Focusing on Customers. Key Idea To create satisfied customers, the organization needs to identify...
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Transcript of Focusing on Customers. Key Idea To create satisfied customers, the organization needs to identify...
Key Idea
To create satisfied customers, the organization needs to identify customers’ needs, design the production and service systems to meet those needs, and measure the results as the basis for improvement.
Importance of Customer Satisfaction and Loyalty
“Satisfaction is an attitude; loyalty is a behavior”
Loyal customers spend more, are willing to pay higher prices, refer new clients, and are less costly to do business with.
It costs five times more to find a new customer than to keep an existing one happy.
Key Idea
Customer wants and needs drive competitive advantage, and statistics show that growth in market share is strongly correlated with customer satisfaction.
American Customer Satisfaction Index
Measures customer satisfaction at national level (1994 by University of Michigan and American Society for Quality)
Continual decline in index from 1994 through 1998 with a small improvement into 2000.
European Customer Satisfaction Index (April 2000)
ACSI Model of Customer Satisfaction
Perceivedquality
Customer
expectations
Perceived
value Customer
satisfaction
Customer
complaints
Customer
loyalty
Customer-Driven Quality Cycle
Customer needs and expectations (expected quality)
Identification of customer needsTranslation into product/service specifications (design quality)Output (actual quality)Customer perceptions (perceived quality)
PERCEIVED QUALITY = ACTUAL - EXPECTED
Leading Practices (1 of 2)
Define and segment key customer groups and markets
Understand the voice of the customer (VOC)
Understand linkages between VOC and design, production, and delivery
Leading Practices (2 of 2)
Build relationships through commitments, provide accessibility to people and information, set service standards, and follow-up on transactions
Effective complaint management processes
Measure customer satisfaction for improvement
Key Customer Groups
Organization level consumers external customers employees society
Process level internal customer units or groups
Performer level individual internal customers
Identifying Internal Customers
What products or services are produced?
Who uses these products and services?
Who do employees call, write to, or answer questions for?
Who supplies inputs to the process?
AT&T Customer-Supplier Model
Requirementsand feedback
Requirementsand feedback
Your Suppliers
YourProcesses
YourCustomers
Inputs Outputs
Key Idea
The natural customer-supplier linkages among individuals, departments, and functions build up the “chain of customers” throughout an organization that connect every individual and function to the external customers and consumers, thus characterizing the organization’s value chain.
Key Idea
Segmentation allows a company to prioritize customer groups, for instance by considering for each group the benefits of satisfying their requirements and the consequences of failing to satisfy their requirements.
Key Dimensions of Quality Performance – primary operating
characteristics Features – “bells and whistles” Reliability – probability of operating for
specific time and conditions of use Conformance – degree to which
characteristics match standards Durability - amount of use before
deterioration or replacement Serviceability – speed, courtesy, and
competence of repair Aesthetics – look, feel, sound, taste, smell
Key Dimensions of Service Quality
Reliability – ability to provide what was promised
Assurance – knowledge and courtesy of employees and ability to convey trust
Tangibles – physical facilities and appearance of personnel
Empathy – degree of caring and individual attention
Responsiveness – willingness to help customers and provide prompt service
Kano Model of Customer Needs
Dissatisfiers: requirements that are expected in a product or a service. In an automobile, a radio, heater, required safety features are examples, which are generally not stated by customer but assumed as given.
Satisfiers: expressed requirements. Customers say they want. Many car buyers want a sunroof...
Exciters/delighters: unexpected features.new or innovative features that customers do not expert.
Customer Listening Posts
Comment cards and formal surveys
Focus groups Direct customer contact Field intelligence Complaint analysis Internet monitoring
Moments of Truth(Jan Carlzon, SAS)
Every instance in which a customer comes in contact with an employee of the company.
Example (airline) Making a reservation Purchasing tickets Checking baggage Boarding a flight Ordering a beverage Requests a magazine Deplanes Picks up baggage
Key Idea
An organization builds customer loyalty by developing trust, communicating with customers, and effectively managing the interactions and relationships with customers through approaches and its people. Companies must carefully select customer contact employees, train them well, and empower them to meet and exceed customer expectations.
Customer Relationship Management
Accessibility and commitments Selecting and developing customer
contact employees Relevant customer contact
requirements Effective complaint management Strategic partnerships and alliances
Measuring Customer Satisfaction
Discover customer perceptions of business effectiveness
Compare company’s performance relative to competitors
Identify areas for improvement Track trends to determine if
changes result in improvements
Survey Design
Identify purpose Determine who should conduct the
survey Select the appropriate survey
instrument Design questions and response
scales
Key Idea
The types of questions to ask in a survey must be properly worded to achieve actionable results. By actionable, we mean that responses are tied directly to key business processes, so that what needs to be improved is clear; and information can be translated into cost/revenue implications to support the setting of improvement priorities.
Example: The Olive Garden
The Lobby Was the lobby staff friendly and did they welcome you to
the restaurant? Were you seated in a timely, efficient manner?
The Table Area Was your table area clean when you were seated?
The Server Was your server attentive and there when you needed
him/her? Was your server knowledgeable and able to answer your
questions about our food and beverages?
Scale: 1 = poor ….5 = excellent
The Food How would you rate the taste of your food? Please rate the temperature of your food,
hot food being piping hot. Please rate your visit on the value for the
money. Overall, how would you rate your visit Would you recommend this Olive Garden to
a close friend or relative?
Example: The Olive Garden
Open-ended questions: What one thing did you like most about
your visit? What one thing could we do to improve
your experience at The Olive Garden? Survey form provides address, 800
number, FAX, and TDD number for hearing impaired
Difficulties with Customer Satisfaction Measurement
Poor measurement schemes Failure to identify appropriate quality
dimensions Failure to weight dimensions appropriately Lack of comparison with leading
competitors Failure to measure potential and former
customers Confusing loyalty with satisfaction
Customer and Market Focus
in the Baldrige CriteriaThe Customer and Market Focus category
examines how an organization determines requirements, expectations, and preferences of customers and markets; and how it builds relationships with customers and determines the key factors that lead to customer acquisition, satisfaction, and retention, and to business expansion.3.1 Customer and Market Knowledge3.2 Customer Relationships and Satisfaction
a. Customer Relationshipsb. Customer Satisfaction Determination