[Study] How Organizational Culture Can Create Customer Dissatisfaction

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For as long as I can remember, I’ve been taught in business to exceed customer expectations. Last year, I had the opportunity to read several books on customer service. Two of them come to mind. Raving Fans is a classic about treating customers so well that they actually become supporters of your company rather than simply buyers of your products. What’s Your Purple Goldfish? is a newer release about building brand loyalty through going the extra mile in serving customers. Both books, and a whole host of others on the market, stress the same point: exceeding customers’ expectations will make them more loyal.

Perhaps that is indeed the case as far as customer service goes, but what about product design? Should you exceed customer expectations when designing your product? Will they be happy if you do? Conventional wisdom, I think, says that they will. However, the article below suggests a wide range of past research that has indicated that customers aren’t always so thrilled about their expectations being exceeded. In fact, exceeding customer expectations in product design often leads customers to view the product as overly-complicated and difficult to use.

So, why do companies continue to make products that are too complicated for their customers? Why do companies “overshoot” on customer expectations and design products that have too many features to be user-friendly? If we can answer these questions, then maybe we can design products that are more closely aligned with what customers are expecting.

Article Summary: Why Do Customers Get More Than They Need?

Lukas, B. A., Whitwell, G. J., & Heide, J. B. (2013). Why Do Customers Get More Than They Need? How Organizational Culture Shapes Product Capability Decisions. Journal Of Marketing, 77(1), 1-12.

Bryan Lucas of the University of Melbourne, Gregory Whitwell of the University of New South Wales, and Jan Heide of the University of Wisconsin-Madison propose that customer dissatisfaction due to overly complicated product design is the result of organizational culture. It isn’t market research or consumer insights that drive companies to add more features than necessary. Rather, it is the nature of the companies’ internal values that determine the level of sophistication they introduce into their product designs.

Theoretical Framework

The authors use an existing theory of organizational culture called “competing values framework” (CVF) to set up their hypotheses about how organizational culture influences the sophistication in product design and the subsequent dissatisfaction among customers. In particular, the authors take two types of organizational values from the model to use in their study: the “adhocracy culture” and the “market culture.”

The adhocracy culture is one whose purpose is to always be on the technological cutting-edge in its product design. The market culture is one whose purpose is to usurp competitors and increase market share at all costs. The authors also take into account the company’s customer orientation, the degree to which a company puts its customers interests first. Given these three definitions, the authors come up with the following hypotheses about how organizational culture plays into “overshooting” on customer expectations:

  1. The stronger a company’s adhocracy culture, the more likely the company is to exceed customer expectations in product design.
  2. The stronger a company’s market culture, the more likely the company is to exceed customer expectations in product design.
  3. The stronger a company’s customer orientation, the lesser the effect an adhocracy culture will have on the company’s tendency to exceed customer expectations in product design.
  4. The stronger a company’s customer orientation, the lesser the effect a market culture will have on the company’s tendency to exceed customer expectations in product design.

The Survey

To assess the relationship between organizational culture and over-shot customer expectations, the authors conduct a survey involving suppliers of technology products in the IT industry as well as customers purchasing products from those suppliers. Suppliers were asked questions regarding their perceptions of the organizational cultures of their firms, and customers were asked questions regarding the product capabilities of the items they purchased from those suppliers. Out of an initial sample of 317 suppliers, the authors were ultimately able to retrieve completed telephone surveys from 100 suppliers and their corresponding customers.

The results of the survey confirmed all of the hypotheses except for the last one. There was found to be no relationship between a company’s level of customer orientation and the extent to which a company’s market culture increases the tendency for the company to exceed expectations in product design. In other words, a greater focus on customer needs does not affect how likely a more competitive culture is to lead to a company making overly complicated products.

The conclusions of the study can be restated in these terms:

  • Companies highly focused on cutting-edge technology tend to make products that are too complicated for customers to use.
  • Companies highly focused on competition and market share tend to make products that are too complicated for customers to use.
  • Companies who are more centered on customer needs are less likely to have a focus on cutting-edge technology lead to the production of overly complicated products.

Real-World Implications

On the surface, this study seems to come out of nowhere. The purpose of the study is a bit difficult to grasp. Especially with using language like “exceeding customer expectations,” you might think that the study is about how failing to exceed customer expectations can lead to dissatisfaction. In fact, the opposite is true. This study covers how exceeding customer expectations leads to dissatisfied customers and, more specifically, how organizational culture plays into that dissatisfaction.

What I find so intriguing about this study, though, is its implications for how companies perceive their levels of customer-orientation. I don’t think many companies would say that they aren’t focused on customers. Even those who are obsessed with innovation and/or competition will usually justify these values by claiming that focus on them is for the sake of the customer. “We are trying to come up with the latest, greatest technology in order to serve our customers,” or “we are trying to beat out the competition and gain market share in order to serve our customers.” It’s always about the customer, right?

I think this study is a wake-up call for companies who think they are customer-focused when they really aren’t. Customers don’t always want more features; they want features that are more in sync with their needs. Obsessing over technology is not going to make your customers happy. And, to an even greater extent, obsessing over competition is not going to make your customers happy. If you really want to make customers happy, you will cut to the chase and develop an organizational culture that is truly focused on its customers–not because you or other members of your team say you’re customer-focused, but because your customers say that you are.

Questions for Future Research

  1. To what extent does a company’s customer service affect how complicated the product is perceived to be by its customers?
  2. Do the results of the study hold for industries other than IT?
  3. How does the customer’s level of intelligence or education affect the extent to which he or she perceives a product to be overly complicated?
  4. Do customers prefer products to be overly simplified or overly complicated?

Featured image courtesy of Glutnix licensed via Creative Commons.

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About Douglas E Rice

Douglas E Rice is just a guy who likes to learn stuff.
This entry was posted in blog, Customer Service, Leadership, Studies. Bookmark the permalink.

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