Research Background

In the interests of keeping this short and utilitarian I will touch on the highlights of the Customer Satisfaction Research that has gone into identifying the Ten Values of Excellence.

In the mid 1990’s the ‘Total Quality’ movement was in vogue. Inspired by names like Deming and Crosby, Shewhart, Ishikawa and Juran the quality movement emphasized statistical control, process analysis, applying the scientific method with models like PDCA (Plan-Do-Check-Act) and integrating the voice of the customer for data driven decision making. It is this last point in reference to the ‘voice of the customer’ and surveying customers that our consulting firm first became involved with.

Capturing the voice of the customer in the early days of America’s ‘Quality Renaissance’ was a fairly clunky and inefficient process that depended heavily upon pen and pencil surveys, telephone interviewing and in person focuses groups to glean actual customer experience data. While these data gathering methods varied widely when it came to quality control the gold standard at the time was to use machine readable forms – also known as Scantron Forms to be able to capture and process data by having people ‘color in the bubble’ on a specially formatted sheets with a timing code that could be read by an optical mark reading scanner.

While Scantron forms were quite a breakthrough for satisfaction survey administrators they had to be custom designed and printed from the Scantron Company and were often prohibitively expensive – especially when a single question edit meant you had to reprint the entire batch of surveys. Since we were a little bit geeky we noticed that the latest tools and software used in desktop publishing allowed us to create our own machine-readable forms, and once we figured out the laborious process of programming the optical scanners to read the forms – suddenly we could do the same thing that the Scantron company did – for a lot less money.

My business partner in the Quality consulting business at the time was in charge of Quality Management at a large government Hospital and was already responsible for a huge amount of satisfaction measurement where we could test our methodology across many departments. It wasn’t long before the demand in satisfaction measurement in the private sector soon pulled us in and for a short time we became the ‘go to guys’ for designing and administering customer surveys for all sorts of clients and industries.

As organizational development consultants, when it came time to reveal the findings and analysis of each study, it was very easy to pair our data with improvement recommendations which of course, lead to all kinds of other work in training, planning etc. We did literally hundreds of surveys and collected mountains of satisfaction data. But the geek inside of us was not quite satisfied.

The internet was exploding at the time and we were determined to find a way to bypass the data collection process away from printed forms of any kind. As an example, one of our clients was New York University where we had to code and print separate student satisfaction surveys for every class they offered every semester. That means we had to print hundreds of different sets of surveys for each class, code them so we could scan them and separate the databases, mail them to the clients, get them filled out and mailed back and then sort them (sometimes re-enter the data from a form that was mutilated) and finally get the data into a database we could work with. With 65,000 students every semester this quickly became cumbersome – and this was just one client.

Even with the efficiencies of machine- readable forms we knew there was a limit to how many projects we could handle at a time – even by adding interns and new employees processing all this paper. We elected to develop our own software and a web- based application that could do all of the data collection – much like the many platforms that are available today for online survey administration. We invested a lot of money and went through the slow development process of coding a brand-new software monster so it could capture the data and do some instant results generation, plot statistical highlights and even populate simple radar charts – which was pretty cool technology at the time. So now the pace of our data collection and analysis could be greatly increased.

We were also teaching at San Diego’s UCSD and sharing our Satisfaction models and methodology with our students who were all required to do their own satisfaction studies on the businesses of their choosing and who were required to complete comprehensive survey projects using this methodology. Many of our students chose large commercial brands from supermarket chains and restaurants to technology companies and government agencies. All this data from a wide variety of industries kept coming in and we continued to combine it into our master brain trust of knowledge about customer satisfaction and excellence.

The phenomenon we discovered was that we could see the real similarities in what customers were saying made them satisfied – no matter what the industry, product or service. We continuously reviewed the statistical data that fell into these same patterns again and again and again.

What was also interesting as we did our organizational development consulting with various clients was that we could see the relationships between actual sales results numbers and similar factors signaling return and recommend rate and the way that these supplier’s were scoring. While our eyes were bleary from data analysis we felt sure that we had some insights and knowledge that were - dare we say - ‘predictive’ about customer behavior when it came to customer satisfaction and what customers were saying about what ‘excellence’ means, why they would return to buy again or whay they might abandon a particular supplier, product or service.

We hired an advanced mathematician to combine and correlate our humongous database (over 2 million respondents) and to confirm for us what we thought we knew about patterns of customer satisfaction. After sliding food under his door and feeding an all-night caffeine addiction for a few weeks – he finally came back to us with his results. Yes – indeed we had discovered identifiable and predictable patterns.

The results of what we found are what I call: ‘The Ten Values of Excellence’, which in effect means that, Customers will behave more favorably (return & recommend) when the supplier scores highly in each of these ten areas which combine to create an ‘overall score’ or impression of excellence representing the customer’s overall satisfaction experience.

We also discovered that Customer Satisfaction is a holistic experience and that the Supplier must give attention to each of these ten areas. We found that scoring low in any one of these ten ‘values of excellence’ can sabotage the overall level of satisfaction score, and thus influence customer loyalty behavior. In effect, what we discovered were the ten areas you need to pay attention to and how you have to score to get customers to describe you as ‘excellent’ and the extent to shich they will return to buy again or recommend you to others.

Interestingly, we were able to apply our scoring system (1 to 10 likert scale) to each of the values of excellence and we were able to correlate scores with customer return and recommend rate behavior. That means we can broadly predict the extent to which a customer will return to buy again or recommend your business to others based upon these scores, and how their attitudes and behaviors will change when you don’t score as well and rate you as excellent. This is the basis for the audit of excellence process presented.

So why is Customer return and Recommend Rate so important? R&R is arguably the most important business metric in any customer supplier relationship. And once again, every relationship is a customer supplier relationship.

You might be a retail business that depends upon a local customer base where you need repeat business to be profitable. Perhaps you have local competitors and they are scoring higher than you in one or several of the Ten Values of Excellence. Where do you think your customers will be shopping? What is presented here is critical strategic knowledge for your enterprise. You will find that you resonate with each of these values and are probably already applying many of them instinctively to what you do, but what is presented her eis an integrated model, where each part is important.

Even if you don’t directly interface with customers in an industry like retail or hospitality, your individual work product or that of your department inside a larger company has a customer- or maybe your boss or another department who receives your work product is your only customer. These same values will still apply. The comprehensive nature of the Ten Values of Excellence is that these values will apply to a lot more than simple front line customer service. In fact, this audit can directly or indirectly touch nearly every aspect of a business operation. What is offered to you here is a comprehensive system and methodology that will insure you are looking at all of the important areas, creating a current baseline impression of how you are doing now, and guiding your improvement efforts so that you may increase your level of excellence.

While it seems like the subject matter here focuses on Customer Satisfaction – as it does, the topic is Excellence. It is important to remember again that ‘Excellence’ will be defined by your customers. You can call yourself anything you want, but unless you are scoring high across the board in each of the Ten Values of Excellence, your customers will not be relating to you as if you are excellent.

To help us get on the same page, The Ten Values of Excellence are:

QUALITY EXCELLENCE

VALUE EXCELLENCE

TIMELINESS EXCELLENCE

EFFICIENCY EXCELLENCE

ENVIRONMENT EXCELLENCE

COMMITMENT EXCELLENCE

CONNECTION EXCELLENCE

SELF MANAGEMENT EXCELLENCE

TEAMWORK EXCELLENCE

INNOVATION EXCELLENCE

We will review the complete definitions and sub constructs of the Ten Values of Excellence shortly.

Another insight from our research was discovering that customer behavior essentially fell into three major categories – Dissatisfaction, Indifference and Satisfaction.

On our 1 to 10 scale overall, we discovered not surprisingly, that as customer behavior decreased (when they perceived the supplier a ‘not excellent’), they became increasing dissatisfied and even irritated, resulting in a negative return and recommend rate effect.

Overall scores of 4.2 or lower meant that not only were customers not going to patronize the supplier, but they were actually telling other customers not to do so as well- on an increasing basis as scores get lower.

Obviously, this is a disastrous effect for a business, an individual worker or manager when they are perceived as ‘not excellent’ and lies at the heart of the formation of a negative reputation.

We were also able to identify patterns of mediocrity. The Zone of Customer Indifference correlated with patterns of the lack of customer loyalty. While customer perceptions were not necessarily negative when scores ranged from 4.3 to 7.9, customers expressed no preference and had zero predictable return and recommend rate. While customers might utilize a supplier who is mediocre because of one or two positive attribute such as nearby location, fast service etc. their loyalty as customers was fickle and they were vulnerable to being stolen by a more satisfying supplier.

The interesting threshold for positive customer return and recommend rate to occur was surprisingly high at 7.9 on a scale of one to ten. An important insight from our analysis was that suppliers had to score relatively high to achieve any positive return and recommend at all but that return and recommend rate behavior then increased nearly exponentially as scores increased.

Measurable return and recommend rate goes way beyond 100% and can reach as high as 1600%. That means essentially that customers are telling customers who are telling customers who are telling customers about their satisfaction and the excellence of the supplier.

In this day of social media broadcasting a single Facebook post about a positive experience can reach thousands of people. According to our research, ‘Excellence’, being described as ‘World Class’, and ‘Known as the best’ correlates with overall scores of 9.24 or higher.

Scoring a ten in each of the Ten Values of Excellence for a perfect overall score is nearly impossible for any enterprise, and still something we have never seen, but achieving a score as high as 9.24 means that each of the Ten Values of Excellence have been given great attention resulting in very desirable customer impressions.

See the Customer Satisfaction Behavior Curve Below:

So, in summary, we have seen that ‘Excellence’ is defined by customers who are looking for very specific things that combine to form the complete customer experience impressions of your product or service as the supplier.

These quantifiable and measurable impressions in ten specific areas will determine: If a customer will come back, what they will be saying about you to others and ultimately- the extent to which you will be known as ‘excellent’.