The Customer Is Always Right… Sometimes


Yesterday we talked about the Baldridge Award and how one firm won the award, but shortly afterwards went bankrupt. This case raised questions about the value of quality control, or at least of the Baldridge award. My contention is that the ability of today’s quality tools and techniques are not in question. They work (really [I mean it, really {REALLY!}]). The real question is if the project has identified the right quality measures to improve. Who dictates which measures of quality are right or wrong? Quality must always be determined by the client! Remember, quality is the set of factors that makes your products and services attractive to your clients. You need to talk to your clients, and be sure that the changes that you have targeted are the changed the client wants. Of course, there is one little problem. Not every client knows exactly what they want. And client needs will change over time. This is especially the case for corporate services, where the client has never had a chance to choose between different providers. They don’t necessarily know what the options are. With all of these uncertainties, how can you be sure that improvements stay on course and stay aligned with client desires?

Let’s look at the car industry for some relevant examples. In the 60’s the Japanese entered the U.S. car market. Big U.S. car companies didn’t react very strongly to this because the imported cars were small and not very feature rich. A college student might buy one of these funny little cars, but Big Car firms knew in their hearts that this wasn’t affecting new car sales; at most, students were buying a new Japanese car instead of a used American car. This didn’t look like much of a threat, and it would probably go away if Big Car firm just stuck to their guns and produced the kind of car that they knew that buyers should want. And maybe that’s what would have happened, except for two important quality events.

When the college students of the 60’s grew into the workforce of the 70’s, they were ready to trade up to better cars. But what was a better car? They outgrew the toy cars of their college days, but U.S. made “upgrade” cars weren’t as reliable. And Japan was beginning to move their cars upmarket. Even more importantly, over the last couple of decades the oil industry moved production to “higher quality” oil sources (easier to drill, higher grade, larger reserves, lower cost, etc.), mostly in the Middle East. No one realized at the time that these oil sources had another quality… volatility! This time the volatility took the form of a group that wanted to improve profits for oil producing nations by reducing the amount of available oil, thereby increasing the price. While the Organization of Oil Producing Countries was only know within the oil industry then, today we all know about OPEC. Through their actions and U.S. counteraction, the oil crisis of the 70’s kicked off with skyrocketing oil prices. Just a few years earlier cheap and available gas was a given. Now that he price was rising car buyers, especially car buyers who had moved to newly built communities that required long car drives to work and to shopping. U.S. cars lagged behind in efficiency, costing them additional car sales. By the 80’s gas prices eased, and US car firms created SUV’s and other new large car categories. Here the U.S. firms not only read the consumer correctly, by creating the SUV category they anticipated consumer desires. Big U.S. cars got bigger, while European and Japanese cars grew more slowly (take a trip to any large non-U.S. city and you quickly realize how large our cards are). But of course nothing lasts forever, and today’s record gas prices once again have consumers looking for smaller, more efficient (and less profitable) cars.  

Whatever seems like a “permanent” client demand can suddenly evaporate (perhaps due to changes in technology), or client populations can turn over rapidly (mergers, creation of a new revenue earning group), or macro-economic factors can change your business (business shifting from the U.S. to Europe). So work carefully with your clients to understand what they need., and keep refreshing your understanding of client needs. Still, there are going to be times when you see a new opportunity or a newly emerging type of service that you need to invest in before the demand exists. After all, a manager is responsible for anticipating new trends, not just following them. It’s a balancing act, where you always need to respect the voice of the client, but you sometimes need to pay attention to your own voice. And that’s my Niccolls worth for today!

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2 Responses to The Customer Is Always Right… Sometimes

  1. Alana Cates says:

    I totally agree. Understanding the voice of the customer is key to sustainable profits, but is easier said than done. Yes, customers don’t always know what they want, and even when they do, a lot can get lost in translation – literally and through the inaccurate interpretation of measures. For instance, the brand “Hamburger Helper” knew that “predictability” was important to their customers – rushed moms who need to be able to grad the right box within seconds and serve up something their kids already know and love, but they fell into the industry trap of introducing new packages, flavors and shapes. When it comes to measures, it can be hard to measure the things that matter, like speedy checkout lines. Or, take the call center who measured based on averages and therefore leaders thought targets were being hit, when we know that averages mean if one foot is in hot water and the other in cold, your feet should be warm. Some things just don’t balance out, especially customer experience. Thanks for the great blog!

  2. Right you are! Understanding the customer is more difficult than we think. We sometimes get interesting data about customer needs, but we don’t understand what we are looking at. Take a look at the TED Talk site… it’s a brilliant site that has short presentations on fascinating topics by the most brilliant people on the planet. One of my favorites is about how customers don’t always know how to ask for what they want. The breakthrough in understanding the customer came from… spaghetti sauce. Take a look at http://tinyurl.com/lqlmjl.

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