Why service quality improvement is essential

Essential Service Quality Improvement Considerations

Why is service quality improvement so important?

In this increasingly competitive world with ever shortening product development cycles, service quality improvement is often a key competitive differentiator that is sustainable. Competitive differentiation based on product is hard to sustain in most cases, unless patented technology is in play.

The reputable and time honored PIMS database at Princeton University clearly demonstrates that businesses rated high by their customers for service grow faster and are more profitable than businesses rated low.

Service quality is often "underwhelming"?

The American Customer Satisfaction Index (University of Michigan Business School) stood at 74 in 1994, dipped to 71 in 1997 and has only slowly recovered to 73 in 2000.

Only one in three customers who have a problem and contact the organization for help are satisfied with the response they get. Customers who contact an organization for help and are dissatisfied with the response are 30 to 40% less loyal.

The average North American company has 11% of its revenue at risk as a result of customer problems and the way they are handled.

$1 spent on advertising yields less than $5 in incremental revenue, but that same $1 spent on improving customer service can yield over $60 in incremental revenue.

Every company wants to delight its customers. Bold promises are often made - bad results are often the reality. The issue is not that services are poor. The real issue is that the promised and necessary great services are harder to deliver than ever!