Quality in Customer Services

A Company can improve her results considerably, by focusing on Quality in her Customer Services Future companies, that will thrive:

Production decentralization Company Future Company A B C D Subcontractors Customers NowIn the Future Integration of info activities

Quality in Customer Services A Company can improve her results considerably, by focusing on Quality in her Customer Services BUT What is/are - Quality ? - Customer ? - Services ?

Export Marketing Veikko Laine Of course, giant companies have the access to better up-dated and more accurate information from their special market research departments. They have also the possibility to affect and mould the market, - from its macro level. Problem Can one compete victoriously with International Giants ? Can one start from the periphery and become a Major Player ? How ? Background In the 80-ties, the company was a local actor. It was far away from the market mainstream. Turnover rested at some 0,5 MEUR. At the market, there were well known names: Siemens, Philips, AEG, ABB, GEC… Giant companies have many advantages. They can offer complete solutions on a turn-key basis. They can provide BOF financing packages, (BOF = Build, Operate, Finance), worth hundreds of millions. All actors (”competitors”, if you like ) have the same market information. Example : Quality in Customer Services

Export Marketing Veikko Laine How was this info converted into victorious actions? Situation in the mid-90ties. Company turnover grew > 10-fold. Number of personnel remained the same. Operations were highly profitable. The company was now, in its field, third largest on the world market. What was behind the success ? Was there something in the market information, that gave a clear competing edge? Was there something in this info… - that others did not notice? Example : Quality in Customer Services cont.

Quality in Customer Services …general market info… ?? …all companies had ”roughly” the same market information…

Quality in Customer Services …general info… ?? => to start with, everyone has the same!! Painting by Bev Doolittle: ”The Forest Has Eyes” …but some can notice more than others…

Quality in Customer Services …general info… ?? …all companies have ”roughly” the same info… BUT …the winner has a clearer picture of… - Quality - Customer - Services …and knows to act accordingly…

Export Marketing Veikko Laine Market Market Potential Total business > 20 Billion ECU / yr New Airports ~ / 10 yrs Airtraffic growth : ~ doubles / 10 yrs The Market is ”steady” and Growing ”Customers” The Airport is a business entity. People are technically minded, safety conscious, conservative Product Same need => Solution => Same Product … copying … ”Same Customer” ( > / same customers ) Heathrow = Beijing = H:ki Vantaa = Oulu Price Airport is the ”Show Window” of the area… Money no problem ”Competition” Very strict international specifications. Special market, …difficult to enter… Competition is tough for ”outsiders” ”Insiders” ~ companies, => Suppliers / 800 Consultants / 300 Contractors …how to win… = International Airports

Quality in Customer Services Example of an Offer Request by a consultant

- Quality ? - Customer ? - Services ? QUALITY = Quality in Customer Services

Quality = The pure concept has been deteriorated. It has become neutral, …”grey”… …nobody really knows what it is… …quality is like … ” XXXXX ”… Everyone likes it… everyone talks about it… everyone does it… everyone knows how to… everyone thinks it comes by nature, -as by itself… so, why should one study it, - and learn more… IF problems occure, - the fault is ALWAYS on the side… => it is the partner, - not me. Quality = ??

Quality in Customer Services Quality =? Or, it can be: … as an example

Quality in Customer Services

Does the Customer know his/her needs, wishes… expectations… ??? Then who should know? The Seller must understand that -QUALITY- consists of many factors

Quality in Customer Services Quality Technical QualityCommercial Quality Which one is cheaper to gain? Which one gives a better price ?

Quality in Customer Services Quality Technical QualityCommercial Quality Compare Cosmetics: At our factory, we fill jars In the Boutique, we sell dreams Which Quality is cheaper to get, which one gives a better price & a more content Customer ? Which should be focused on? And, who judges the Quality ? Who´s opinion counts ? The Factory´s or, - the Customer´s?

Quality Technical Commercial Intensive work with technical and material systems Intensive interaction with people …non-living, no free will, predictable… …living, free will, unpredictable… Conformance with requirements Fitness for intended use Drawings and specs Needs, wishes, expectations Operating Prototype Value for the Customer Tests acc. to tech. requirements Customer satisfaction …can be measured… …difficult to evaluate… Quality : Fulfilment of specs Customer experience “Do Things Right” “Do Right Things” …devil lurks behind the tiny details ”simple” …complex

Quality in Customer Services Quality One cannot talk about Quality, without thinking simultaneously and unconsciously about - The Product Quality & Product are like Siamese twins, - they live in symbiosis, - not one without the other. PRODUCT =

Quality in Customer Services

Export Marketing Veikko Laine Compare : ”Product” = ? Cont. A car, an automobile ? A car is much more than, …four wheels and a motor. It represents : VW : …”a huge emotional value, which makes adrenaline flow”… GM : …superior visual sensations. Driving : - even stronger experiences”… Jaguar : …”a strong statement”… …car, - is a message… …and so are all products… “Products” are simultaneously concrete & abstract. => Customer´s Decision-making… …of the “owner”… …to / from the “owner”… Quality in Customer Services

Quality in Customer services CUSTOMER ”Characteristics”

Export Marketing Veikko Laine The Customer / theory In a transaction, who is actually the Customer ? The Customer : - Is always right … - Is part of our business, not an outsider - Is a person (group of persons), not a company - Is not someone to match wits with - Is not dependent on us – but we on him - Is the fellow who makes it possible to pay our salaries - Is a human being like ourselves, with the same feelings and emotions - Is the life–blood of every business Quality ? - Is not so stupid as one may think, …but… External vs. Internal Customer - Is the King

Export Marketing Veikko Laine The Customer is the most important person in any business. -The Buyer needs two eyes, …the Seller can do with one… old chinese prowerb - Caveat emptor => Let the buyer be aware - Money distorts ”Buyer–Seller” role-distribution, …AND general THINKING ”… got this invitation to a real- estate business seminar. Just wonder what it is good for …!? Europeans traded Manhattan for trinklets, glass beads etc. worth some 25 USD. The native indians just could not understand that one can attach ownership to Nature, Earth, Water, Wind, Rivers, Rain, Air, Space, Moon, Planets… This ownership thinking, was not in their culture. Honesty? Target: Win-Win => …symbiosis… The Customer / reality External/Internal Customer

Export Marketing Veikko Laine Caveat Emptor, ”let the buyer be aware” There are several reasons why ”The Seller” is thought of negatively. -Inbalance in knowledge - The Seller ”knows” the needs, wishes and exp. better than the Buyer. - The Seller knows the product better (…faults, mismatch of need-product.) - The Seller has a better training of psychological methods -Company internal culture - High pressure selling - The Seller is more active of the two (… aggressiveness …) - The Seller may misuse ”social courtesy” - The Seller may misuse ”legal technicalities” -MONEY distorts logical, rational thinking !!!! (…emotions…) - e.g. a ladies handbag = 2000 EUR ? … misuse of ”stupidity” … ? - The unfortunate truth is that there are also dishonest sellers …knowing this, - what should You do ? Quality in Customer Services

Quality in Customer services Customer, - internal Customer In addition to external Customers, the company has …internal Customers Inside the company : ”…the result of your work, is the raw-material needed by the next person in line, - your co-worker…” The company employees are all Customers to eachother. Your co-workers are your Customers, as you are their Customer Are you giving ”Quality Products” to them, - are they to you? Who judges/defines ”Quality”? You or… ??

Export Marketing Veikko Laine In addition to conflicts that arise from personal differences, there are company internal sources that automatically cause tensions : FunctionTheir Emphasis Marketing Production Customized models / orders Internal Customer Standard models / orders Long prod. runs / few products Short runs / many products No product changes Frequent product changes Stiff production schedules Flexible production schedules Long delivery times Short delivery times Ease of production Solving customer wishes Standard quality control Special quality control Engineering Functional / tech. features Sales / customer wish features Few models/standard components Many models / custom comp. Long design lead times Short design lead times Standardized design procedures Ad hoc / liberal design proc Source: Philip Kotler, ”Diagnosing the Marketing Takeover” Harvard Business Review

Export Marketing Veikko Laine In addition to conflicts that arise from personal differences, there are company internal sources that automatically cause tensions : FunctionTheir Emphasis Marketing Broad product line Internal Customer Fast moving items/few products Economic levels of stock Large stock levels (del. time !) Standard parts Nonstandard parts Price of material Customer opinion of material Purchasing at determined times Immediate purchases Accounting / Finance Standard transactions Many reports Few reports Special terms & discounts Hard and solid budgets Flexible budgets acc. to need Pricing to cover costs & profit Pricing to further market dev. Cont. Inventory / Stock Management Full customer credit reports Little customer credit examin. Low credit risks Medium credit risks Tough credit terms Easy credit terms Tough collection procedures Easy collection procedures Source: Philip Kotler, ”Diagnosing the Marketing Takeover” Harvard Business Review

Quality in Customer Services Customer …”Customers” you find everywhere… …they are like grains of sand on a beach… As a human being, you have both internal & external Customers - As an external Customer you have the environment, - Nature Service it well, and it will serve you… - As an internal Customer, you have yourself, - your body and soul Or you can pollute your external Customer, the environ Service them well, and they will service you… Or, you can pollute your internal Customer, - iyourself. - Your body - Your soul

Quality in Customer Services Services Earlier we noticed that the Product has a Janus-face, i.e. it has two characteristics: It can be : Goods and/or Services SERVICES =

Export Marketing Veikko Laine Product ? What the seller sells ? What the buyer buys ? GoodsServices Visible, concrete Invisible, abstract Facts, reasoning, intellect Image, feelings, emotions Production \ Marketing Selling = Production Marketing \ ConsumptionProduction = Consumption Producer produces Buyer participates in production => co-production, co-operation - who is the Customer ? Quality in Customer Services

Export Marketing Veikko Laine Product ? cont. Goods Services Owner of the Product is either the Producer or the Customer Owner of the Product is : The Customer AND the Producer Customer feed-back, afterwards Customer feed-back, immediate Product changes are slowProduct changes are rapid Personnel => TechnologyPersonnel => Attitude Mastery of Production Mastery of Interaction ”Product” knowledge Knowledge of ”Product” AND human relations Customer decisions Y/NCustomer decisionmaking is continuing all through the proces Quality in Customer Services

Export Marketing Veikko Laine Product ? cont. Goods Services Decisions are made high- up in the hierarchy Decisions must be made locally & promptly Production personnel must learn to work with technical questions Personnel must also learn the very character of services Products are produced Services are – performed- by the buyer and the seller Product = Goods + Services => X …devil lurks behind the tiny details Services => To make it ”easy” for the Customer Quality in Customer Services

Export Marketing Veikko Laine SERVICES What are services ? - Perhaps it is easier to answer, ”WHY” - need services? REASONS : - To make things ”easy” for the Customer / - What might these ”things” be ? - Too difficult ( C. does not have the needed knowledge/expertize/tools/workforce… ) - Too expensive ( C. does not have the necessary resources vs. need… Airplane vs. seat ) - Too big ( C. needs but a small portion. Not the Scyscraper, - but an appartement… ) - Too dangerous ( C. appreciates someone else to take the risk) - Laziness, loving of Comfort (”Jet-Set”, => have someone to -”serve”- you) - Any difference in so called ” cultural barrier ” - What else ? - Physical/mental differencies (… inabilitie s…) - Logic of the line of business is …unknown - ”I need it now” ( the shop opens at…= - ”I need it here” ( the nearest shop is in …) Differencies in Information content ! Quality in Customer Services

Export Marketing Veikko Laine SERVICES = ”Product” (=>Visible + Invisible) Services => …help the Customers… …services are everywhere… …we are surrounded by them… - without noticing them, - perciving them... they are taken for granted? Services = “Product” => Visible + Invisible. (What might be the Invisible part of Services in above pics?) Quality in Customer Services

Services = ”Product” (=>Concrete + Abstract) co-operation process ”Services” is a co-operation process where both the Seller & the Buyer participate Temporal process : 1)…build-up of customer expectations… (how do you control / know? 80/20 …high / ”normal” / low…) 2) ”Physical” (e.g. P-2-P) contact, roles start to develop (…compare : dogs ) 3) Acceptance of the roles… (…w/o acceptance, …understanding… compare Rodeo) 4) Performance of activities (… in co-operation… leadership …Rodeo) 5) End phase, …getting apart… (memory build-up…) 6) …temporal continuum… (next encounter, and next,and…) Services => …to make it “easy” for the Customer… (Visible + Invisible)

Export Marketing Veikko Laine Quality in Customer Services

Services = ”Product” (=> Concrete + Abstract) ”Services” is a co-operation process where both the Seller & the Buyer participate Co-operation => Interaction => & L eadership CUSTOMER & styles of participation Situation at the beginning of the co-operation process : Customer is “fearful”, (s)he feels uneasy (…mismatch of “products”…) => Inform what is happening / going to happen (in the serviceprocess), and - what the Customer is expected to do. The Customer should feel that (s)he IS IN CONTROL of the process => “safety” How do you inform the Customer what (s)he is expected to do ? …earlier experiences, …signs, …written material, …lay-out of premises, …P-2-P contact… …however… …(s)he wants,...appreciates to be …lead… (…make it “easy”…) Distribution of work activities, - who does what /w/h… ? ( Visible + Invisible ) …compare Airport Check-In…

Export Marketing Veikko Laine Services & styles of Customer Participation 1. Specifier - specifies the services (s)he wants… …production & co-operation… 2. Developer - gives suggestions of how to improve the services, and participates in the R&D and production work 3. Controller - controls / supervises the quality of the services (s)he receives 4. Producer - at the extreme, the only person in the service production 5. Consumer - uses the services all through the production process 6. Promoter - often the best salesperson of the service producing organization Active - Passive, …Aggressive, Social, Dominating, Supportive, Driven by special interests… Participation is often rather loaded with EMOTIONS

Export Marketing Veikko Laine Services = ”Product” (=> Concrete + Abstract) Characteristics of good services : 1) Credibility2) Prof skills => task & personal 3) Thrustworthiness, attitude & behviour4) Willingness to serve 5) Reach ability 6) Frendliness, caring 7) Communication, interaction8) Safety 9) ”Understanding” the Customer10) Material support (…back-stage) 11) Easyness of Customer participation12) ”Correcting” procedures 13) Control of C expectations, experiencies14) Control of C participation Quality is what the Customer experiences all through the process. The Customer evaluates constantly the outcome, - down to the smallest detail of the process. Devil lurks behind the tiny details ! 15) Control of the participation of the other Customers …emotions…

Export Marketing Veikko Laine Example Quality in Customer Services Services : Help the Customer, make his / her work easy => ex. remove the cause of irritation Quality : Customer evaluates,- not only the company Customer : Know them, ex. …what disturbes them This way you will get => Quality in CustomerServices Great growth How was it done? Tough tech requirements Customer knowledge? Expensive. Reports, plans No concrete products to install

QUESTIONS ? …in a transaction, who is the Customer ?