- Judging consultant and professional services is the assesment of measurable results and performance, as well as the quality of experience involved.
- Most clients are forced to conform to the service offer they are presented.
- True service value is around choice, flexibility, provability and customer response.
- Responding to real needs and expectations can only be achieved by understanding the client's judgement criteria.
- This Byte explains how to define a client's judgement criteria, through assesment and dialogue.
Service quality: Statistics of client action
The evidence to support the growing importance of service quality to consulting firms is powerful. TARP (Technical Assistance Research Programmes), a US based market research company, produced the following statistics that relate to the provision of service in retailing.
Their data indicate that, on average:
- It costs 5 times as much to attract a new client as it does to retain an existing one.
- Each unhappy client will typically tell 10 others about the experience.
- Out of 100 unhappy clients only 4 will complain to the original source.
- Only 10% of unhappy clients who complain will remain loyal to a firm, (unless their problem is resolved quickly - within 24 hours). In these cases, the rate of ongoing business rises to over 90% and paradoxically, they can often turn into some of the most effective ambassadors for a firm.
The above statistics, if only partially applicable to consulting practices, are clearly of concern, particularly if some of the statistics are probably inaccurate in relation to consulting businesses. For example, in the case of statistic 1, the figure relating to the cost of gaining a new client is more likely to be between 10 and 15 times that of retaining an existing client.
Client and responses to quality concerns
Nevertheless, the figures emphasise the importance of looking after your existing clients. If 'zero defects' was the quality watchword in manufacturing in the 1980s, 'zero defections' might well be the cry from consulting firms in the 1990s (after Reichheld, 1990).
Statistics 2 and 3 in the list mentioned above highlight that the last person who is likely to become aware of a service problem is the person, or firm, providing the poor service - yet potentially 10 others are aware of the problem. Again, the data are probably flawed in relation to consulting.
Statistic 2 is likely to be larger and its impact greater. Unhappy clients will tell others, and often those others are likely to be influential 'opinion formers', 'influencers' or indeed purchasers of consulting services.
Statistic 3 is also likely to be inaccurate, on this occasion in a more positive direction. Most consultants should expect to be sufficiently close to their clients to anticipate problems. Nevertheless, this figure is unlikely to be more than 20-25%, still allowing at least 75% unable or unwilling to discuss the service problem with the consultant. Obtaining feedback from clients would therefore appear to be an essential business process – unfortunately, it is much less common in practice.
Statistic 4 in the list emphasises the importance of remedying poor service quickly.
Handling customer complaints
Common sense suggests that it is important to remedy a complaint - how this process is handled can, however, have a significant impact on the success of a consultant in retaining a client who has expressed concerns.
A further powerful source of evidence, which demonstrates why service matters, is in relation to the issue of client retention. Reichfield (1996) has made several studies of the relationship between client retention rates and financial performance in a range of service industries. He concludes:
“Client defection rates have a surprisingly powerful effect on the bottom line. They can have more to do with a service company’s profits than scale, market share, costs and other factors usually associated with competitive advantage. As a client’s relationship with the firm lengthens, profits rise. And not just a little. Firms can boost profits by almost 100% by retaining just 5% more of their clients”.
Research over a number of years has helped identify some of the components that help create a higher probability that outstanding service will be delivered to the client. Schneider and Bowen (1995) emphasise the three tiers of a winning service organisation as follows:
Service level tier classification:
The client tier - as a minimum, service companies must meet their clients’ expectations merely to be able “to stay in the game with their competition” –above all, they must determine the specific expectations clients have for the service delivered. In addition, Schneider and Bowen emphasise the need to also think about the clients’ needs and competencies.
The boundary tier - the second tier of service organisations is where the client meets the practice. This could be referred to as the “moments of truth” zone.
These moments of truth are the precise occasions when a client comes into contact with any aspect of your business and forms an opinion about the service you provide and potentially the quality of the consulting advice they will receive. The boundary tier contains not only interactions with your professional staff but, equally importantly, your “support” staff.
The co-ordination tier - the co-ordination tier is the management’s responsibility.
This layer is associated with ensuring that the internal support systems meet the clients’ expectations and needs. This tier is designed to ensure that “seamless”, consistent service is delivered throughout the practice.
Other dimensions
A second source of research evidence identified the following 10 dimensions of service quality:
- Reliability
- Responsiveness
- Competence
- Access
- Courtesy
- Communication
- Credibility
- Security
- Understanding/knowing the client
- Tangible evidence (the physical evidence of the service - accommodation, personnel etc.)
Both of the above sources of research relate primarily to service organisations in the USA. Neither source has focused on the particular needs and characteristics of professional service firms. Furthermore, many of the approaches suggested often tend to rely on the use of “customer/client care training” as the prime solution to the issue of providing outstanding service. Whilst not wishing to underestimate the importance of training and the communication of good practice in dealing with clients, relying solely on a customer/client care training programme as a strategy for improving service or creating a client service culture is unlikely to succeed.
Why should this be the case?
Listings reasons for customer concerns
Based on your own experience, what might be some of the more significant reasons why customer/client care programmes by themselves might not always achieve the anticipated improvements in service that is planned?
Some of the reasons you may have highlighted include:
The superficial response - In this scenario the approach adopted to improve client service relies on the smiling-face, the “have a nice day” type of solution. Whilst not wishing to underestimate the importance of courtesy, relying exclusively on this factor is unlikely to lead to real and sustained improvement. You can have pleasant, friendly staff, but if the systems by which they interact with clients are unfriendly the firm will, ultimately, fail to deliver effective service.
The shotgun approach - The panic strategy - an unfocused frenzy of activity often associated with a “sheep dip” approach to immersing staff in client service speak. Again, unlikely to provide any long term gains.
Conflicting signals - In this case, the firm, often without realising it is doing so, sends out conflicting signals - a sort of organisational schizophrenia - to staff. “Of course we want you to go the extra mile for the client - but in doing so make sure you don’t make any mistakes, or else” - or “of course we value client service, but your bonus is based solely on the fees you personally earn”.
Lack of integration - Possibly the most significant reason for failure is a lack of understanding, or appreciation of the link between the various factors which influence client service. Integration is also essential if a firm is to demonstrate consistency across functional boundaries. Addressing these, an often difficult, messy issue is central to the more effective delivery of service.
Flavour of the month - An obvious, and yet very common reason for failure is a lack of commitment to the problem. The butterfly management solution – this month “we need to be more client focused”, next month “we need to improve our debtor recovery rate” etc. Changing a culture requires persistence and effort.
A lack of innovation - In this scenario, failure occurs by staying “too close to the customer” - the professional service equivalent of IBM remaining committed to mainframes when other manufacturers had moved to PCs. Staying flexible and open to what clients are saying is a serious challenge for all consulting firms.
The professional client service diagnostic model
To fill the apparent gap in the research literature and to provide a model that could be tested by empirical research across the professions, the following four level model of service in professional service firms has been developed.
The Professional Client Service Diagnostics (PCSD) model developed from some initial work by Andrews Munro Ltd., combines some of the most relevant sources of evidence from the research field with direct, first hand experience in a range of professional firms. It is also designed to overcome, or at least minimise, the chances of failure as outlined above, by providing managers in consulting firms with some comprehensive and robust data from which to develop a client service strategy, and from which to develop a client service culture within their firms.
The model consists of some 19 different factors that describe effective service in a professional service firm. The model is structured around 4 levels, as follows:
Level 1 - Fundamental drivers - The fundamental drivers highlight the underpinning requirements that are essential for the delivery of effective and outstanding client service. Three drivers have been identified, as follows:
- Senior professionals’ commitment. Do senior professionals clearly support the importance of service?
- Staff mood. Are staff enthusiastic about the company and its activities?
- Practice learning. Does the practice learn from successes and failures?
Level 2 - Critical processes - Four management processes within the practice are identified which are critical if all staff (again, including partners) are to be able to provide improvements in client service:
- Simplicity. Are internal processes as straightforward as possible?
- Focus. Does everyone understand the aims of the business and precisely how he or she needs to contribute?
- Staff capability. Are all staff (and partners) of the right calibre and well trained?
- Integration. Do different parts of the business act in unison?
Level 3 - Key organisational capabilities - In this layer of the model, the emphasis is on the critical capabilities that need to be developed by the practice in order to deliver service. Three factors have been identified:
- Responsiveness. Can we move resources quickly to meet new opportunities and client requests?
- Productivity. Are we efficient and effective?
- Thoroughness. Do we get things right first time (every time)?
Level 4 - How clients experience service - The top level of the model summarises the dimensions which relate to the “moments of truth” mentioned previously; how your clients experience service when they interact with you and your staff. At this level, 9 dimensions are suggested, as follows:
- Speed. Are we quick and timely?
- Adaptability. Can we customise our service to particular requests?
- Access. Can clients locate key internal contacts with ease?
- Courtesy. Are we polite and welcoming?
- Environment. Are our premises agreeable places in which to do business?
- Reliability. Do we deliver on our promises?
- Professional competence. Are we professionally/technically competent?
- Professional credibility. Are we perceived as credible in our selected markets?
- Proactivity. Do we understand our clients’ business and difficulties and suggest solutions proactively?
In addition to the 4 levels, it is also important to recognise the vertical links between the various dimensions; for example, the link between level 1 factors such as speed, adaptability and access the level 2 capability of responsiveness.