Tuesday, August 31, 2010

Moving Parts Theory of Customer Service

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I'm quoting myself here again, but this piece is so old by now that I'm giving myself permission to do so. Oh yes, it's also terribly dated as you'll see - but it makes a point that still seems relevant

"Try to remember back to the first time you rode in a car with modern features like power steering, brakes, antenna and windows, a stereo tape deck, air conditioning and a sun roof. With all those new and complicated moving parts, didn't it occur to you that, sooner or later, something was bound to go wrong?  And didn't it, usually?

This is the principle behind the "Moving Parts Theory of Customer Satisfaction", which originated from a series of research studies I managed for the personal services side of a full-service bank (Northern Trust Bank, to be specific, my employer at the time) on the topic of customer satisfaction. When the findings showed areas like Personal Banker services, credit cards and checking services getting relatively lower satisfaction scores (though still quite high), while regular savings accounts and especially safe deposit box services (remember them?) received the highest scores, the Moving Parts Theory was born.

According to this theory, service areas or accounts having greater transaction volume and/or more personal interactions (i.e., more "moving parts") are presumed naturally to produce relatively lower satisfaction levels. After all, what can go wrong with delivery of a safe deposit box service? Originally called the "Moving Parts Hypothesis of Customer Service", the concept was elevated to a theory when, upon subsequent studies by the same bank, the effect persisted.

Implications of the Moving Parts Theory

One lesson learned from this experience was that the appropriate frame of reference for analyzing such satisfaction scores is to compare the bank's overall scores and those of each department, not against each other, but each against itself over time. Otherwise, ridiculous conclusions such as this can be drawn: "The Safe Deposit Box area is providing higher quality service than are the Personal Bankers."

Management must decide how high is up for satisfaction scores for the firm as a whole and for each service area. Only then can judgments begin to be made about the quality of service provided and progress toward goals. Of course, those management decisions need to observe the strategic imperatives of the firm. The bank that is committed to growing its "upscale" business with more sophisticated services and accounts may be well advised to expect increased volume of customer contacts, inquiries, and, perhaps, even lower satisfaction scores as it embarks on that program.

However, in the credit card business, it has been shown that while the Moving Parts Theory does seem to apply relative to cardmember volume, it need not automatically lead to lower overall satisfaction levels. The answer seems to lie in developing a professional and efficient customer service process as a proactive and strategically integrated program, not merely a remedial one."

Could it be - is this old message still on target?
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