The Science of Service

The fact that the customer is the sole source of revenue for every organisation arguably moves the management of service quality to the centre of an organisation’s priorities and positions it as the most important management skill of all. It is an area of skill that has become infested by the philosophies of half right prophets (e.g. Recruit for attitude, train for skill; Satisfied staff = satisfied customers) some of which have some value but none of which provide a truly effective management platform.

There are many advocates of service quality that point to fact that commercial success is inextricably linked to service excellence and there are as many measurement techniques for looking at customer satisfaction as there are days in the year but there does not appear to be a general approach where the measurements that examine the role, purpose and value of the customer as the driver of present and future success can be viewed from a strategic management perspective. What can help to move the management of service quality away from its perceived status as more of an art form and position it squarely as a management science that uses proven measures to provide real insight and hard edged decision making data to improve the performance of their sole revenue source? It is difficult to argue that such information would not only be valuable but critically important to the development of the organisation.

In some organisations science is not only accepted it is expected. From medicine, through electronic technology and communications to Formula One motor racing any organisation not applying a scientific approach will not be taken seriously for long and will, by virtue of not delivering to its customers an efficacious proposition, will fail.

A number of different elements are at work in such different organisations. Pure R & D is applied to discover, innovate or design. Testing is used to prove, improve or analyse benefits. Application is used implement and reap the rewards of success. All of this is conducted in a carefully managed and monitored process that only accepts what will work and rejects or reworks that which does not.  As in pure science an hypothesis is tested to reality or destruction by experiment and observation.

Has this approach ever been applied to service quality?  There are organisations that genuinely do place serious emphasis and effort on measurement and the application of results to performance improvement but how many of these use such techniques in a reactive rather than proactive way?

How many organisations look at the service proposition and analyse it from a customer experience standpoint and then develop an hypothesis that very specifically proposes that “If the service proposition was developed to include/exclude “x”then active loyalty would improve by “y” and the bottom line would increase by “z” and then set in train a scientific process using both a live sample and a blind test sample of customers? (“Active Loyalty” is the definition of a customer that has a supplier as their preferred candidate for a given product/service and uses them as first choice for all purchases)

Given that customers who spend regularly are the key source of revenue is that too difficult to consider, especially when contrasted with the amount of “scientific” effort that goes into attracting sales from new customers? If one of the first laws of improving sales performance is to “Fish where the fish are” then at least with existing customers the organisation knows where they are!

Customers use a supplier’s products/services to meet a range of general or specific needs. Do organisations really place enough emphasis on researching with scientific thoroughness their understanding of these needs and the degree to which the service element of the proposition can develop their business?

A couple of brief examples where organisations not normally associated with high service quality propositions have used such understanding to grow their business.

Rational AG a German manufacturing company make specialist cooking equipment for hotels and restaurants. At first glance it could be a traditional manufacturing company. However the reality is that is that the company delves deeply into the needs of every customer, it has the deepest understanding of the locations and limitations of where its equipment will be placed, it understands that because its technology is innovative and different there is a need to develop the skills of its customers’ staff to optimise its benefits and, because it employs many ex chefs in this role, it knows where the pinch points in the production process are likely to occur and have used R & D to address such issues. As Rational AG is  also an international supplier it has learned how its equipment should be used to produce food to suit the needs of different ethnic societies. All of this service quality “science” has helped them to grow their top line exponentially and to be one of the most profitable businesses in Germany. The facts that their equipment is bespoke, quicker, more environmentally friendly, take up less space in a crowded kitchen and cost less to run are treated as secondary in importance to their focus on having a proven understanding of their customer’s needs.

Screwfix Direct is a British company that started life as a purely online supplier of materials primarily to the construction sector. A good, successful business model offering value products with rapid despatch from an effective online only platform. Their delivery standards were and are of the highest quality, with overnight despatch a standard. However a more scientific understanding of their customers’ needs identified that a high number of their trade customers, by virtue of the nature of their business, could not know what they required the following day as many of their product needs would only become apparent in the course of their work so next day delivery could mean the loss of a part of the current working day with the attendant loss of revenue to the tradesman and the knock on of dissatisfaction to their customers. Having scientifically analysed the potential the solution has been to develop the distribution channels by opening “retail” shops where the tradespeople can go to get the products they need instantly. Result, an increase in happy actively loyal customers and greater satisfaction for their customers plus new customers and an interesting interactive effect where they report online is driving up retail sales and retail is driving up online sales.

In pure science an hypothesis is tested to reality or destruction by experiment and observation. In both these cases it was not some soft skills, arty approach which created success but a quantified understanding of their customers’ needs that was used as the foundation of a service development hypothesis which was tested and proven to create higher levels of active loyalty and substantial improvement in commercial results.

Is there an opportunity for a more scientific approach in your service quality proposition?

Philip Forrest