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Enhancing Service Quality: Strategic Investments for Increased Customer Satisfaction and Profitability

Investing in service quality, especially in physical infrastructure, is essential for enhancing customer satisfaction and driving profitability. This guide explores the financial implications of quality improvements and their measurable impacts on customer retention, market share, and overall revenue. Key insights include determining where and how much to invest, expected returns, and essential metrics such as Return on Service Quality (ROSQ). By aligning service quality with customer needs and internal processes, businesses can create significant value. Learn how to measure quality improvements and confirm their financial benefits.

caleb-stokes
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Enhancing Service Quality: Strategic Investments for Increased Customer Satisfaction and Profitability

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Presentation Transcript

  1. Service Quality and Profits

  2. Service recommendation • “Physical evidence in terms of infrastructure scores low in Customer satisfaction . Investment in refurbishment would lead to better satisfied customers” • What returns can I expect on this quality improvement?

  3. FAQs • Where should I invest • How much should I invest • How much return can I expect • How will I measure the improvement • How can I trace the improvement to this attribute ?

  4. ROSQ(Return on Service Quality) • Quality is an Investment • Quality efforts must be financially accountable • It is possible to spend too much on quality • Not all quality expenditures are equally valid

  5. Relationship • Service • Profit ?

  6. Past metrics • Impact on share prices to significant qlty improvements (SEARS) while holding advt expenditure constant. • India Posts, Indian Railways

  7. Marketing effects • Offensive Defensive Attraction of new Retention clients

  8. Service New Customer Acq Customer Retention Market Share Lower costs Reputation Profits Vol of purch Price PRemium Sales Price Prm Margins Word of mouth

  9. Balanced Score Card • Customer Perspective • Financial Implication • Operational Measures - Effectiveness • Innovation and Learning

  10. Financial perspective Cost of customer acquisition Ability to charge a price premium Volume increases Customer referrals Cross sales

  11. Measuring Customer Satisfaction • SERVQUAL

  12. Operational Efficiency • Ability of system to cope with service failure • Service recovery strategy • Standards-Customer defined and company defined • Wastage reduction

  13. Innovation and Learning • Number of new products • Return on innovations • Employee skills • Time to market • Time spent talking to customers

  14. Application of BSCStrategy map • Financial outcomes are possible only if targetted customers are satisfied • Identify cause and effect • How the company will create value and for who ? • Linking critical internal processes to deliver best value at optimum cost

  15. Exercise- Increase customer service time in restaurant Financial Metrics Customer Perspective Metrics Internal process improvement Metrics People metrics (Internal, Learning and Growth)

  16. Recap • Sources of profit in defensive mktg • Sources of profit in offensive mktg • What is ROSQ model?

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