focusing on customers

8/3/2019 Focusing on Customers

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Prof. Rushen Chahal

Prof. Rushen ChahalProf. Rushen Chahal

Focusing on Customers

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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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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


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Prof. Rushen Chahal

ACSI Model

of Customer Satisfaction

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Perceived

quality

Customer

complaints

Perceived

valueCustomer

satisfaction

Customerexpectations Customerloyalty


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Prof. Rushen Chahal

Customer-Driven Quality Cycle

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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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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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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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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

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Requirements

and feedback

Requirements

and feedback

YourSuppliers

YourProcesses

YourCustomers

Inputs Outputs


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Prof. Rushen Chahal

Customer Segmentation

Demographics

Geography

Volumes Profit potential

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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


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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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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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Prof. Rushen Chahal

Tools for Classifying

Customer Requirements

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Affinity diagram Tree diagram


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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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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


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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


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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

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focusing on customers

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