Customer Delight

Customer Delight: A Positive Retention Strategy

Graphics courtesy of feedierOpens in new window It can be very difficult to build long-term relationships with customersOpens in new window if their needs and expectations are not understood and well met. It is a fundamental principle of modern customer management that companies should understand customers, and then ensure their satisfactionOpens in new window and retentionOpens in new window. This is why customer relationship management (CRM)Opens in new window is grounded on detailed customer-related knowledge. Customers that a company cannot serve well may be better served by competitors.

This does not necessarily mean being world class or best in class. It does mean being aware of what it usually takes to satisfy the customer and what it might take to delight or pleasantly surprise the customer.

You cannot consciously delight the customer if you do not understand the customer’s expectations. You may stumble onto attributes of your performance that do delight the customer but you cannot consistently expect to do so unless you have deep customer insight.

• Consistent efforts to delight customers show your commitment to the relationship.
• Commitment builds trust.
• Trust leads to relationship longevity.

The above formula implies that customer delight can be influenced in two ways:

1. by managing expectations or
2. by managing performance.

In most commercial contexts customer expectations exceed customer perception of performance. In other words, customers generally can find cause for dissatisfaction. You might think that this would encourage companies to attempt to manage customer expectations down to levels that can be delivered.

However, competitors may well be improving their performance in an attempt to meet customer expectations. If your strategy is to manage expectations down, you may well lose customers to the better performing company. This is particularly likely if you fail to meet customer expectations on important attributes.

Customers have expectations of many attributes, for example:

• product quality,
• service responsiveness,
• price stability, and
• the physical appearance of your people and vehicles.

These are unlikely to be equally important. It is critical to meet customer expectations on attributes that are important to the customer. Online customers, for example, look for:

• rapid and accurate order fulfillment,
• good price,
• high levels of customer service and
• website functionality.

Online retailers must meet these basic requirements.

Dell ComputersOpens in new window believes that customer retention is the outcome of their performance against three variables that are critical for customers:

1. order fulfillment (on-time, in full, no error – OTIFNE),
2. product performance (frequency of problems encountered by customers) and
3. after-sales service (percent of problems fixed first time by technicians).

The comments in parentheses are the metrics that Dell uses.

Kano’s Customer Delight Model

Noriaki Kano has developed a product quality model that distinguishes between three forms of quality.

1. Basic qualities are those that the customer routinely expects in the product. These expectations are often unexpressed until the product fails. For example, a car’s engine should start first time every time, and the sunroof should not leak.

2. The second form is linear quality. These are attributes of which the customer wants more or less. For example, more comfort, better fuel economy and reduced noise levels. Marketing research can usually identify these requirements. Better performance on these attributes generates better customer satisfaction.
3. The third form is attractive quality. These are attributes that surprise, delight and excite customers. They are answers to latent, unarticulated needs and are often difficult to identify in marketing research.

As shown in the Figure X-1, Kano’s analysis suggests that customers can be delighted in two ways:

1. by enhancing linear qualities beyond expectations and
2. by creating innovative attractive qualities.

Exceeding expectations need not be costly. For example, a sales representative could do a number of simple things for a customer, such as:

Some efforts to delight customers can go wrong. For example, sooner is not necessarily better. For example, if a retail store customer has requested delivery between 1 p.m. and 3 p.m., and the driver arrives an hour early, the truck may clog up goods inwards and interfere with a carefully scheduled unload plan.

Many contact centers play music while callers are waiting online. This is to divert the caller’s attention, and create the illusion of faster passage of time. However, the cycle time of the selected music must not be too fast, otherwise callers will be exposed to the same songs repeatedly.

Also, the music needs to be appropriate to the context. Customers may not appreciate “I Can’t Get No Satisfaction” by the Rolling Stones if they are waiting online to complain.

A number of companies have explicitly adopted Customer Delight as their mission, including Audi GroupOpens in new window, HISOpens in new window and, until recently, American ExpressOpens in new window and Kwik FitOpens in new window, the auto service chain. Others pay homage to the goal but do not organize to achieve it.

In the service industries, customer delight requires front-line employees to be trained, empowered and rewarded for doing what it takes to delight customers. It is in the interaction with customers that contact employees have the opportunity to understand and exceed their expectations. The service attributes of empathy and responsiveness are on show when employees successfully delight customers.

Companies sometimes complain that investing in customer delight is unproductive. As noted earlier, expectations generally increase as competitors strive to offer better value to customers.

Over time, as customers experience delight, their expectations change. What was exceptional becomes the norm.

Delight decays into normal expectation, and companies have to look for new ways to pleasantly surprise customers. In a competitive environment, it makes little sense to resist the quest for customer delight if competitors will simply drive up expectations anyway.