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Satisfying Customers

— By: Michael F. Corbett & Associates. Ltd.
As printed in the Firmbuilder.com website

In 1999 the importance of customer satisfaction firmly entered the dialogue of the outsourcing industry. The outsourcing provider's brand name is becoming increasingly important as the marketplace matures, and quality is a central part of that brand image.

Providers reported that the ultimate purpose of any customer satisfaction program is customer retention and internal process improvement. It's difficult and expensive to make new customer relationships. It's far more effective to build and expand upon existing relationships.

In a research program conducted by Michael F. Corbett & Associates, called The Global Outsourcing Quality Report, 88% of firms reported overall satisfaction with their outsourcing providers and 80% of firms reported that they would renew their existing contracts without going out to competitive bid. The participants in the program were customers of three outsourcing service providers: Trammell Crow Company, The Haas Corporation, and Johnson Controls.

Key Determinants of Outsourcing Customer Satisfaction

• Relationship Management

• Responsiveness

• Integrity

• Technical Competence

• Flexibility

• Personal Service

• Value

• Productivity

• Communication

• Innovation

The Global Outsourcing Quality Report as presented at The 1999 Outsourcing World Summit
Consistent strengths in the relationships studied were relationship management, responsiveness, and technical competence. The scores were lower, which is not unique to these companies but reflective of an emerging trend in the industry as a whole, in the areas of communications and innovation. It is the consistency of the information provided to the customer, by all of the individuals responsible for the relationship and at all levels, that is central to improved communications. Innovation, which is increasingly driving decisions to outsource, can be lost when the provider becomes too operationally focused over the life of the relationship. Innovation is often at the core of the relationship when it was created and it then must be infused on an ongoing basis.

Customer satisfaction information can be a useful tool for making internal changes. "It was a valuable tool for us. It helped us organize our thinking. When you look at this and you say, gee, we scored real well here. Let's pat ourselves on the back. But, wait a minute, we didn't do quite as well in that category. How come? What are we looking for? What might the problems be? So in our strategic planning this helped push a lot of our thinking about how we're going to approach new bidding and how is past performance impacting our business," said Mark Wagner of Johnson Controls.

In talking to his company's results, Thad Fortin, president of the Haas Corporation noted the importance of staying close to two critical but essentially different parts of his customers' organization: the client executives - those responsible for the contracting decisions - and the end customers - the ultimate recipient of his firm's services. "The difference between a client and a customer is clear in our situation. A company like General Motors has a corporate staff that we're involved with. They're our client. Our customer is the actual facility or plant that we're working in. What our client wants us to do and what our customer wants to do in a lot of cases are two different things," said Fortin.

For more information on HAAS Corporation's benchmarking to improve client communications, click here.

© 2002 Michael F. Corbett & Associates, Ltd. All Rights Reserved.

Michael F. Corbett & Associates, Ltd. is a research and training company globally recognized as the leading authority on the topic of outsourcing. Its founder, Michael F. Corbett, has personally trained thousands of executives on how to use outsourcing as a powerful management tool. For more information on the company's services, please call 845.452.0600 or visit www.corbettassociates.com. For more information on the topic of outsourcing, visit www.firmbuilder.com.

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