L02B Customers Post
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Transcript of L02B Customers Post
SJSU Bus. 142 - David Bentley 1
Lecture 2B – Focusing on Customers
Lecture 2B – Focusing on Customers
“Customers”, satisfaction vs. loyalty, leading practices, customer groups,
dimensions of quality, tools and measurement
SJSU Bus. 142 - David Bentley 2
What is a customer? Richard Schonberger: “The customer
is the next process” Final Customer vs. next customer
The Big “C” vs. the little “c” Who is/are my customer(s)? Who is/are your customer(s)?
SJSU Bus. 142 - David Bentley 3
Voice of the Customer (Foster)
Wants, opinions, desires, or perceptions by the customer, or
“A standardized, disciplined, and cyclical approach to obtaining and prioritizing customer preferences” Cyclical vs. continual?
SJSU Bus. 142 - David Bentley 4
What Do Customers Want? Quality Price Lead-time Service Flexibility Variability
SJSU Bus. 142 - David Bentley 5
What Do Customers Want? High Quality Low Price Low Lead-time High Service High Flexibility Low Variability
SJSU Bus. 142 - David Bentley 6
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.
THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
SJSU Bus. 142 - David Bentley 7
American Customer Satisfaction Index
Measures customer satisfaction at national level
Introduced in 1994 by University of Michigan and American Society for Quality
Continual decline in index from 1994 through 1997 with a gradual improvement into 2004, dip in 2005, record high in 2007
Quality improvements have exceeded pace consumer expectations during recent years
THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM MOD 02/24/06 DAB
SJSU Bus. 142 - David Bentley 8
ACSI Model of Customer Satisfaction
Perceivedquality
Customercomplaints
Perceivedvalue
Customer satisfaction
Customerexpectations Customer
loyalty
THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
SJSU Bus. 142 - David Bentley 9
J. D. Power & Associates (jdpower.com)
“a global marketing information services firm that provides clients with relevant and actionable market research, forecasting, consulting and training”
“primary catalyst in bringing the language of customer satisfaction to numerous industries”
Survey customers and provide quality and customer satisfaction ratings for autos, boats, finance, travel, telecom, homes, international
SJSU Bus. 142 - David Bentley 10
Customer-Driven Quality Cycle
measurement and feedback
Customer needs and expectations (expected quality)
Identification of customer needs
Translation into product/service specifications (design quality)
Output (actual quality)
Customer perceptions (perceived quality)
PERCEIVED QUALITY = ACTUAL - EXPECTED
THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
SJSU Bus. 142 - David Bentley 11
Leading Practices - 1 Define and segment key customer
groups and markets Understand the voice of the
customer (VOC) Understand linkages between VOC
and design, production, and delivery
THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
SJSU Bus. 142 - David Bentley 12
Leading Practices - 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
THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
SJSU Bus. 142 - David Bentley 13
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?
THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
SJSU Bus. 142 - David Bentley 14
AT&T Customer-Supplier Model
Requirementsand feedback
Requirementsand feedback
Your Suppliers
YourProcesses
YourCustomers
Inputs Outputs
THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
SJSU Bus. 142 - David Bentley 15
Model of Customer Needs (review) - Noriaki
Kano Dissatisfiers: expected
requirements (usually implied) Satisfiers: expressed
requirements (usually explicit) Exciters/delighters:
unexpected features (pleasant surprise)
THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM Mod. 10/21/02 DAB
SJSU Bus. 142 - David Bentley 16
The Kano Model (review)
Kano Model
Customer Needs
Cu
sto
mer
Sati
sfa
cti
on
Excitement
Expected
Must Have
Kano Model
Customer Needs
Cu
sto
mer
Sati
sfa
cti
on
Excitement
Expected
Must Have
Operations Management, Seventh Edition, by William J. Stevenson
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
SJSU Bus. 142 - David Bentley 17
Customer Relationship Management (CRM)
Customer Relationship Management Complaint Resolution Feedback Guarantees Corrective Action
Dozens of CRM systems, including Salesforce.com (Salesform.com CRM
Professional) Oracle (Siebel CRM) Sage (SageCRM.com and ACT!) SAP (SAP CRM)
SJSU Bus. 142 - David Bentley 18
Customer Listening Posts
Comment cards and formal surveys Focus groups Direct customer contact Field intelligence Complaint analysis Internet monitoring
THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
SJSU Bus. 142 - David Bentley 19
Tools for Classifying Customer Requirements
Affinity diagram Tree diagram
Effective ServiceCommunication
ModemLink
TimelyReports
AccurateInformation
NotificationOf Ind’y Stds.
Mutual JobUnderstanding
BuyerOrientation
Reliability
PriorApprovals
Flexibility
ExpeditiousProcesses
TimelyClosings
EffectiveService
Communic’n
LoanProducts
THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
(Kawakita Jiro)
Mod. 10/21/02 DAB
SJSU Bus. 142 - David Bentley 20
Customer Relationship Management
Accessibility and commitments Selecting and developing customer
contact employees Relevant customer contact
requirements Effective complaint management Strategic partnerships and alliances
THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
SJSU Bus. 142 - David Bentley 21
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
THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
SJSU Bus. 142 - David Bentley 22
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?
How was the pace of your meal?
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?
Scale: 1 = poor ….5 = excellent
THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
SJSU Bus. 142 - David Bentley 23
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
THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
SJSU Bus. 142 - David Bentley 24
Performance-Importance Analysis
Performance
Importance
Low High
Low
High
Who cares? Overkill
Vulnerable Strengths
THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM
SJSU Bus. 142 - David Bentley 25
Total Customer Experience “I believe that HP owes our customers
a superior Total Customer Experience (TCE) when dealing with us, and I am personally committed to improving TCE and making it a competitive differentiator for HP.”
Carly Fiorina Former President and CEO, Hewlett-Packard
SJSU Bus. 142 - David Bentley 26
Total Customer Experience Customers are our most important assets Customers always define their own
desired experience Need to be close enough to anticipate
their needs and flexible enough to meet them
Important to develop deeper relationships with end users
Carly Fiorina
SJSU Bus. 142 - David Bentley 27
Making a TCETo truly hearcustomers be:
To remove barriersfrom customers be:
To create solutionsfor customers be:
Attentive Flexible Competitive
Aware Responsive Cost-effective
Involved Efficient Imaginative
Committed Dependable Capable
SJSU Bus. 142 - David Bentley 28
The Malcolm Baldrige National Quality Award
Awarded by US Department of Commerce
Result of 1987 congressional legislation
Named after Secretary of Commerce Promotes awareness of performance
excellence Awarded in business, education,
health care, non-profit sectors
SJSU Bus. 142 - David Bentley 29
Customer and Market Focus in the Baldrige Criteria
The 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
THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM