Sub-optimal Customer Service... Who pays for the Cost of Quality?

The COQ or Cost of Quality (or non-conformance in ISO terminology) is the cost associated with not Doing It Right The First Time (DIRTF) or not (entirely) doing what the customer was expecting. [Did I throw enough acronyms at you?]

OK, let's start with two real-life service failures and remember that memorable customer service experiences are a balanced combination of the What (transactional – rational) and the How (feeling – emotional).

Service Failure One
I walked into the Subaru dealership that has serviced my car for twelve years. I am into my third Subaru. Consistency and relationship is important, right? Well, I have enjoyed the service of the same service consultant for al those years. So, Ken greeted me by name and chatted briefly before he handed me over to the parts person to buy a new halogen headlight bulb. That is of course always a nice experience, to be welcomed and recognized. The transaction cost was $16 and change. Having arrived home I proceeded to change the bulb and could not do it because it was totally the wrong one. So, this was not doing it right and I had to drive back: two times 15 minutes of my time wasted plus the time of trying to make work what could not. The value of my time is the Cost of Quality. I charge out at a consulting rate commensurate with my 20 years experience, so you can do some math here…. Now, here comes the 'recovery'. When I came back, Ken was immediately concerned and asked what was wrong. Over to the parts person again who immediately recognized his mistake, gave me the right bulb and told me that of course I would not have to pay for the $2.90 price differential because of "all the hassle I have caused you".

Of course it is not hard to figure out that I was 'out of pocket' here. However, accidents do happen and there was no reason to keep feeling grouchy about this, because at every turn it was handled well, against a background of an acknowledged relationship.

Service Failure Two
Over now to the opposite experience. I used the Avion points of my Royal Bank VISA card to purchase a ticket on WestJet – partially points and partially cash on my card. Lo and behold on my statement I see a charge for the total ticket price. First call to the credit card call center, who told me I had to call the airline. Then a call to the airline who told me the Avion person had used my credit card number to make the purchase. Third call: again to Avion. They looked into it and concluded their person had made a mistake and used my credit card instead of the Bank's to make the purchase. They apologized and promised to make the correction; this happened.


A day later I got upset. I had wasted well over an hour of my time and had received no attempt to make good for me!!! This started to bother me; I bit the bullet and phoned Avion and aired my disappointment, telling them why. They 'got it' fortunately and offered me 6,000 points (15% of the points I used). I accepted this and thanked them.


The Lesson Learned
Of course the good thing was that the CSR at Avion was empowered and reacted promptly to my request. Yet, they only mollified me and the memory still sticks; who likes to spend an hour-plus on the phone with call centres???

When the ball is dropped always offer to make good. Had Avion done this right and apologized for my hassle like the parts person, quite frankly I would have accepted half the amount of points.

Most organizations have no appreciation of the Cost of Quality caused by their service failures. This COQ does not only impact the customer, but of course also their own operations cost. So, if you are not careful both side lose. Unless of course if the provider manages to turn this into a memorable experience…


What say you? Comments? Ideas?


Eric Fraterman
eric@customerfocusconsult.com
www.customerfocusconsult.com