Realtime Strategies for Customer Satisfaction

Regis McKenna R&D/J.D. POWER

Factors for network satisfaction

In the two previous months, this column has discussed some of the structural and organizational barriers that are impacting the adoption of PC networks in the Japanese marketplace. This month, the focus is on how to measure the all-important factor of customer satisfaction.

One of the over-arching findings from the JD Power/Regis McKenna PC-Network Users Satisfaction survey -- a factor universally indicated regardless of company size, location, or industry of the respondent -- is the ongoing dominance of MIS (Management Information Systems department) as the primary decisionmaker and gatekeeper for selecting and implementing corporate PC systems in Japan. MIS is consistently the first department to install PC systems and networking software. In many instances, despite heavy demand from other departments for system installation, limited MIS "testing" of early installs can continue for several years before PC systems are finally allowed to spread to the rest of the organization.

The barriers to system implementation

With MIS thus serving as an internal barrier between PC systems vendors and a corporation's users, it is especially important for companies to develop channels of direct contact with the end users representing the greatest current demand. Because of a lack of familiarity with the potential benefits that can be realized using PC networks, databases, and even basic information and communication sharing, corporate end users often don't even know what questions they should be asking their MIS department.

Nearly half (47%) of the companies responding to our survey admitted that they receive regular requests from departmental end users to implement PC network systems. And the functional department with the highest level of current demand, in every industry sector, is sales. Yet less than 25% of the companies surveyed have installed PC systems in their sales departments -- and a majority of those had done so only during the previous year. The popularity of the Sharp Zaurus and other PDAs (personal digital assistants), particularly for mobile workers such as salespeople, is clearly a symptom of this unfulfilled need for personal productivity tools.

When respondents were asked to identify the major obstacles to implementing PC network systems, the top responses pointed primarily to human resource issues: a shortage of staff or lack of knowledge. (See the accompanying graph.) This suggests a couple of things for companies hoping to accelerate the pace of PC network systems adoption in Japan.

First of all, there is a huge need for much more comprehensive training at all levels within companies that are implementing new systems. Second, regardless of how post-sales support is being provided (directly from the vendor, or through a dealer or third-party customer service organization), there must be support for even the most basic of end-user problems. These findings are borne out by the results of the satisfaction portion of the survey.

Service-product hybridization

Corporate plans that limit PC and network diffusion; MIS departments that monopolize control of initial systems; an overall shortage of knowledgeable and well-trained personnel. How do these factors impact satisfaction levels with corporate PC networks? As it turns out, it depends on how satisfaction is measured: from a product standpoint, or based on overall end-user experience.

One of the challenges faced by the PC industry, in Japan and globally, is that the line between products and services has all but disappeared. Where once marketers could leverage advantages and compete on both the tangible and intangible aspects of a PC system, we now see a hybridization: the "servicization" of products, and the "productization" of services.

When General Motors makes a greater profit from lending its customers money to buy its cars than it makes from selling the cars themselves, is GM marketing its products or its services? When IBM announces to all the world that it is now in the systems-integration business -- that the customer can buy any box from any vendor, and IBM will supply the systems know-how to make the whole thing work -- is it marketing its products or its services? In fact, the computer business today is over 75% services; it consists overwhelmingly of applications knowledge, systems analysis and integration, networking solutions, security, and maintenance.

Nowhere is the product-service hybridization more evident than in the Japanese marketplace. Service-based relationships were invented here, and they continue to provide a market for even the most anachronistic and improbable business solutions.

Measuring user satisfaction

Our measure of overall satisfaction is driven by customer evaluations of PC systems products and expected services -- evaluations that, in general, can be grouped into related variables or factors. These groups or factors were derived from the survey responses using a factor analysis technique, and the impact of each factor on overall satisfaction was then determined through regression analysis. The results were translated into an index that compares the relative ranking of the variables against a 100-point average.

Our survey measured satisfaction in both general product-service performance and user expectations. It also measured satisfaction with specific named vendors, products, and service providers. Regarding product-specific performance, three major factors that have the greatest impact on end-user satisfaction were identified, as shown in the pie chart.

Within each of these three factors, there were several specific attributes to which respondents were asked to assign a weighted value. The total thus allowed us to derive the factor percentage. By using this weighting as an index, we are able to compare 12 different PC and server manufacturers, 8 operating systems, and 5 network operating systems. Our results compare satisfaction rankings within each product category as well as in all possible combinations of server, PC platform, OS, and NOS (network operating system).

Additionally, we measured several service-related or intangible attributes to compare the relative importance of these factors in determining overall customer satisfaction. We'll examine these in more detail next month, and discuss the significance that these findings have for companies doing business in Japan.

Computing Japan readers are invited to send questions or requests for information about the survey, via e-mail, phone, or fax, to either:

R&D/JDPower
Brian Heywood
rjp@aol.com

phone +81-3-5695-0121
fax +81-3-5695-0126

Regis McKenna, Inc.
phone +81-3-5420-0679
fax +81-3-5420-1679

Next month: Customer satisfaction factors and their significance.