Synopsis of Austrade Case Study
This case traces the events of Australia’s Trade Commission post (Austrade) in Bangkok, Thailand from a post that had the worst customer service record in the SE Asian region to becoming among the top five posts in the world, all in the space of a few years.
It touches on issues relating to the importance of physical evidence, teamwork, credence properties for professional services and clients’ assessment of quality in a professional service organization. The case documents the change management program that turned this once disastrous situation around.
Questions for Discussion
Discuss the reasons why the tangible evidence and service encounters are so critical for Austrade, Bangkok.
Austrade is a professional management consultancy. Thus, it is typically high in credence properties (refer Chapter 1 on text)- i.e., many clients (especially inexperienced ones) will have difficulty confidently evaluating the true worth of a complex assignment. e.g., a market entry strategy or a feasibility study on a industry in Thailand.
Hence in making quality evaluations clients will look for tangible evidence of the (apparent) professionalism of the organization. Hence the appearance of the reception area, the meeting rooms, the reports that a client receives take on added importance.
Also, for first time clients who have not used Austrade before, first impressions are crucial – again they must exude professionalism, as prospective clients cannot try their services out in advance of purchase.
What lessons can other international marketers of services learn from this remarkable turnaround?
Lessons for International Marketers of Services
Continuous Client Satisfaction Tracking
First, the significance of continuous client satisfaction tracking is highlighted. It was the poor CSIS survey results, which focused the spotlight on the problem and brought home the hard reality to staff i.e., despite what they thought, clients perceived their service as poor in the extreme.
In other words, service quality is truly in the eyes of the client. The CSIS also pinpointed exactly where the key weaknesses were needed. Today it tracks improvements and is an indispensable source of feedback.
Understanding of Client Expectations
Second, the research results have meant that staff now have a better understanding of client expectations and are thus in a better position to exceed them. Realizing that they are an Australian office Thailand (and not a Thai office) and that their primary clients are Australian whom in many respects have different expectations to Thais also helped.
Highlighting Pivotal Role of Leadership
Next, the pivotal role of leadership is highlighted. Abrahams took decisive action once the poor survey results came in. Rather than take a slowly, slowly kid gloves approach, he was decisive, and more importantly, led from the front, and continues to do so. He made it clear that poor client service would not be tolerated.
During this time, he did however consult all staff at each step of the way. He also convinced staff that the new environment in which they were operating was one of continuous change and the old ways of doing business would be good enough to deal with the new competitive imperatives.
Training and Re-education
Training and re-education were also critical. It was not an easy time for many staff as Austrade, over a period of several years migrated from a bureaucratic public sector organization to the quasi private sector management consultancy it is today.
In the former times client satisfaction was almost secondary to internal considerations. Hence considerable training was required to get rid of old habits and instill a true client orientation. And a competitive spirit necessary to achieve both the productivity levels and client satisfaction required under the new environment of the late 1990’s.
Regular training sessions by an external moderator over a period of two years have facilitated changed attitudes, behaviors and work practices. The introduction of some ‘new blood’ also went a long way to achieving the change.
New Work Practices
In addition to changed behaviors and attitudes, new work practices were fundamental to supporting the new way of doing business. Theses new practices allow information;
- to be shared
- priorities given to urgent
- short term tasks as well as the longer-term strategic tasks
- supported by a revamped IT system which provided instant access to much of the day to day information required by clients.
Importance of Tangibles
The importance of the tangibles (revamped office environment) was a fundamental factor in the overall turnaround.
In professional services high in credence properties the tangible evidence sends a powerful quality signal to clients. (i.e., the client has difficulty evaluating the quality of what they are likely to receive prior to purchase – and sometimes even after purchase)
But especially new clients who are often being asked to buy promises when they engage Austrade on an assignment – promises that Austrade will deliver the benefits and value that are engaged to deliver. Today Austrade Bangkok exudes the image a professional consultancy – and thus sending the right signals to both clients and staff.