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8/3/2019 Focusing on Customers
1/23
Prof. Rushen Chahal
Prof. Rushen ChahalProf. Rushen Chahal
Focusing on Customers
1
8/3/2019 Focusing on Customers
2/23
Prof. Rushen Chahal
Importance of Customer
Satisfaction and Loyalty Satisfaction is an attitude; loyalty is a
behavior
Loyal customers spend more, are willing otpay higher prices, refer new clients, andare less costly to do business with.
It costs five times more to find a new
customer than to keep an existing onehappy.
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8/3/2019 Focusing on Customers
3/23
Prof. Rushen Chahal
American Customer
Satisfaction Index Measures customer satisfaction at
national level
Introduced in 1994 by University ofMichigan and American Society forQuality
Continual decline in index from 1994through 1998 with a small improvementinto 2000 suggests that qualityimprovements have not kept pace with
consumer expectations 3
8/3/2019 Focusing on Customers
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Prof. Rushen Chahal
ACSI Model
of Customer Satisfaction
4
Perceived
quality
Customer
complaints
Perceived
valueCustomer
satisfaction
Customerexpectations Customerloyalty
8/3/2019 Focusing on Customers
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Prof. Rushen Chahal
Customer-Driven Quality Cycle
5
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
8/3/2019 Focusing on Customers
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Prof. Rushen Chahal
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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8/3/2019 Focusing on Customers
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Prof. Rushen Chahal
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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8/3/2019 Focusing on Customers
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Prof. Rushen Chahal
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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8/3/2019 Focusing on Customers
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Prof. Rushen Chahal
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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8/3/2019 Focusing on Customers
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Prof. Rushen Chahal
AT&T Customer-Supplier Model
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Requirements
and feedback
Requirements
and feedback
YourSuppliers
YourProcesses
YourCustomers
Inputs Outputs
8/3/2019 Focusing on Customers
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Prof. Rushen Chahal
Customer Segmentation
Demographics
Geography
Volumes Profit potential
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8/3/2019 Focusing on Customers
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Prof. Rushen Chahal
Key Dimensions of Quality
Performance primary operatingcharacteristics
Features bells and whistles
Reliability probability of operating forspecific time and conditions of use
Conformance degree to whichcharacteristics match standards
Durability - amount of use beforedeterioration or replacement
Serviceability speed, courtesy, andcompetence of repair
Aesthetics look, feel, sound, taste, smell12
8/3/2019 Focusing on Customers
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Prof. Rushen Chahal
Key Dimensions of Service
Quality Reliability ability to provide what waspromised
Assurance knowledge and courtesy of
employees and ability to convey trust
Tangibles physical facilities and
appearance of personnel
Empathy degree of caring and individualattention
Responsiveness willingness to help
customers and provide prompt service
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Prof. Rushen Chahal
Kano Model of Customer Needs
Dissatisfiers: expected requirements
Satisfiers: expressed requirements
Exciters/delighters: unexpectedfeatures
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8/3/2019 Focusing on Customers
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Prof. Rushen Chahal
Customer Listening Posts
Comment cards and formal surveys
Focus groups
Direct customer contact Field intelligence
Complaint analysis
Internet monitoring
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8/3/2019 Focusing on Customers
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Prof. Rushen Chahal
Tools for Classifying
Customer Requirements
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Affinity diagram Tree diagram
8/3/2019 Focusing on Customers
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Prof. Rushen Chahal
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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8/3/2019 Focusing on Customers
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Prof. Rushen Chahal
Measuring Customer
Satisfaction Discover customer perceptions of
business effectiveness
Compare companys performancerelative to competitors
Identify areas for improvement
T
rack trends to determine if changesresult in improvements
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Prof. Rushen Chahal
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 andable 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 ofyour 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?
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Scale: 1 = poor .5 = excellent
8/3/2019 Focusing on Customers
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Prof. Rushen Chahal
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 forhearing impaired
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Prof. Rushen Chahal
Performance-Importance
Analysis
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Performance
Importance
Low High
Low
High
Who cares? Overkill
Vulnerable Strengths
8/3/2019 Focusing on Customers
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Prof. Rushen Chahal
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 satisfaction22
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Prof. Rushen Chahal
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 customersand 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
23