How Much Do Product Quality and Service Quality Influence Customer Behavior?

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Satisfaction has always been a cornerstone of what we understand to be total quality in products and services, as perceived by the customer. Unfortunately, satisfaction, which measures the attitudinal response to the functional and tangible elements of value delivery (time, accuracy, completeness, suitability, price, functionality, etc.) has been proven to have very little impact on, or connection to, actual customer behavior.

Even total quality icon W. Edwards Deming believed that satisfaction was not an ineffective metric for understanding the effect of satisfaction of tangibility on customer actions. In his book, Out of the Crisis (MIT Press, Cambridge, MA, 1982, p. 141), Deming said: “It will not suffice to have customers that are merely satisfied. An unhappy customer will switch. Unfortunately, a satisfied customer may also switch, on the theory that he could not lose much, and might gain. Profit in business comes from repeat customers, customers that boast about your product and service, and that bring friends with them. Fully allocated costs may well show that the profit in a transaction with a customer that comes back voluntarily may be 10 times the profit realized from a customer that responds to advertising and other persuasion.” This quote appeared in my first book, Customer Retention (ASQ Press, Milwaukee, WI, 1995, p. 9).



So, what is the role of tangible quality on customer behavior? And, what is the most actionable way to measure it? Based on extensive consulting, training, and research experience, in b2b and b2c verticals around the world, I’d suggest that much of tangibility is about the emotional and memorable underpinnings of trust and confidence these elements represent. As noted in earlier pieces (http://www.targetmarketingmag.com/blog/customer-centric-trust-based-relationships-humanity-emotion-profits), there is an emotional subtext to all components of value delivery, whether tangible or intangible. Especially with regard to tangible value elements, these “table stakes”, when delivered to spec or as expected, will help drive trust, confidence and future consideration. When the basics are not attained, tangible element under delivery will undermine trust, and influence negative downstream behavior.

Trust formation can be traced organizational rules and process execution, and it is built on the customer-related and employee-related vision, values, and mission regarding transactional experiences and marketplace behavior, through communication and purchasing or service. Trust, externally, is best understood as reputation and image: There are basics associated with trust, such as privacy, consistent delivery of essential elements of tangible value, and building and sustaining a proactive, positive, customer-centric reputation within the marketplace.

Building trust in a customer-supplier relationship begins with meeting these essential customer requirements. Briefly, the customer needs one or more elements of a supplier’s product or service, resulting in that customer moving from prospective to engaged, ‘new customer’ status when an initial purchase is made. Then, the relationship builds, and hopefully sustains, on emotional and rational/functional delivery of perceived value over time, comprising one or more components of the customer’s ‘trust equation’.

They memory of key elements of emotional value delivery will lead to downstream decision making. If any element of trust is received in a less-than-desired manner (including a non-authentic, deceptive, or otherwise negative experience), the relationship can be undermined, sometimes very quickly and sometimes with unattractive, long-term consequences for the vendor. This is especially true with basic, tangible, quality intensive product and service elements. Without trust and authenticity, companies can quickly find themselves back to square one with their customers, where everything they offer in quality and relationships – price, design, convenience, service, etc. – can easily be replicated by competitors.



Many companies endeavor to attract customers and to build trust through a rather passive, commoditized, rational and product-centric sales and marketing approach to value delivery. Such companies often believe that high accuracy, delivery timing and completeness, and other tangible, quality-centric components of value will earn both differentiation and customer loyalty. As a result, they don’t adequately determine the emotions involved with customer’s real priorities and set of expectations, what the customer wants to hear (positioning), how the customer wants to hear it (preferred communication channel), or how they are going to say it (messaging).

And, if the company fails to deliver expected tangible value, i.e. not doing what they say they will do and not meeting basic commitments and requirements, even using traditional one-way communication techniques, the relationship will inevitably fail. Over the years, we’ve seen many b2b and b2c situations where, despite high scores on quality elements of product and service when research is conducted, loyalty levels flatline or even fall.

TQM expert Noriaki Kano, reflecting on the prevailing views of business at the time he created the Kano Model (1980’s), defined his concept of building the perception of quality into measurement systems: “Total Quality Management is exercised under the philosophy that the best way for a corporation to expand sales and make a profit is to provide its customers with satisfaction through its products and services.” So, while there was some concern about the real relationship between quality initiatives and their effect on customer behavior, during this period almost no one was questioning the quality-satisfaction-business performance linkage.



In the past 20 to 30 years, we’ve learned a lot about the connection between quality and customer behavior. Today, we understand the correlation and causation between the tangible, functional aspects of value and customer actions. Tangible and functional quality helps create and sustain (or undermine) trust, but it is far less impactful than, for example, the emotion and memory behind interactions and experiences.

3 COMMENTS

  1. Well written and on the spot.
    I think tangible and intangible value are important. Intangible may be emotions or brand or association with a brand, as we found with farmers buying a commodity, fertilisers. Intangibles include non-price terms.

  2. Michael, I agree with your points. The work done by Charles H. Green (author of the book The Trusted Advisor) gives us a useful construct for the components of trust.

    I’ve also found the annual studies by the PR firm Edelman to be of great value in identifying the components of trust that could be monitored as part of voice-of-the-customer methodologies.

    Of course Colin Shaw is most well known for expanding our awareness of the importance of emotions despite the type of customer or product involved.

    I think it’s important that you cite foundational underpinnings of customer experience management dating back to Deming and Kano in the ’80s and yourself in the ’90s. You’ve pointed out accurately that marketers create expectations or a brand promise that is often the basis for customers’ trust or distrust. And that others in the company who create and deliver the products/services, send billing statements, train and reward employees, etc. all play a role in whether trust is earned, maintained, and grown — or not.

    This is why customer experience management is an essential context for all that the company does. Everyone must pull together in timely and accurate execution of their jobs to contribute to trust-building. If not, hassles emerge for customers and employees to navigate, causing costs, remedial efforts, and lost opportunities.

    Although the most visible components of customer experience management — frequent buyer programs, personalized digital and content marketing, social media and community engagement, Net Promoter tactics, self-service, CRM upselling and cross-selling, user experience design, customer success managers, references, first contact resolution and customer effort in customer care/support (largely remedial services) — are talked about most often, the truth remains that customer hassle prevention, ease-of-doing business, and alignment of the end-to-end customer experience journey with customers’ expectations (i.e. customers’ jobs-to-be-done and what’s promised by the brand) are absolutely essential to customer experience excellence. In fact, if the latter are executed excellently (right the first time) then investments in the most visible components of CXM can be reined in to achieve higher CX ROI.

    2 of my related articles may be of interest to readers:
    Trust & Choice: Essential Customer Experience Ingredients
    Customer Retention Begins With Trust

  3. Lynn –

    Thanks for your comments and providing added, valuable content. Charles Green is a colleague; and I know, and respect, his work in what drives and sustains consumer trust. I’m also familiar with the Edelman Trust Barometer, and have followed their research results for years..

    One of the most informed and real-world sources for understanding the power of trust is the PR firm Weber Shandwick, and my colleague Leslie Gaines-Ross, who is Chief Reputation Strategist. She and Weber Shandwick have done some pioneering research on customer advocacy and negative behavior, what they label as “badvocacy”:
    http://customerthink.com/corporate_reputation_and_advocacy_linkage/

    Michael Lowenstein

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