Dr. Manu Vora VOC Slides 4-23-15

8/18/2019 Dr. Manu Vora VOC Slides 4-23-15

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Voice of the Customer (VOC)Management

Dr. Manu K. Vora, ASQ CQE and Fellow Advisor of Eminence, Business Excellence, ASQ India

Chairman and President, Business Excellence, Inc., USA

ASQ LES Series – Topic 9, 23 April, 2015


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Customer Satisfaction & EconomicJustification - Why

Customer Satisfaction ManagementPrinciples - What

Customer Delight: - How

Voice of the Customer (VOC)

World-Class Customer Service

Best-in-Class Examples

Outline


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Study of 22 companies who received a SiteVisit or won the Baldrige Award ( 1988-1991 ):

Improved customer satisfaction

Improved employee satisfactionImproved operational parametersEnhanced financial performance

Reference: US General Accounting Office study (GAO NSIAD 91-190, May 1991).

Economic Justification


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Customer Satisfaction Results

Parameter Average Annual% Improvement

FavorableIndicator

UnfavorableIndicator

NoChange

OverallCustomerSatisfaction

2.5 12 0 2

CustomerComplaints

(11.6) ↓ 5 1 0

CustomerRetention

1.0 4 2 4

Total 17 companies responded.

Reference: GAO NSIAD 91-190, May 1991. Total 22 companies responded.


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Enhanced Financial Performance Results

Parameter AverageAnnual %

Improvement

FavorableIndicator

UnfavorableIndicator

NoChange

Market Share 13.7 9 2 0Sales perEmployee

8.6 12 0 0

Return on Assets 1.3 7 2 0Return on Sales 0.4 6 2 0

Total 15 companies responded.


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Management of Critical Voices

DelightedCustomers

(VOC)

ImprovedProcesses

(VOP)

ExcitedEmployees

(VOE)Operational Performance Financial Performance

VOC - Voice ofthe Customer

VOE -Voice of the

Employee

VOP - Voice ofthe Process


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Customer-Supplier Relationship

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Supplier Customer Process Input Output

Requirements& Feedback

Requirements& Feedback

Source: AT&T PQMI, Issue 1.1, 1988.


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The KANO Model of Customer Satisfaction


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LAGGINGFinancial

CURRENTCustomer

LEADINGEmployee

LEADINGProcess

Vision &Strategy

Balanced Scorecard Indicators


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Voice of the Customer (VOC) is acomprehensive Systems Approach toeffectively manage customer needs and

expectations.It requires systematically listening tomultiple customer voices, analyzing,

prioritizing and then responding tocustomer issues.

Voice of the Customer (VOC)


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VOC Model

Capture

Analyze

Respond

Verify


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Annual perception surveys (mail, telephone, web based,personal interview)Customer generated Report Cards (specific to a customer)Immediate feedback surveys (post-event surveys)

Customer Forums (target market segmented, by issues)Executive Visits with CustomersOn-Site Customer Visits Focus Groups (qualitative research)Internal data base of Customer Complaints from the FieldTrade Association Events – competitive informationTrade Journals – competitive informationIndustry Specific Reports by a Third-Party

How of VOC: Capture(What are our customers saying?)


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Does too little, too late

Doesn’t include information about competitorsDoesn’t focus on important customers (gold clients )Doesn’t match the depth of the tool to the sophisticationof customersIs designed at too low level in the organizationFails to see that you are managing perception while youare measuring itDoesn’t take pricing into accountDoesn’t test the tools before deploying themSettles for too small a response rate Source: Sheila Kessler, Measuring and Managing Customer Satisfaction, 1996 .

Problems with Current Customer Satisfaction System


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Product - features, functionsDelivery - reliability, accuracyService - staff know-how, courtesy,responsivenessValue - benefit receivedOverall - repurchase, recommendation

Competition - best other alternative

Customer Survey


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Trend Analysis – year over yearHigh and Low ScoresSatisfiers and Dissatisfiers Competitive InformationIntegration, Prioritization and ConsensusTop 2-3 Focus Areas (VOC Projects) by

Market SegmentFocus by Top Customers (Revenue, Growth,Emerging Sector, etc.)

How of VOC: Analyze(What did we hear?)


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Keep Up the GoodWork

(Hold the Gains)

Possible Oversupply(Reassign Resources)

I m p o r t a n c e

W e i g h

t s

Source: Terry G. Vavra, Quality Progress, Vol. 35, No. 5, 69-75, 2002.

Satisfaction Ratings

Focus on anOpportunity

(Must Improve)

Low ImportanceLow Priority

(Maintain CurrentStatus)

The Quadrant Chart


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Use of Policy Deployment to Set Objectives for VOC ProjectsUse Quality Improvement/Problem Solving method (e.g., Quality Improvement Story)Perform Root Cause Analysis (why? why? why?)Develop Key Countermeasures (solutions)Implement CountermeasuresMake Solutions Permanent Use Project Management approach to MonitorProgress

Address Product, Process, & ServiceImprovements

How of VOC: Respond(What are we doing?)


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Use new scores to validate progressof VOC Projects

Share VOC Project Results toInternal and External Customers Continuous dialogue with customers

Celebrate VOC Project success

How of VOC: Verify(What do we tell our customers?)


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Customer Satisfaction Average (CSA ) – OwnCompany ScoreRatio of Own Company/Best Other Vendor Score= CVA (Customer Value Added):

CVA = 1.0 Parity CVA > 1.0 Better than Competition CVA


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Satisfied customers may tell 4-6 other people; they are very

forgiving.96% of all dissatisfied customers won’t ever complain.90% of dissatisfied customers won’t be back to buy from you -they will tell at least 9 other people.10% will tell 20 or more other people how poorly they were

treated.Cost of acquiring a new customer is much higher than retainingthe same customer ( 5-7 times more ).When people act as citizens, they vote with their ballots.When people act as customers, they vote with their feet andwallet.

Satisfied and Dissatisfied Customers


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Bad Customer Service (2.20 min.):http://www.youtube.com/watch?v=bTbHwnxCGaI

Ultimate Customer Service (3.43 min):http://www.youtube.com/watch?v=8T54rQrMleA

Customer Service – Some Examples…

http://www.youtube.com/watch?v=bTbHwnxCGaIhttp://www.youtube.com/watch?v=8T54rQrMleAhttp://www.youtube.com/watch?v=8T54rQrMleAhttp://www.youtube.com/watch?v=bTbHwnxCGaI


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1. Your only excuse for being in business is to satisfy your customers.

2. You sell value - or you don’t sell anything at all!3. Customer define value in their own terms.4. If anything happens after the sale, the customer hasn’t gotten the value.5. Dissatisfied customers aren’t problems; they are golden opportunities.6. The really demanding customers are platinum opportunities.

7. Focus on saving the customer, not on saving the sale.8. There is no compromise for customer satisfaction and loyalty.9. Treat your frontline people well, so they treat your customers well.10. Give your customers a reason to give you honest comments.11. To satisfy an unhappy customer, you must add extra value.12. Always treat a customer as if he/she will remain a customer.13. Always provide a dissatisfied customer a positive reason to deal with you.14. Your processes must support the creation of customer satisfaction and loyalty.15. Consistently satisfy your customers.

Source: Clay Carr, Front-Line Customer Service, 1990.

15 Keys to World-Class Customer Service


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Eastman Chemical Company (1993 Baldrige,Manufacturing):From 1989-1993, 100% shipping reliability.

From 1986-1991, rated outstanding on product quality,product uniformity, supplier integrity, correct delivery,and reliability by customers.Federal Express Corporation (1990 Baldrige, Service):

100% service standard , 12-component index (ServiceQuality Indicator).

Customer Focus -Some Baldrige Winner Examples


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IBM Rochester (1990 Baldrige, Manufacturing):Since receiving the Baldrige Award in 1990, customer

satisfaction surveys have shown that satisfaction withRochester’s AS/400 has increased by more than 10

points; in addition, these surveys demonstrate a 97%customer loyalty rating.The Ritz-Carlton Hotel Company, L.L.C, (1992 & 1999Baldrige, Service): 75% of its customers would not use acompetitor regardless of the offer.

Customer Focus


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City of Coral Springs (2007 Baldrige, Non-Profit):

Resident Satisfaction – 94%Business Customer Satisfaction – 96%Schools Earning A Grade – 86%Triple A Bond Rating

Customer Focus

http://www.baldrige.nist.gov/PDF_files/2007_Coral_Springs_Application_Summary.pdf


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MESA Products, Inc.: Customer Focus2006 Small Business

Customer complaint process

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•Internal/external• Major/minor• Tracked/segmented/analyzed• Follow-up


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Cycle-Time Reduction for ASQ Exam Result Notification Interval

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2196

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65006302

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Dec-88 Jun-89 Dec-89 Jun-90 Dec-90 Jun-91 Dec-91 Jun-92 Dec-92 Jun-93

Month/Year

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k s o

f R e s u l t

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t i f i c a

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o f p e o p

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k E x a m s

Weeks Promised


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AT&T (1988), P rocess Quality Management & Improvement Guidelines, Issue 1.1.

Baldrige Performance Excellence Program (2015-2016,) Criteria for Performance Excellence, US NIST, Gaithersburg, MD.http://www.nist.gov/ Carlzon J. (1989), Moments o f Truth, Harper Collins , New York, NY.Carr C. (1990), Front-Line Customer Service - 15 Keys to Customer Satisfaction, John Wiley & Sons, New York, NY.Goodman J., DePalma D., & Broetsm ann S. (1996), “ Maximizing t he Value of Custo mer Feedback,” ASQ Qual ity Progress ,

December issue.Hayes R. E. (1998), Measuring Customer Satisfaction , ASQ Quality Press, Milwaukee, WI.Kano, N., Seraku, N., Takahashi, F. & Tsuji, S. (1996), “ Attracti ve Quality and Must -be Quality” , In the Best on Quality,

John D. Hromi, Edito r, Vol. 7, Book Series of the Internation al Academy for Quality, ASQ Quality Press, Milwaukee, WI.Kaplan R. S. & Norton D. P. (1996), The Balanced Scorecard , Harvard Business School Press, Boston, MA.Kess ler S. (1996), Measuring and Managing Cust omer Satisf action: Going for th e Gold” , ASQ Quali ty Press , Mil wau kee, WI.Liebesman, S. (2002), “ Add Value to ISO 9001:2000 Audits” , Quality Progress, pp . 104-106, May issue.US General Accoun ting Office Study (1991), Management Practices: U.S. Companies Improv e Performance Through Quality

Effo rts (GAO NSIAD 91-190), May. Vavra, T. G. (2002), “ ISO 9000:2000 And Custom er Satisfacti on” , Quality Progress, Vol. 35, No. 5, pp. 69-75, May.Vora, M. K. (2005), “ Voice Of the Custom er (VOC) Management” , Invited Keynote Addr ess at th e Costa Rica Quality Conference,

San Jose, Cost a Rica, March 15.Vora, M. K. (2003), “ Global Quality Management with out B oundaries” , Invited Guest Editori al, Zairi, M. (Ed.), The TQM Magazine ,

Vol. 13, No. 2, pp. 69-70, March.Vora, M. K. (2002), “ Busin ess Excellence throug h Quality Management” , Total Quality Management, Vol . 13, No. 8, pp. 1151-1159,

December.

Vora, M. K. (2002), “Creating Cust omer Value thro ugh Voice of the Custom er Management” , 7th World Congress f or TQM,Proceedi ngs , Vol. 2, pp. 73-81, Verona, Italy, Jun e 27.Vora M. K., Harthun S. & Kingen R. (1993), “ASQC Certificatio n Commi ttee Practices What It Preaches”, Quality Progress, pp . 99-

103, November is sue

Major References


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Dr. Manu Vora VOC Slides 4-23-15