Focusing in Customer Chapter 4

7/30/2019 Focusing in Customer Chapter 4

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THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM 1

Chapter 4

Focusing on Customers


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Importance of Customer

Satisfaction and Loyalty

Satisfaction is an attitude; loyalty is abehavior

Loyal customers spend more, are willing otpay higher prices, refer new clients, and areless costly to do business with.

It costs five times more to find a newcustomer than to keep an existing onehappy.


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American Customer

Satisfaction Index

Measures customer satisfaction at nationallevel

Introduced in 1994 by University ofMichigan and American Society for Quality

Continual decline in index from 1994 through1998 with a small improvement into 2000suggests that quality improvements have notkept pace with consumer expectations


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ACSI Model

of Customer Satisfaction

Perceived

quality

Customer

complaints

Perceived

valueCustomer

satisfaction

Customer

expectations Customerloyalty


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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


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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


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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


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Key Customer Groups

Organization level

consumers

external customers

employees

society

Process level

internal customer units or groups

Performer level

individual internal customers


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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?


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AT&T Customer-Supplier Model

Requirements

and feedback

Requirements

and feedback

Your

Suppliers

Your

Processes

Your

CustomersInputs Outputs


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Customer Segmentation

Demographics

Geography

Volumes

Profit potential


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Key Dimensions of Quality

Performanceprimary operating characteristics

Featuresbells and whistles

Reliabilityprobability of operating for specific

time and conditions of use Conformancedegree to which characteristics

match standards

Durability- amount of use before deterioration or

replacement Serviceabilityspeed, courtesy, and competence

of repair

Aestheticslook, feel, sound, taste, smell


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Key Dimensions of Service Quality

Reliabilityability to provide what was promised

Assuranceknowledge and courtesy of

employees and ability to convey trust

Tangiblesphysical facilities and appearance ofpersonnel

Empathydegree of caring and individual

attention Responsivenesswillingness to help customers

and provide prompt service


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Kano Model of Customer Needs

Dissatisfiers: expected requirements

Satisfiers: expressed requirements

Exciters/delighters: unexpected

features


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Customer Listening PostsGathering Customer Information

Comment cards and formal surveys

Focus groups

Direct customer contact

Field intelligence

Complaint analysis Internet monitoring


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Tools for Classifying

Customer Requirements

Affinity diagram Tree diagram


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Customer Relationship

Management Accessibility and commitments

Selecting and developing customer contact

employees

Relevant customer contact requirements

Effective complaint management

Strategic partnerships and alliances


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Measuring Customer Satisfaction

Discover customer perceptions of business

effectiveness

Compare companys performance relative

to competitors

Identify areas for improvement

Track trends to determine if changes resultin improvements


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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 toanswer 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


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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 hearingimpaired


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Performance-Importance Analysis

Performance

Importance

Low High

Low

High

Who cares? Overkill

Vulnerable Strengths


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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 formercustomers

Confusing loyalty with satisfaction


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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 Knowledge

3.2 Customer Relationships and Satisfaction

a. Customer Relationships

b. Customer Satisfaction Determination


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THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

Customer Focus on ISO 9000:2000

Management Responsibility section (senior

leadership)

Product Realization section (feedback)

Measurement, Analysis and Improvement

section (customer satisfaction)

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THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

Customer Focus of Six Sigma

Identification of critical to quality (CTQ)

characteristics

Develop a better measurement and control

system

Provide necessary monitoring and control

Improve the design and delivery of CTQs

identified through voice of the customer

processes

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Focusing in Customer Chapter 4