customer statisfaction, retention and loyalty(izzat)

8/13/2019 Customer Statisfaction, Retention and Loyalty(Izzat)

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In a total quality setting, customers define quality and employees

produce it. Historically, organization have viewed customers as

people who buy and use their products. These are external

customers. There are also internal customers within any

organization- the staff.

With this background, an accurate recasting of the first sentence is

as follows: in a total quality setting, external customers define

quality and internal customers produced it.


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UNDERSTANDING WHO IS

CUSTOMERS?

Historically the concept of suppliers and customers has been

interpreted as shown in Figure 1. An organization uses certain

process by which is produces its products.

People who interact with the company after these processes have

produced the product have been viewed as customers. From this

traditional perspective, customers and supplies are both external

entities.


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In a total quality settings, customers and supplies exist inside and

outside the organization. Any employee whose work precedes that

of another employee is a supplier for that employee.

Correspondingly any employee whose work follows that of another

employee and is dependent on it in some way is a customer.


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SIX-STEP STRATEGY FOR IDENTIFYING

CUSTOMER NEEDS

Speculateabout the

result

Plan how togather the

information

Gather theinformation

Analyze theresult

Check thevalidity of

yourconclusions

Take actionas indicated


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SPECULATE ABOUT THE RESULT

Before gathering information about customer needs. It is a good

idea to spend some time speculating about what might be learn

Write down what you think customers will say so that you can

compare expectation.

This step is to help representative determine where there touchthe customer needs.


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PLAN HOW TO GATHER THE INFORMATION

Before implimentating the entire information-gathering plan, its a

good idea to conduct a smaller pilot study involving just a few

customers.

This will identify problems with the information-gathering

methodology that should be correct before produced on a large scale.

Activity


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GATHER THE INFORMATION


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ANALYZE THE RESULT

Result should be analyzed carefully and objectively.


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TAKE ACTION AS INDICATED

Based on the final conclusion, what change need to be made?

Take any corrective action that can be made immediately.

Lay out a plan.

Meet the customer- let them know what is going on


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IDENTIFYING INTERNAL CUSTOMERS

NEEDS

Identifying the needs of internal customers is a matters of ensuring that

employees who depend on one another as individuals, as well as departments

that depend on each other as units, communicate their needs to one


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COMMUNICATING WITH CUSTOMERS

Continual communication with customers is essential in a competitive

marketplace. Establishing effective mechanisms for facilitating communication

and using them are critical strategies in establishing a customer focus.


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KNOW YOUR CUSTOMERS OPERATIONS

As a supplier to other companies (customers), it is important to know their

operations. The more that is known about a customers operations , the easier

it will be to provide products that meet its needs.


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USING CUSTOMER FEEDBACK TO MAKE

DESIGN IMPROVEMENTS

It is important for organizations that compete in the global arena to collect

customer input and feedback and use it to make continual improvements to

the design of their products.


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QUALITY FUNCTION DEPLOYMENT AND

DESIGN IMPROVEMENT

It is important to know that a product will meet the needs of customers before

you put it into production. This is the main reason for conduction the research

necessary to identify customer needs and communicating with internal and

external customers. Quality function deployment was developed with this in

mind.


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QFD ( QUALITY FUNCTION DEPLOYMENT)

Deployment of customer requirements (quality needs).

Deployment of measurable quality characteristic.

Determination of the correlation between quality needs and characteristic.

Assignment of numerical value to each quality characteristic

Integration of quality characteristic into the product.

Detailed design, production, and quality control of the product.


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CUSTOMERS SATISFACTION PROCESS

Determine who your customers are.

Determine what attributes of your product or service are most important toyour customers

Arrange these attributes in the order of importance indicates by yourcustomers.

Determine your customers level of satisfaction with each of these attributes.

Tie result of customer feedback to your process.

Develop a set of metric (measurement) that tell how you performing .

Update customer input and feedback.

Maintain open, continual communication with all stakeholder.


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CUSTOMER RETENTION


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INTRODUCTION

Customer satisfaction is fundamental of total quality.

The success of quality management depend on customer satisfaction.

Customer retention is another part to measure customer satisfaction.

Customer retention defines as the marketing goal of preventing customers

from going to the other competitor.


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Focus

Group

The objective is to improve product and services

Meet together for group discussion

Input

Group

The objective is to improve product and services

There interact using mail, telephone and

facsimile


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OTHER METHOD COLLECTING CUSTOMER INPUT

An individual who dobusiness with theorganization

TESTCUSTOMER

Conduct periodically

to identify issue thatmay become problems

SURVEYCUSTOMER


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ESTABLISHING A CUSTOMER FOCUS

VISION,COMMITMENTAND CLIMATE

Totally committed to satisfying customer

They establish a climate of customer satisfaction.

ALIGNMENTWITH

CUSTOMER

Employee understand what product attribute thecustomer value most and the feedback will contribute toproduct development process.

WILLINGNESS TOFIND ANDELIMINATE

CUSTOMERS

PROBLEM

Company identify and eliminate problem for customer


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CONT.

Continualimprovement of

product and process

Customer as driven of thecompanies on whatnecessary to improvetheir product andprocesses on producing it.


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RECOGNIZING THE CUSTOMER DRIVEN

ORGANIZATION

Customer DrivenOrganization

Promptly follows through on allpromises

Can be trusted

Has credibility

Attends to even the smallest detail

Responsiveness

Management Characteristics

Effective communication withcustomer

Use of customer specific metric

Systematic use of customerfeedback

Customer focused organizational

structure


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VALUE PERCEPTION AND CUSTOMER

LOYALTY

Basically its about what can the organization made you as customer that can

desire loyalty.

Company spend much on marketing to attract customer that they must keep

them for the long time

The best way to generate customer loyalty is to consistently provide customers

with superior services.

Superior Value is a combination of Superior Quality, Superior Cost and

Superior Services.

All these 3 combination will continually improved in order to maintain the

loyalty of customer.


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CUSTOMER LOYALTY MODEL

There are 4 phase model:

Business Performance

Global Perception

Loyalty Behaviors

Financial Outcomes


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GlobalPerceptions

If the customer satisfied with the organization, itwill help to recommend your organization to otherpotential customer.

LoyaltyBehavior

Customer loyalty is a behavioral concept, but it canbe measured.

Measure the volume of business for customergoing up or down


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FINANCIAL OUTCOME

Financial outcomes are affected several key factor including:

Market Share

High customer loyalty leads to a larger market share, which in turn, leads to better

financial outcomes

Reduced Costs

Repeat customer cost less to deal with than new customer, which means that customer

loyalty decreases the cost of doing business

Employee Attitude

Positive employee attitude promote positive customer relation

Profit

Increased market share can result in increased profits, provided the cost of doing

business is held level or even decreased by customer loyalty

Share Holder Value

Customer loyalty can result in higher profit, which, in turn, are a key driven of share

holder value


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CUSTOMER LOYALTY VERSUS CUSTOMER

PROFITABILITY Customer loyalty is as a general rule desirable goal.

Werner Reinartz and V.kumar make the critical point that whencustomer are sorted according to their profitability and longevity, itbecome clear that relationship between loyalty and profits is by nomeans assured.

The different type of business sorted into one of four quadrants:

High profitability / Short TermButterflies

High profitability / Long TermTrue Friend

Low profitability / Short TermStranger

Low profitability / Long Term - Barnacles


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BUTTERFLIES

Butterflies are highly profitable customer, but they dont stay around long.

There are several strategies dealing with butterflies:

1. Aim to achieve transactional satisfaction rather than long term loyalty.

2. Work the accounts only as long as they are active-dont waste time chasing a

rainbow.

3. Make wise decision about the optimum time to break off the relationship.


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TRUE FRIEND

True friend are highly profitable and they are loyal. There several strategies are recommended for dealing with true friend:

1. Communicate consistently, but dont over it

2. Build both attitudinal loyalty and behavioral loyalty.

3. Nurture defend and partner with them to create customer delight.


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STRANGERS

Strangers provide only low profitability and are short term customer.

Several strategies recommended dealing with strangers:

1. Make the best profit possible on every individual transaction

2. Make no investment in the relationship.


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IMPLEMENTING THE INNOVATION

PARTNERSHIP APPROACH

1. Develop a tool kit for customer that is easy to use. The tool kitshould:

1. Enable customer to run repeated try and error

experiments and test quickly easily and efficiently.2. Use technology that allow customer to work in a familiar

design language

3. Include a library of standard design modules to make iteasier for customer to create complex design quickly.

4. Use technologies that tie into manufacturing processes sothat customer design can be sent directly tomanufacturing with little or no tailoring required.


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PRODUCT INNOVATION MODEL FOR

CUSTOMER RETENTION

Providing superior value is innovation

Innovation is how organizations continually improve the quality and cost of

their product as well as the quality of their services.

Praveen Gupta has developed an innovation model that organization can use

to keep product up to date, attractive and relevant for the customers:-


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CONT.

1. Target the opportunity

Focus on identifying customer needs and use them to guide innovation.

2. Explore the idea

Conduct a through research to ensure that the proposed innovation will be successful in themarketplace.

3. Develop alternative

Develop a variety of alternative for the innovation- prototype and test them thoroughly todetermine which is the best.

4. Optimize the solution

Take the chosen alternative and optimize it for production and delivery

5. Commercialized the innovation

Develop and deploy an effective marketing program for the innovation. Never let aninnovations fail for lack of effective marketing.


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customer statisfaction, retention and loyalty(izzat)

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