’s frame of reference and increases their expectations.
  •   Determine which “wants” would most positively impact your agency’s bottom line (for example, increased compliance with a regulation, more loyalty and trust, or a desired customer behavioral change), and whether those “wants” should be targeted for improvement. Step 3: Create a culture of customer service
  •   In the best performing private companies, CEOs ensure that employees at all levels understand their customers and are given the tools to serve them well.
  •   Agency leadership must communicate the importance of customer service and ensure that all employees, even those without direct customer-facing jobs, understand how their work serves customers.
  •   Management must regularly interact with customers so they understand evolving customer needs.
  •   Most importantly, front-line customer service workers must be empowered to actually solve problems on the spot.
September 7, 2021
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