Aug 18, 2022
How Quality Management and Service Excellence Are Essential for a Great Customer Experience
This week, we welcome Alec Dalton to the Digitally Irresistible podcast. Alec is co-founder and managing partner of the Hospitality Leadership Academy, a firm offering professional development programs and management consulting focused on service excellence.
Alec has operated five luxury properties and has held various corporate positions with hospitality industry pioneers like Marriott International, The Ritz-Carlton Hotel Company, and Walt Disney Parks & Resorts. He is a renowned keynote speaker on customer experience and quality strategy and a contributor to several internationally best-selling books on the topic. He also operates a consultancy that helps businesses—brand names and boutiques alike—design and deliver five-star services.
On this episode, Alec discusses the role of quality management in your customer experience strategy and how essential it is for achieving high levels of customer satisfaction.
A Career Journey That Began Where Dreams Come True
Alec’s career dreams date back to when he was eight years old on a family vacation at Disney World. While he and his family were at lunch talking about the special experiences they had that morning at the Magic Kingdom and sharing excitement about the upcoming fireworks that night, Alec noticed a custodial cast member (aka Disney employee) cleaning a nearby table. Seeing quality management in action, he realized that the magical experiences he and his family enjoyed were only possible because of people like the custodial cast member and all the other employees in various functions across the resort.
As he grew older, Alec was captivated by Disney’s focus on quality and he learned that other organizations did the same thing. He studied hospitality at Boston University, worked in a variety of hotels and resorts, and spent time in the quality management function in different corporate offices. Today he enjoys helping a variety of large and small organizations develop their own five-star services by training their teams, refining their executive and leadership development programs, and shaping custom frontline training programs. He provides this management consultancy focused on quality management, HR, and customer service both through his firm, the Hospitality Leadership Academy, as well as Accelerate Learning Systems, a partner company.
The 3 Components of Quality Management in CX
Alec believes that every organization should have a philosophy around quality. Quality, he says, centers on the interplay between customer experience, customer success, and customer service. He defines three primary components of quality management.
1. Conformance to Company Standards
One way to assess quality is based on conformance to the expectations a company has for the way work gets done and how outputs are produced. There should be consistency in your company’s quality standards.
2. Competitive Quality
Another way to assess quality is in the context of industry norms and the experiences customers have with your competitors. Consider what competitors are doing to meet customers' needs, where they are failing, and what expectations customers have of your brand based on their experiences with analogous businesses.
For example, in the hotel business, it’s common to check in with an employee at the reception desk for a few minutes before going up to your room. But in the airline industry, it’s possible to check in online or check in at a kiosk in the airport. Also, in most cases, it’s possible to select your seat on an airplane. Why can’t the hotel business take advantage of the same self-service mobile technology innovations to enable mobile check-ins and room selection in advance? The analogous expectations customers have of your industry compared to other industries influence their perception of competitive quality.
3. Customer Satisfaction
Finally, in Alec’s experience, customer satisfaction is the most important definition of quality. Customers bring their own unique wants, needs, and expectations. It’s your job to deliver the products and services that satisfy those needs or help them find a way to get there if you can’t.
How to Use Quality Management to Improve CX Design
Despite how essential quality management is in good CX, it is often overlooked. Yet there are ready-made frameworks CX professionals can use to design and improve experiences.
One of Alec’s favorites is the Six Sigma quality framework that guides CX professionals to reduce inconsistency and improve efficiency. The DMAIC process (Define, Measure, Analyze, Improve, and Control) outlines this strategy, which Alec writes about in “Customer Experience.”
First, customer experience professionals must define the experience they want to deliver. This includes both the actual experience and the outcomes—the memories or products you want the customer to leave with. Alec says it’s important to measure the key touchpoints along the customer journey that are important for driving customer satisfaction.
Second, measure the business operating metrics so that you can address compliance quality and competitive quality throughout the customer journey.
Third, track the key metrics over time to reduce risk and make sure you’re actually satisfying your customers. Ensure your standards meet the needs of your customers and are at least equal to your competitors’ standards.
Next, look for opportunities where you can take things to the next level and improve on your current experience.
Finally, develop a quality control plan so you can sustain a new level of quality or improve it and delight your customers even more in the long term.
Perceived Challenges of These Frameworks
Originally developed in the manufacturing world with clear metrics for consistency, the data-intensive focus of the Six Sigma and Lean Manufacturing philosophies can lead some brands to hesitate with them, especially for those in industries that rely on measuring customer or employee emotion.
The DMAIC process, however, is fairly common for brands in the hotel, hospitality, and entertainment industries. Using voice of the customer channels like surveys and social media feedback, hospitality, and B2C companies can mine those sources for data. And there’s increasing potential for more data in the future as video recognition and artificial intelligence technologies continue to advance.
The Cost of Poor Quality Management
In “Customer Experience 2,” the second customer experience book Alec coauthored, he writes about the cost of quality in the customer experience. He explains how there is a cost to deliver quality, but the cost of poor quality is even greater.
The cost of poor quality can include negative word-of-mouth, opportunity costs, loyalty loss, negative sentiment, waste, and the cost of reworking processes to eliminate quality concerns. It’s important for brands to consider what happens when things go wrong and how you can prevent it from happening in the first place.
For example, say you check into a hotel and the front desk provides friendly service and your guest room is lovely. But after you go to sleep, another guest suddenly walks in and you realize you were both checked into the same room. Oops!
In this scenario, two customers are understandably upset about the experience, which may result in negative word-of-mouth, rebates, refunds, or other accommodations to ensure customer satisfaction. Poor quality by design—the breakdown in process that caused this problem—resulted in all of these costs.
The cost of quality management can be categorized into two groups: conformance and non-conformance.
Conformance is the cost of designing and implementing effective quality management. There are two types of conformance costs: appraisal costs and prevention costs.
Appraisal costs include things like inspecting parts or supplies before production begins or before a service is provided. Implementing quality assurance programs, performing inspections and the like are all part of the appraisal costs. This costs money, time, and effort, but it can prevent faulty parts or experiences from advancing through your supply chain and production process.
Prevention costs are similar but from an in-built design standpoint. Prevention costs often go by the Japanese term poka-yoke which means foolproofing. These are the measures you put in place to prevent accidents from happening. In a digital world, they might include preventing an employee or customer from skipping a step in a transactional process through a pop-up message. There are costs associated with designing, building, and implementing these, but these costs are often much lower than the costs of non-conformance.
Companies incur non-conformance costs when things go wrong, often due to poor quality or ineffective quality management. These include external opportunity costs—the cost of an upset customer, angry guest, or negative word of mouth. But they also include internal costs when things go wrong and you need to rework processes, reduce waste, or address low employee morale.
Balancing Quality and Cost
To reach a healthy balance between quality with cost, it’s important to remember that the ideal level of quality, at least from a financial standpoint, isn’t perfect quality. Perfection is astronomically expensive and often unattainable, especially in services businesses because we’re all human and accidents happen. In contrast, the goal is to balance the cost of preventing and assuring quality to help reduce the cost of any potential failures and ensure a great customer experience with high levels of customer satisfaction.
What Alec Does for Fun
Being in the hospitality business, Alec loves to travel. Last year he visited all 50 states in the USA! He’s still deciding on this year’s adventure, but he has his eyes set abroad.
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