Service Excellence: What It Means to Customers
The J.D. Power 2012 Customer Service Champions represent an elite group of companies that focus on service excellence. These companies achieve notably higher levels of customer loyalty and personal recommendations (advocacy) from their customers, compared with companies whose service delivery is at or below industry norms. Customers of the J.D. Power 2012 Customer Service Champions are also much more vocal about referring these brands to others. In fact, customers refer these brands nearly twice as often to others than do customers of all the other 800+ brands measured.
Recommendation and Repurchase Levels by Customer Service Excellence
Source: J.D. Power and Associates 2011 US Syndicated Studies
The J.D. Power 5 Ps: The Drivers of Satisfaction
Today's customers expect service providers to deliver in every way. They want the right people to serve them; the right packaging or presentation; a seamless and hassle-free process; a product that meets or exceeds their expectations; and they expect all of this at a reasonable price. Performing well in some or all of these key criteria is essential to achieving service excellence.
Source: J.D. Power and Associates
People: Friendliness and courtesy are important, but the J.D. Power 2012 Customer Service Champions go beyond that. Their employees are encouraged to offer solutions and are empowered to solve problems. Being proactive and anticipating customer expectations is another key strength.
Presentation: True success in presentation goes beyond providing a clean, inviting facility or attractive product packaging. J.D. Power 2012 Customer Service Champions add value. For example, in the banking industry, a best practice is designing the bank lobby to resemble a living room, with comfortable furniture, refreshments for customers, and other amenities one might find at home.
Price: Everyone likes low prices, but J.D. Power 2012 Customer Service Champions go beyond this. They strive to keep price increases to a minimum; proactively inform customers about low-cost alternatives; and focus on demonstrating value.
Process: Customers appreciate easy, effective, and quick interactions. J.D. Power 2012 Customer Service Champions make it easy for customers to get what they need by offering conveniences such as short wait times, fast problem resolution, or hassle-free ordering, delivery, and return policies.
Product: Regardless of industry, J.D. Power 2012 Customer Service Champions excel in delivering a consistent and trouble-free product, even though the nature of that delivery may widely vary. Consistency and problem-free products are key.
J.D. Power 2012 Customer Service Champions: Methodology
To identify the J.D. Power 2012 Customer Service Champions, the company analyzed its industry-wide U.S. customer satisfaction research conducted in 2011. Supplemental benchmark research was then conducted to provide additional insight. In all, more than 800 brands were evaluated in the following industries: airline, automotive, banking, grocery, healthcare, pharmacy, home builder, hotel, insurance, investor, online retail, rental car, sporting goods, telecommunications, and utilities.
The combined data set was used to create a cross-industry list based on J.D. Power's proprietary research index methodology. To identify which brands would qualify, five critical-to-customer drivers of satisfaction were measured: People, Presentation, Price, Process, and Product. All brands that met the predetermined research criteria were then evaluated on the following:
1. Within Industry: For each study, or where there were multiple
studies within one industry, J.D. Power segmented those with an overall index
score at the 80th percentile, which established the first threshold. Then, to further ensure that the highest-performing brands were selected, a second benchmark was established. Only those brands that scored 10 index points above the 80th percentile within their respective industry were eligible to be considered as a J.D. Power 2012 Customer Service Champion.
2. Across Industry: Comparing brand performance across industries presents unique challenges vs. comparisons within an industry. Thus, brands were further scored by creating industry aggregates based on the industry similarity in both the type of products or services provided and the distribution of scores (e.g., financial services and insurance were combined, as were utility and telecommunications). Scores of the aggregated industries were then averaged and a standardized score (z-score) for each brand was calculated relative to this competitive aggregate. A z-score is a common approach of comparing scores across industries (or any distribution) where the means are notably different. Only those brands with a z-score of 1.0 or greater were eligible to be considered as a J.D. Power 2012 Customer Service Champion. A z-score of 1.0 compares to the upper one-third of the distribution, such that about 68% of all scores are expected to be lower.
3. Number of Brands within Industry: Because the number of brands within an industry varies widely, so does the probability that brands within an industry can meet the above two criteria. That is, in industries with numerous national or regional brands included in the rankings, such as utility, financial services, and insurance, there will be more brands that meet the criteria listed above than among industries that have fewer brands. To account for these differences, a cap was applied so that only the top five brands within a specific industry were eligible for inclusion as a J.D. Power 2012 Customer Service Champion. The top five brands were determined by taking the product of the number of index points above the 80th percentile and the z-score among brands that were eligible for consideration as a J.D. Power 2012 Customer Service Champion.
Of the original 800+ brands analyzed, only 50 brands met both criteria. These brands not only excel within their industry, but are also identified as leading brands across all 15 distinct industries analyzed. Additionally, these 50 brands excel in their relative strengths on the 5 Ps, compared with their industry mean.
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