Home
 
 What's New?
 
 This Site
 
 Organizational Basics
 
 About
 
 Systems Thoughts
 
 Business Applications
 
 Working Papers
 
 Social Issues
 
 Systems Links
 
 Consulting Links
 
 ST Class
 
 Politics
 Libertarian Objections
 Liberal Moments(SM)
 Political & Economic Links
 
 Health
 
 Music
 
 Pics


Get our Bulletin

Home > Business Applications
Service Quality Erosion
by Bob Powell, 11/28/07
Printer-friendly page Printer page
Email Page Email article

Service quality is important because the market value of companies depends on customer satisfaction. One point on the UofM Business School 100-point American Consumer Satisfaction Index (ACSI) scale translates to 3% of company market value.

And this isn't just because of concern about losing customers. Examples: Bank loan officers who less time with customers sell fewer ancillary services. Insurance claims agents who take less time per claim give excessive payouts.

Based on work at MIT, this paper describes the structure that can drive entire industries into a vicious cycle of declining service quality.

Service Quality Erosion
Service Quality Erosion data

See also The Insurance Crisis that describes how rising settlement costs for insurance companies are largely caused by systematic, long-term underinvestment in claims adjusting capacity. Whereas it's easier to blame lawyers and frivolous lawsuits, this explains how an insurance company's own policies led to increased payouts and lawsuits.


URL: http://www.exponentialimprovement.com/cms/servqualeros.shtml

Top of Page Top of Page Email this Article Email Article Printer

© 2003 Continuous Improvement Associates
Articles
Workshop Overview
Facilitating Group Action
Exponential Improvement
Create Strategic Focus
Making Strategic Choices
Project Management Dynamics
Workshop Report on Project Management Dynamics 10/23/04
ST Leadership
Human Resource Structures
Product Life Cycle