Here is a a copy of highlights of the Mind the Gap research paper. You can download the full pdf here
MIND
THE GAP -
What companies are missing and what to do about it
Conclusions of 12 years of Service Delivery Gap Polls
and Surveys, 2002-2014
Robert Craven
The Directors’ Centre, May 2014
The
Directors’ Centre Ltd ©2014
Background
The
publication of Customer is King
(2002) was based on the assumption that there was a gap between:
- 1) What companies believed they
delivered, and
- 2) What customers believed they
received.
This is
referred to as the service delivery gap.
While
plenty of models and anecdotal evidence existed at the time (eg Parasuraman, Zeithaml & Berry (1985), and
subsequently Bain & Co, (2005)),
it was felt necessary to test the hypothesis in the field. This report draws
together The Directors’ Centre’s findings
and conclusions of 12 years of relatively informal data gathering.
Results
A service
delivery gap is reported consistently and across all sizes of business and
across all sectors that we came into contact with (professional service,
service and manufacturing firms).
· 80% of companies reported that they
deliver an above-average customer experience.
·
Only 14% of the same companies believe that their clients think they
received an above-average customer experience.
·
When
asked, the actual clients (in a smaller dataset) supported the companies’ views
about the customer’s experience: only 11%
of the actual clients felt they received an above-average experience.
This “service
delivery myopia” or “deafness” appears to be most apparent in professional
service firms: the firms are the most optimistic and their clients’ reported
experience is very low.
Table 1
Table 2
Observations
Like male
drivers, most companies believe that they are above-average.
Paradoxically,
they are not so confident as to say that their clients would agree. The clients
(as suggested by the companies themselves) support the view that few supplier
companies deliver above-average service levels.
The gap
appears to remain relatively consistent over time and between industries.
It
surprises the authors that suppliers appear to hold logical but inconsistent
points of view:
- A totally unrealistic view (over-inflated?) of the customer experience they are delivering
- A
totally realistic view of what their
clients think of their delivery.
This
cognitive dissonance, the discomfort experienced when one holds two or more
contradictory ideas at the same time, seems to be buried in their psyches (Festinger,
1962).
It is
argued that the delivery gap may occur for a number of reasons:
- Basic blindness or inability to take on customer feedback
- Being too much in love with one’s own product/service
- Not being close enough to the customer
- Failure to track and monitor every step of the customer journey
- Preoccupation with hard measures and statistics that sit neatly in a spreadsheet
- Forgetting the purpose, the why, of their business
- Inability to believe that there could be a better way of delivering
- Smugness that the customer is not always right
- Failure to design new products/services that exceed customer satisfaction.
The service delivery gap model developed by Parasuraman, Zeithaml and Berry (1985) identifies five different gaps and the list above could fit neatly into these five categories:
1. The customer gap: the gap between customer expectations and customer perceptions.
2. The knowledge gap: the gap between consumer expectation and management perception.
3. The policy gap: the gap between management perception and service quality specification.
4. The delivery gap: the gap between service quality specification and service delivery.
5. The communication gap: the gap between service delivery and external communications.
Consequences
It would appear
that there is a cause-and-effect (chicken and egg) loop that is difficult to
unpick eg does a service delivery gap cause an inability to take on customer
feedback or is it the reverse?
While the
cause-and-effect loop is interesting to explore elsewhere, it is believed that
the consequences of these gaps impinge significantly on the profitability and
sustainability of the business (Bain
& Co, 2005).
A word of
warning: correlation does not
imply causation; a correlation between two variables does not necessarily imply that one causes the other! What is not in
dispute is the consistent presence of the gap!
Key
Points
Excellent
customer service is difficult to deliver
While
excellent customer service is easy to describe it seems to be much harder to
deliver, consistently. Good relationships are hard to build and even harder to
maintain.
Business
myopia
Businesses
seem to be blind to what the customer really wants or needs. Too much in love
with their own product/service and their own processes, businesses fail to see
or acknowledge how they are failing their customers. We regularly heard statements like, “Customers
don’t know what they really want”, “We still deliver the best product but
customers just don’t seem to get it”.
Communications
gap
Many
businesses simply fail to understand who their customer is, why and when and
how and where they buy the product/service. The company then proceeds to use
inappropriate messages often via the wrong channels.
Confusing
products and services with markets and customers
The product/service-centric
view of the world is doomed in the long run; it will fail to follow the needs
of customers as their tastes and technology change. The business needs to see
the product/service through the eyes of the customer.
Similarity
Most
businesses are competing in over-cooked marketplaces: more competitors
competing on price, weary customers progressively less impressed by
empty/vacuous marketing messages. Similar-looking businesses employ similar
people with similar qualifications to use similar software and hardware to
create similar-looking websites to sell similar-looking products to similar
people at similar prices.
Five-year-old-itis
Too many
businesses are still working with five-year-old assumptions about who their
customer is, what they are buying, for what reason, the right price point, the
right sales channel and who or what the competition really is today.
Out-of-date, it is no wonder their latest P&L doesn’t match their business
plans.
Hard
vs Soft thinking paradox
It is
argued that hard-thinking (measuring and analysing accounts) conflicts with
soft-thinking (relationships and service). An impact of chasing hard results is
that costs will be squeezed to maximise profits (at the cost of customer
service performance).
Solutions
In some
senses, the solutions feel like a return to the basics of a first year Marketing 101 course. Somewhere along
the way, businesses have lost the plot. The key is to design the customer
journey through the eyes of the customer. The following strategies and
initiatives will start to address the service delivery gap issues:
- Get
customer-centric
- Identify key target customers
- Create a clear value proposition and a clear message and voice
- Design and align sales, marketing and operations
- Use the appropriate channels to communicate.
Background
This was
never intended to be an intellectually rigorous piece of research but simply a
privately-funded survey to get an understanding of some of the key behaviours
and drivers in this field.
There has
been much talk of customer experience and also of service under-performance;
the survey was designed to test some crude assumptions and propose some
conclusions.
Commentary
Everything
and nothing has changed between 2002 and 2014. On the one hand, communication,
design, production and distribution are cheaper and faster than ever. On the
other hand, there is still a need to engage, on a personal level, and to
respond to customer wants and needs in a way that they find accessible and
compelling. Businesses that fail to address these apparently contradictory
pressures will fail in the marketplace. (Think of Encyclopaedia Britannica, Kodak and Blockbuster.)
The high
scores for the companies’ belief that they deliver an above-average experience
is supported by polls taken at the same meetings
asking businesses to produce scores for their financial, their marketing and
their operations effectiveness. Crude results from just over 20,000 participant
scores are:
- Financial performance: 6
- Marketing performance: 4
- Operations performance: 8
Owners and
directors clearly believe that they do deliver a high quality operation (their product/service).
This supports the fact they would also believe that they deliver an above-average
customer experience. It appears they might be too much in love with themselves!
References
Allen
J & Rigby D -
The Consumer of 2020, Global Agenda, Jan 2005
Bain
& Co - Closing
the Delivery Gap, 2005
Craven
R - Kick-Start
Your Business, 2001
Craven
R - Bright
Marketing, 2007/11
Craven
R - Customer is
King, 2002/2014
Craven
R - Grow Your
Service Firm, 2011
Festinger L - Cognitive
Dissonance, Scientific American, 207(4), 93-107, 1962
KPMG
- 7 Steps to Better Customer Experience
Management, 2011
Levitt
T - Marketing
Myopia, Harvard Business Review, 1960
McKinsey - Why Most B2B Marketing Messages
Fail to Move the Customer, 2013
McKnight S - Bridging The Gap Between Service Provision and Customer Expectations,
Emerald 10, 2009
Parasuraman A, Zeithaml VA &
Berry LL - A Conceptual
Model of Service Quality and its Implications for Future Research, Journal
of Marketing, 1985
Shahin A & Samea M
- Developing the Models of Service Quality Gaps: A Critical Discussion,
Business Management and Strategy, 2010
Temkin
Group - The ROI
of Customer Experience, 2012
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Appendix
About
the Author
Robert
Craven, BSc(hons), Economics and Politics (Bath) and MBA (Warwick Business
School) is Managing Director of The
Directors’ Centre Ltd.
Formerly
Director of Consultancy and Training, and Teaching Fellow, at Warwick Business School’s Centre for
Small and Medium-sized Enterprises and Visiting Professor at ESC Toulouse. He is currently Programme
Director (Export Growth Masterclass) at Cranfield
School of Management. Robert has written six, and co-authored two, business
books aimed at helping the owners and directors of growing businesses.
About
The Directors’ Centre
A management
consultancy that focuses on delivering sales and profit results to the
directors of growing businesses. Led by Robert Craven, it is know for a
free-of-nonsense approach to helping clients run the businesses they really
want to run. Its approach is highly practical and results-oriented. Clients
include: Bingham’s, Hobbs House Bakery,
Barclays, AirBus, Sandals, LandRover Jaguar, Ritz Carlton.
The
Directors’ Centre Ltd ©2014
