Product quality has long been recognised as a key factor in driving business performance and achieving competitive advantage, but what we mean by quality can be subjective and hard to define. For example, while an engineer might judge quality according to whether a car conforms to certain design standards and specifications, a customer might perceive quality according to whether the door closes with the right kind of click, and yet another might judge quality according to the size of the engine.
Customers’ perceptions count. Their experience of product quality – their judgement of the overall excellence or superiority of a particular product relative to alternatives – influences their future purchasing behaviour, their willingness to pay as well as the degree to which they would recommend a product to another potential purchaser. Customer experience of quality is different from customer satisfaction; it is more complex than simply giving a four-star rating on an online shopping portal. Digging deeper into customer behaviour, we find that customers experience product quality in a multi-dimensional way. It involves consideration of a product’s performance and primary operating characteristics, as well as other characteristics that ‘supplement’ the base product – for example, additional features, its durability or its aesthetics.
It is therefore vitally important for manufacturers of durable goods to know how different dimensions of product quality are experienced by their customers. While there are recognised research instruments such as SERVQUAL and SERVPERF, which measure customer service quality, metrics for assessing exactly how customers experience product quality have been lacking.
New research to develop such a metric is therefore timely. Professor Marcel Paulssen and Dr Ramesh Roshan Das Guru, from the Geneva School of Economics and Management at the University of Geneva in Switzerland, have developed a multi-dimensional scale called the ‘Customer Experienced Product Quality’ (CEPQ) scale, which identifies and measures how customers experience and respond to the quality of products. They have tested the validity and reliability of the CEPQ metric across diverse product categories.
Professor Paulssen and Dr Das Guru began with exploratory research into the factors that influence customers’ quality experience for durable products. Online surveys with customers were carried out in both India and the United States in four product categories, which covered: cars, smartphones, headphones and running shoes.
The most significant product quality dimension across all products was performance.
A preliminary literature review had led the researchers to expect seven quality dimensions. These dimensions were: performance, features, reliability, durability, ease of use, aesthetics and serviceability. These were confirmed in the exploratory research across categories. In addition, the surveys identified the importance of an eighth factor: the quality of materials used in the product’s manufacture. The eight identified dimensions of quality were validated in a pre-test in two product categories with US customers.
The main study covered four product categories – cars, dishwashers, headphones, and tablet computers – and was completed by 2500 respondents from the United States. Respondents must have owned and used the respective product regularly (at least once a week) for a minimum of 6 months and were asked about their product experience on the eight identified dimensions of product quality.
Analysis of data
Analysis of the data from the main study produced significant insights. First, the eight identified product quality dimensions could be validated in all four product categories of the main study.
Second, previous research considered product quality as a mere antecedent of or input to customer satisfaction, which in turn is supposed to drive relationship outcomes such as willingness to pay premium (WTPP) or repurchase intention (RI). In contrast, the study results clearly support that CEPQ has a strong, direct effect on both WTPP and RI over and above customer satisfaction. Customer satisfaction only partially mediates the effect of CEPQ on relationship outcomes. Especially for WTPP, the direct effect of CEPQ accounts for around 50% of the total effect across categories. For RI, the relative impact of the direct CEPQ effect is comparatively weaker but still accounts for about 40% of the total effect. It is particularly noteworthy that the total effect of CEPQ is stronger than the total effect of satisfaction for both RI and WTPP across all product categories.
Moderators for the relevance of CEPQ were also identified. The degree to which a consumer focuses on buying high-quality products, their ‘quality consciousness’, as well as their level of expertise moderated the impact of CEPQ on outcomes (RI and WTPP). For high-quality conscious customers and experts, the direct effects of CEPQ on RI and WTPP are stronger than the effects of satisfaction in seven out of eight cases. In all four product categories, the direct effect of satisfaction on WTPP is not significant for high-quality conscious customers. Thus, for some substantial and relevant customer groups, i.e. experts and quality-conscious customers, satisfaction is simply not the most relevant metric, but instead CEPQ is.
It is vitally important for manufacturers of durable goods to know how different dimensions of product quality are experienced by their customers.
A new metric
Importantly, the multi-dimensional product quality scale with its eight quality dimensions developed by Professor Paulssen and Dr Das Guru has by now been validated across a diverse set of product categories ranging from lawn mowers to televisions.
Dr Paulssen and Dr Das Guru have found that their CEPQ metric is more sophisticated in its insights when compared to alternative quality metrics, such as those used by online shopping platforms. By drilling down and revealing how the quality dimensions relate to each other, the CEPQ metric provides a more comprehensive and diagnostic insight into how product quality is experienced in a category.
The most significant product quality dimension across all products was performance. However, for all other dimensions, results differed depending on the product. For tablet computers, the additional dimensions were serviceability, ease of use, and features; for dishwashers they were material, features, and durability. This makes a lot of sense – what is important for one product will not necessarily be important for another. And herein lies the beauty of CEPQ: it allows companies to understand what aspects of quality are most important to their specific customers.
CEPQ is a new product quality metric for manufacturers, which aggregates customer evaluation of a product’s performance across eight quality dimensions into an overall quality judgement. Based on actual experience, the CEPQ metric helps companies understand how customers define product quality in specific product categories.
Professor Paulssen and Dr Das Guru’s research shows that CEPQ is a better predictor of customer behaviour than other established metrics such as customer satisfaction. In addition, they suggest that measuring and tracking CEPQ on a regular basis can help companies “to decode exactly how their customers experience product quality and can pinpoint strengths and weaknesses of a company’s product portfolio on a quality dimension level”. The insights generated can help to both improve production processes and inform new product development. It can also enable operations managers and product managers to focus on critical product quality dimensions and thus allocate resources more effectively for improving the quality of their products.
In addition, the CEPQ metric can be applied to different market segments within a product category, for example to help companies develop products or target messages at specific market segments. Professor Paulssen and Dr Das Guru explain: “This segment-specific, dimensional significance is crucial for product managers when targeting and positioning existing and new products by allowing them to prioritise which product aspects to focus on in research development for new products.”
A key measure for business
While customer satisfaction has traditionally been regarded by companies as the most significant customer metric, this alone is not a sufficient predictor of future purchase behaviour. Rather than being regarded as an antecedent to customer satisfaction, Professor Paulssen and Dr Das Guru’s study shows that Customer Experienced Product Quality (CEPQ) drives key customer behaviours such as repurchase and willingness to pay. It follows that the CEPQ metric they have developed should become both a key measure of business performance and a subject for further research.
What was the most surprising insight into customer experienced product quality gained from your research?