Making customers happy, some experts say, is the fine art of balancing experience and expectation. Based on that, the feeling of Microsoft Corp. customers is starting to edge ever so slightly towards the disappointment end of the spectrum, according to results of an annual survey by the University of Michigan released on Tuesday.
Microsoft scored 70 out of 100 on the latest Q1 results of the American Customer Satisfaction Index put out by Michigan's Ross School of Business. That is down from 74 at the same time in 2006, the first year Microsoft was ranked.
"Very small differences count for a lot," said Claes Fornell, a University of Michigan professor and director of the ACSI.
The overall customer satisfaction rating with companies in the ACSI, which surveyed 80,000 people nationwide via the Web during the first three months of the year, according to Fornell, was 73. The approval rating for all software vendors, including Microsoft, was 75.
Microsoft still ranked higher than many big, successful companies such as McDonald's, Cingular Wireless, and hotel operator Ramada. It also ranked higher than Comcast and most other cable and satellite TV providers, and virtually all of the airlines surveyed by the ACSI.
At the same time, Microsoft ranked below most delivery firms such as FedEx, hotels, full and fast-service restaurants, even most energy utilities such as Southern Company and Sempra Energy.
Too big to be loved?
Fornell theorizes that the launch of Windows Vista and Office 2007 during the period in which the survey was conducted may have played a part in dragging down Microsoft's score. That's not actually because a majority of respondents had tried either software and found it lacking, he said. Rather, Microsoft's need to hype the two products through marketing and advertising may have created a backlash among some jaded consumers, he said.
Fornell also says that customers have higher expectations for market-leading companies such as Microsoft.
"Microsoft is such a dominant company that economic theory predicts that their customer satisfaction would not be all that high, anyway," he said. "For them to come in at 70 is not all that bad."
In the past decade, McDonald's has consistently scored significantly lower than Microsoft's "low" score this year, even while doubling its revenues over that period.
"If Microsoft really put resources into it, they probably could do better. And maybe for the long-term, they should," he said.
Microsoft: Our survey said...
That is exactly what Microsoft says it has been doing for the past four years, since creating a unit within the company dedicated to boosting customer satisfaction.
According to its surveys, that strategy has borne fruit, says the company.
"We have plenty of room to improve, but overall satisfaction is at their highest levels ever," said Toby Richards, general manager for worldwide customer experience at Microsoft in an interview Monday.
Richards declined to release the results of its twice-yearly surveys, which are performed by independent firms and quiz 55,000 people worldwide online and over the telephone, including 15,000 in the United States.
But he said the surveys show satisfaction steadily rising in the past four years since Richards' team, the Customer and Partner Experience (CPE) group, was created.
"We feel good about the progress we've made in the past four years," said Richards. "And in the long-term, we've created a culture within Microsoft that is more customer and partner-centric."
For instance, Richards says that Microsoft's decision to repeatedly delay the release of Windows Vista in order to tighten up its security and features was heavily influenced by survey results that showed customers asking for greater "product stability and reliability," Richards said.
Microsoft's decisions to offer its own security software such as Windows Defender, simplify its licensing terms for enterprise software, and introduce a heavily re-engineered interface called the Ribbon for Office 2007 were also influenced by survey results, according to Christopher Frank, senior director for corporate market research at Microsoft. He declined to specify what kinds of customers or partners -- from CIOs to consumers to developers -- were most or least satisfied with Microsoft, other than to say that "the broader audiences" such as information workers and consumers "have higher expectations, because they have to try figure out how to navigate Microsoft" for help if problems arise.
Are Steve Ballmer's babies ugly?
According to an article in Computerworld from March 1999, Microsoft created its first customer service organization -- the predecessor to today's CPE -- that year as a result of then-president Steve Ballmer's "tireless -- and reportedly heavy-handed -- efforts to change Microsoft's long-held reputation as a company that cares much more about shipping out boxes of software than taking care of its customers."
"It's a very personal mission for Ballmer to get quality where it belongs," an analyst told Computerworld at the time.
Microsoft's challenge, according to Jeanne Bliss, general manager of worldwide customer and partner loyalty at Microsoft from 1999 to 2001, was that it, like most IT companies, was a classic "product power core" firm: good at delivering products but bad at getting feedback to improve the customer experience.
For instance, Microsoft expanded its customer surveying after Bliss arrived. But getting executives pay attention and use the results to improve their processes was more difficult.
"We did those classic customer satisfaction surveys -- I won't even tell you how much money we spent on them -- and then they would land like a brick on peoples' desks," she said.
Bliss, who now consults large corporations on customer satisfaction, said that that wasn't because Microsoft, after years of hearing its software criticized for their reliability or insecurity, had developed a thick skin. On the contrary, it cared deeply.
"If people don't like your software, it's like them calling your baby ugly," Bliss said.
In 2003, Microsoft changed its customer service strategy again. It created the CPE to be a small, independent umbrella organization that unifies all the product groups under a single strategy while reporting to the highest levels of Microsoft.
The CPE is headed up by Kathleen Hogan, corporate vice-president of worldwide customer service, support and customer and partner experience, and Jon DeVaan, senior vice-president of the Windows core pperating system division.
Richards meets directly with COO Kevin Turner and Jeff Raikes, president of Microsoft's business division, once a quarter. He also meets directly with CEO Ballmer once a year.
That ensures that the CPE not only gets a seat at the executive table, but insulates it from lower-level executives looking to meddle in surveys to guarantee glowing results for their products, said Richards. The top 800 executives at Microsoft are held accountable for customer and partner satisfaction, with results "affecting a fairly big part of their bonus," he said.
Better than you think?
What areas related to customer satisfaction is Microsoft most interested in continuing to improve? According to Richards, they include broader questions such as product quality and security as well as specific issues such as how Microsoft reacts to problems like this year's change in the start date for Daylight Savings Time.
Liz Roche, a former META Group analyst who now consults firms on CRM software and other customer service related issues, says that Microsoft already does a better job than outsiders give them credit for.
"With Windows Vista, people are buying new HP PCs and calling HP for Vista support," she said. "The customer doesn't really care which service center he or she is calling -- to them, it's just a problem with Windows."
But Fornell says that customers already give high-tech firms such as Microsoft a break because of the nature of the industry and of the products.
"If cars were only as reliable as PCs, our roads would be pretty messy," he said.