February 2013 - The Service Council

Cost Of Quality: The Cost of NOT Creating a Quality Customer Experience

By John Carroll | Perspective | No Comments

What does cost of quality mean to your service organization? According to the American Society for Quality, “the “cost of quality” isn’t the price of creating a quality product or service. It’s the cost of NOT creating a quality product or service”. Too often, I believe service organizations are looking at cost of quality too literally as in how much does it cost to deliver service (cost to resolve a service issue). This leads organizations to establish traditional metrics  such as Mean-Time-To-Repair (MTTR), First Call Resolution, # of Jobs Completed/Day to determine the efficacy of their service organization. There are many flaws in this myopic view as the customer journey and experience begins typically much earlier than service being required to get involved. Depending on the market segment (asset centric industries vs. non-asset centric industries, b2c vs. b2b), the experience could initiate in a dramatically different way (transactional web experience vs. face-to-face experience). How cost of quality should be defined: the cost to deliver a consistent and effective customer experience across all channels at every phase of the customer journey.

This brings me to a recent experience I had with SnapFish by Hewlett Packard. My wife and I have a library at home and we enjoy capturing special moments (our daughter’s birthdays, holidays, etc.) by developing photo books which are hard cover bound books where you are empowered to organize the photos you want and the sequence of photos using a free online service. It’s a really neat product (and service) which empowers you to get creative and to design and capture special moments (the modern age photo album). We’ve been using SnapFish since Kodak Gallery discontinued its service (we were very loyal customers of Kodak for the previous 5+ years). In the 5+ years we worked with Kodak, we rarely had an issue that required the engagement of customer service. The product and service was highly predictable. I suppose this increased our expectations of SnapFish.

Since this transition, we’ve purchased 3 new photo books from SnapFish. Each order, we’ve encountered an issue, and not with the level of customer service we received but rather with the overall experience we had in the purchase. The ordering process (web experience) was equivalent to Kodak (smooth) but every time the photobook arrived, it was damaged. The standards they use to pack and ship their products are less than stellar and the books arrive with some level of damage to them (curved corners, bent books, etc.). Each of the 3 instances this happened, we engage with customer service and they are wonderful to deal with, truly pleasant. They agree to refund us our money (without putting up much of a fight which nowadays is pretty standard) and send us a new photo book free of charge. I’m starting to wonder when they derive profit off us as a customer as we haven’t really purchased anything as of yet based on the 3 refunds we’ve received (in fact, we are purely a cost to them right now). I’m also starting to wonder if they truly understand the importance of the overall customer journey?

The experience is predicated on more than just the reactive service event of when we call into their support line. It also goes beyond the purchase experience. What Snapfish (Hewlett Packard) has failed to appreciate is that the entire customer journey is what will determine my loyalty as a customer. Ordering Process (web experience), check. Customer support (issue resolution), check. Quality of product, fail. As a consumer, this has required us to spend much more time than we thought we would have to arrive at the expected outcome we have as a customer (a photo book on our doorstep).

Do organizations understand that other functions of the business, outside of line of business service (engineering, distribution, etc.), realize how important of a role they play in the customer journey? Do they realize the impact they have on cost of quality and the overall customer experience?

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