Customers frequently play key roles in the delivery of services. But if customers fail in those roles, their experiences may be unsatisfactory for them — and for the companies with which they do business.
Customers do not merely purchase services; they are also often actively involved in their design and delivery. In this respect they are co-producers, which means that they not only have an impact on the quality of their own experiences but also influence the satisfaction of other customers, and they can help or hinder the productivity of front-line employees and the company. Customers also frequently fail in their co-production role.1 Research indicates that about one-third of all service problems are caused by the customer.2 As companies increasingly shift work to customers and incorporate more self-service technologies, customers will take on even greater responsibility for service quality. As a result, their failures will become more critical.
Poor co-production by customers has financial implications. For example, the World Health Organization has identified the failure of patients to take prescribed medications correctly as a major global problem. In the United States, only 51% of patients follow their medication regimen for high blood pressure. Evidence shows that 96% of patients who adhere to their prescriptions have control over their blood pressure versus 18% of those who don’t adhere to their prescriptions.3 Similarly, The Merck Manual, a leading medical text, has identified 15 reasons why patients don’t take their medicine, ranging from misunderstood instructions and financial concerns to forgetfulness and apathy. These failures led to 23% of nursing-home admissions, 10% of hospital admissions and countless additional medical appointments, tests and procedures.4 Such customer failures add significant and unnecessary costs to the medical system.
We define a customer failure as any action by the customer that has a negative impact on that customer’s experience, the experience of other customers or the company’s productivity. Unfortunately, widely used performance measures and quality frameworks such as the Malcolm Baldrige National Quality Award, the Balanced Scorecard and the various versions of the International Organization for Standardization (ISO) are mostly silent on the contributions of customer co-production to company performance. Based on our research, we have developed a framework for preventing customer failure.
This framework evolved out of findings from two long-term research programs, one related to service failure and recovery and the second focusing on customer participation in services. (See “About the Research.”) For this component of the research, we conducted interviews with senior managers, front-line managers and customers on the subject of customer failures.