The most disciplined of the firms not only exploit the data to identify problems with their products and services, but also get everyone on staff involved in fixing these problems...with an eye on their financials.

How do they effectively navigate the perennial Cost-Quality compromise?

They religiously track customer feedback through Net Promoter Score, etc along with key financial metric — like cost per customer. Front line staff quickly learn to track the short-term tradeoffs and naturally try to keep costs under control.

In time they also figure out the longer-term balancing act. For example, if they honor expired warrantees, the cost of service will rise, but so does customer loyalty — meaning higher customer retention and more referrals.

It is amazing the kind of decisions these companies are able to push to the front-line

· Should they schedule yet another service visit?
· What about forgiving a bounced-check fee?
· How to set customer expectations around time-to-resolution?

These are difficult decisions that often consume management time in an average organization. Read Full Post