Product or Service?

Gwynne Young
Managing Editor, CustomerThink
Member

Posted 14-Jun-2006 10:16 AM
When you decide to make a purchase, which is more important to you, the quality of the product or the way you're treated when you buy the product? Would it surprise you to find out that customers told Dick Lee and David J. Mangen that both were equally important?

In his June 19, 2006, CRMGuru article, Customers Redefine "Customer Focus," Dick Lee reveals that fact and others from his and Mangen's latest survey.

So I'm wondering, does this surprise you as a customer? When was the last time you walked away from a quality product, because the service angered you? When was the last time you bought a good product, despite poor service?

And, most importantly, when you're on the other side of the equation, are you concentrating your business efforts as heavily on your front-line employees as you are the quality of your product or service?

What do you think about all this? Does it jibe with your experience?

Kim P
Member

Posted 10-Jul-2006 12:10 PM
Good questions. I'm a big advocate for CEM—customer experience management—it's what I do all day.

I personally have walked away from a good product because of bad service. In retail locations and more recently when I was looking for a new laser printer. I wanted an HP printer initially and then found out about their very poor customer service and so I bought a Canon becuase their service is great. And I'm very happy. No hiccups with Canon at all.

Customers don't have time for poor service—it takes longer and is frustrating and wastes your time (as a customer). I think business that doesn't offer positive customer experiences will lose out to those that do.

I can tell you I've been burned enough to know what a huge value good service is. It is giant.

And on the business side, I'm a consultant who helps businesses do this—and this is the focus of my own practice too.

Evan Wood
Member

Posted 14-Jul-2006 08:55 AM
In my experience, there are very few products that differentiate and sell themselves based on quality alone. Those products that do fall into this significant minority tend to have 2 dominant characteristics: incredibly strong brand recognition and preference, and a low service requirement.

Conversely, the vast majority of products fall into the other camp: that is, they have significant competition, and the 'experience' which accompanies their product (including service) is what truly differentiates them and gives them the competitive advantage (or not, depending on the experience they provide).

As a marketing services provider specializing in communications and CEM for the travel & tourism industry, we see this all the time. The 'destination' may be the bullseye (and remains the marketing focus for most organizations), but the bullseye is a small part of the overall target. It's the end-to-end experience that surrounds this bullseye that differentiates one provider from the next, and it's what customers remember. The two cannot be separated, and marketers need to realize this.

President, JumpWood Marketing
www.jumpwood.com

Graham Hill
Guru
Member

Posted 17-Jul-2006 12:11 AM
Gwynne

I am with Kim & Evan on this one.

The distinction between product and service quality is a false dichotomy. It is not all that useful in understanding what is happening in the mind of the customer at the point of purchase.

For customers with little experience of a product (and most products come wrapped in layers of services these days), brand reputation is a useful guideline. And the most important channel for this is increasingly word of mouth by other consumers or influencers, particularly recommendations. Research at the London School of Economics showed a strong relationship between the number of "net promoters" and sales margin growth across a whole range of categories. Many other sources of information also play a role. All sources of information will be processed (most likely sub-consciously) at the point of purchase, perhaps triggered by an offer, some interesting display advertising or some other context-sensitive factor.

Once the product has been purchased and consumed, the customer will evaluate the usage experience in the light of what they heard about it, what they expected from it and how its everyday use helps achieve the outcomes the customer is looking for. This mostly happens sub-conscously through a process of Bayesian Updating, where each additional usage of the product updates the customer's perceptions of it.

At the point of repurchase, it is this continously-updated impression of the product that will be used to decide whether it gets repurchased, or whether an alternative does. This includes elements of the product itself, the services that come bundled with it, the price paid, the usage experience and a number of other factors relevant to the customer. If the product in use didn't match the promises made about it through branded advertising, the product is heading for customer disatisfaction, customer defection and trouble. Sadly, research by Beyond Philosophy shows that 80% of customers today do not expect the promises made by branded advertising to be actually delivered, and that 80% of customers will still be disappointed!

It's not about product quality or service quality as either-or factors at all. It is much more about the end-to-end customer experience.

Graham Hill
Independent CRM Consultant

David Jackson
Member

Posted 19-Jul-2006 01:07 AM
IMHO, Graham is right to point out that it is about both product and service but there is also an argument that it extends beyond that. Experience in the customer's mind is a complete package, product, service, support and how easy it is do business with you.

But even this extended definition is not complete. Experience is shaped by expectation, which is closely related to reputation, so it includes a strong brand element. Expectations differ from customer to customer and are shaped by price so there is a value for money element in the mix too.

CEM is taking CRM in the right direction. We all have our own pet definitions—mine is service excellence, which a group I was working with in 1989 defined as "everything an organisation does to profitably win, satisfy and retain chosen customers better than the competition."

My experience in running the UK Service Excellence Awards suggests that the best companies focus on the actions and less on on the definitions!

Regards
Dave J

Graham Hill
Guru
Member

Posted 19-Jul-2006 05:55 AM
David

I am in full agreement that purchase decisions are influenced by product, service, experience and a host other customer-context specific factors.

Your comment about "brands" is interesting. I agree with Tom Asacker when he suggests that a brand is the sum of the evoked feelings and associated emotions that a customer has about it. Tom describes this with crystal clarity in his book "A Clear Eye for Branding" and his "A Clear Eye" blog at http://www.acleareye.com/. Obviously, the strongest feelings and emotions are generated by the customer's personal experience or the experiences of those the customer trusts. These easily override the brand's own communications where the experience doesn't match the brand's communicated promise.

At the end of the day, as you suggest, the key to understanding customer purchase decisions lies in working with customers to understand what sells best.

Graham Hill
Independent CRM Consultant

copparapu bobby(choudesh)
Member

Posted 07-Sep-2006 04:52 PM
Customer service in the organization will be rendered by serveral ways. One is call centre—Using this, monitoring the importance of each product preferred by the customer wil be considered. No matter what the product quality, always monitoring is more important to see the customer's satisfaction. Customer although, he may be old or regular to the organisation or to the product—we measure the satisfaction of the customer who opt our product regularly in the market.

As long as the Market can also forecast the demand planning process—apart from the product quality is also equally important among competitors because to have high sales value which can dominate the peers.

Service at the two levels (1) Operations (2) Maintenance level. At both levels, service is more important—availabilty of the service can be determined upon the market strategy. ex: Wal-mart, K-mart etc. either it may be 24 hours (24x7 system) or Time schedule. All these keeping in view the service should be monitor by the call centers.

I guess Dick Lee and David J also emphasised about the product availability with quality vs monitoring the engagements given by the customers. Most of the time demand planning will bring an idea how the customer require the product ex: Product availability to the customer at right time (service motto)—if the service is bad, the product will be angered by the customer no matter whatever the organization irrespective their goood will in the market.

Hope all the customer will be respected by organizations by giving an assurance "quality of the product and quality in service is ours."

choudesh copparapu
SFA/CRM/Data Integration specialist
Sea Shells Data Warehouse