Realtime Strategies for Customer Satisfaction

Last month's column made the case that the choice of dealer can dramatically impact a customer's overall perception of and satisfaction with a manufacturer. In Japan, however, manufacturers are not always in control of who sells and services their products. This poses a dilemma in terms of how manufacturers can address customer needs.

In this modern "age of information," a lack of information in the IT industry is deadly. So, starting with the need to understand consumer mind set, this month we ask the question: What factors influence companies to choose specific dealers to help them set up or expand their networks?

How often do businesses actually go outside the company for help in setting up their network? Of the nearly 50% of respondents in the JD Power/Regis McKenna PC-Network Users Satisfaction Survey who said their company had implemented some stage of networking, 58% said that they were using, or had used, an outside dealer to help them through the process. By observing the portion of the market that has already started the networking process, manufacturers and software and service providers can gauge the types of trends that are likely to emerge as the remaining 50% of the market moves toward building a network.

When a company goes to an outside dealer for help with its networking process, what are the major criteria for selection? As those who have worked in Japan for any length of time would suspect, nearly 20% of survey respondents said that the number one reason they selected a specific dealer was because they had a prior relationship with that dealer. Other reasons that ranked high for choosing a dealer were an accurate understanding of the company's needs (9%), good ideas and plans (9%), and solid technical support (8%) for getting the network up and running efficiently. An overall evaluation of the top reasons given for choosing a dealer suggests that the four important elements are trust/familiarity, customer handling (or hand-holding), innovation/know-how, and support.

When the extent of network completion is considered, companies just beginning their networking process rate prior experience with the dealer as an important factor. Beginners also seek a certain amount of hand-holding, and want to feel confident that the dealer accurately understands their needs. Customers at least halfway through their networking process also value a prior relationship with the dealer, but having gone through a part of the process, they rate the dealer's suggestions for system installation higher than an assurance that their own ideas are understood.

Companies nearing the end of their networking effort still evaluate prior business relationships highly, and they value a dealer that can provide solid maintenance support.

Another way to approach the question of why specific dealers are chosen is to look at why users select a particular channel (type of dealership). Companies that choose either a direct sales route from the manufacturer or an office equipment specialist seem to place a similar focus on prior relationship and on the perception of solid technical support capability. Office automation dealers also receive a high rating for their ability to handle a wide range of products. Customers of manufacturer-owned dealerships also rate prior relationship as an important factor. Manufacturer dealerships are perceived as better understanding customer needs and, probably as a result, are credited with having good ideas and plans.

The selection of software houses is much less relationship based. Customers tend to choose a software house as their network installer or partner either because they expect good ideas and strong software development capabilities, or because their own client has asked them to use a particular software dealer.

Independent dealers, more than any other channels, are selected because of their innovative ideas and plans. They are also perceived as having a strong track record when it comes to implementing networks. If history is any indication, it will be these independent dealers who, because they are fighting to remain competitive, will have their ear closest to the needs of the customer.

Innovation, and listening to the customer, will be key to success in networking. Because Japan still has a low ratio of networked companies, the first obvious need is going to be a lot of up-front hand-holding. Companies that can demonstrate creative solutions will begin to challenge traditional manufacturer oriented relationships. As independent dealers become more aggressive with offering creative solutions to customer problems (such as mixing and matching the best software and hardware available), the dominance of the traditional manufacturer-related dealers will begin to wane. And it is not difficult to imagine that, when this occurs, these independent dealers will influence not only how companies in Japan install their systems, but also what software and hardware they use.

Things will happen extraordinarily fast, and will severely tax the current resources available in Japan. As mentioned, only about 50% of companies surveyed have started the network installation process. Of those that have not yet started, half are targeting a 3- to 5-year schedule for network implementation. They expect to have company-wide networks up and running by 2000, which means that the curve and the race are likely to move even faster. (Buy-in by upper management is a crucial factor, however. This group collectively must understand the importance of solid networks to their company's success.)

An important challenge for the fast-growing networking industry is going to be maintenance support. One of the most dreaded announcements in any office is, "The network is down." As the industry matures, and networks become commonplace in the workforce, the need for strong maintenance will increase dramatically. Manufacturers and service providers who want to be strong in this market in 2000 as well as in 1997 will need to plan now for providing current and future customers, as well as dealers, with the technical support tools to handle the coming customer needs.

These changes will not come without some pain. Companies faced with the task of bringing their corporate network up to speed will inevitably face physical, fiscal, and mind set barriers that prevent them from moving as fast as they would like. Next month, we will explore some of these barriers in more detail.