29422834 Chapter 7 Customer Focus and Satisfaction

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CHAPTER 7

CUSTOMER FOCUS AND SATISFACTION


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TQM in PakistanAcknowledgement by the customer in the from of Letter Published in Daily Dawn onThursday, September 27, 2007


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Amazing experienceI WENT through an amazing experience while dealing with a medical surgery. Unfortunately, I have dealt with surgery cases in my family so many times and every case was a torturous experience full of agony and mental stress. The timings given for operation are never followed. You never know as to how long will your patient be kept in the ICU after operation. Lastly, it is never confirmed as to whenyour patient would be released from hospital. The attendants are always askingone question or the other regarding different things concerning the patient. Recently one of my sisters was operated upon by Dr Kishwer Nazli in Fatima Hospitalin Lahore. The case was handled with amazing professional ethics and efficiency. Patient and caretakers were told about each and every step in writing. These instructions included each and every question that could come to your mind. Timings for every major event were spelled out well in advance. The punctuality of events was remarkable. I was just wondering as to how this could happen in Pakistan. All this reduced our worries to almost nothing as we knew well in advance what is the sequence of events and we prepared ourselves accordingly. Hats off to the professional standards maintained by the respected doctor and the hospital. Iwish other hospitals can also follow the same standard. DILAWAR HUSAIN Karachi


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The Baldrige Criteria of Customer Satisfaction7.0 Customer Focus and Satisfaction7.1 7.2 7.3 7.4 7.5 7.6 Customer expectation: current and future Customer relationship management Commitment to customer Customer satisfaction determination Customer satisfaction results Customer satisfaction comparison

30035 65 15 30 85 70


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Who is the customer?There are two types of customer: External and Internal

External Customer Direct purchaser InfluencerCurrent, prospective, and lost customers

Internal Customer (Functions supporting each other) Engineering Production Order processing Etc.


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Customer Supplier Chain

Inputs from External Customers

Internal Customers

Outputs To External Customers


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Characteristics of external customerAn external customer can be defined in many ways, such as one who uses the product or service, or the one who influences the sale of product or service. An external customer exists outside the organization and generally falls into three categories:

1. Current customers 2. Prospective customers, and 3. Lost customer


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Characteristics of external customer Every function, whether it be engineering, order

processing, or production has an internal customer each receives a product or service and in exchange, provides a product or service.

Every person in a process is considered customer of the

preceding process. Each workers goal is to make sure that the quality

meets the expectations of the next person. When that happens throughout the manufacturing, sales,

and distribution chain, the satisfaction of the external customer should be assured.


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Why do customers are important for an organization? The most important asset of any organization is its

customers. An organizations success depends on:

How many customers it has How much they buy, and How often they buy Customers that are satisfied will increase in number, buy

more, and buy more frequently. Satisfied customers also pay their bills promptly, which

greatly improves cash flowthe life blood of any organization.


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Customer Satisfaction: Three Parts SystemCustomer Expectations

Human Resource Management

Company Operations (Processes)

Customer Satisfaction


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Customer Relationship Management Customer Care An organization should revolve around the customer,

because customers are the key to any business. A customer, any customer, should be valued and

treated like a friend. If they are treated with respect customers will simply

forgive errors and positively promote the organization. Henry Ford once said to his employees, It is not the

employer who pays wageshe only handles the money. It is the customer who pays wages.


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Customer CareFront-Line People

Customers are the most valuable assets of any company and should not be referredto employees who have not been trained to handle their complaints. Only the best employees are worthy of a companys customers. Three things are very important about the front-line employees: 1. Hire the best. 2. Develop the best employees into professionals. 3. Motivate the professionals to stay and excel.


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Customer CareFront-Line People Why front-line employees important for an

enterprise? Front-line people deal with the customers every day. They are valuable source of information for the enterprise. They know better than management what the customers want.


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Internal Customer Conflict Internal customer are the people,activities, and functions within the company that are the customers of other people, activities and functions.

Conflict frequently arises between theneeds of internal and external customers.

The solution is to determine the realneeds of each and design the process to meet the both.


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Translating Needs into Requirements: Kano Model

There are three areas of customer needs or requirements of customers: Spoken orexpected requirements of customers Innovative products or services requirements.Unstated and unspoken requirements Kano presented these requirements in a graphical form.

1. 2. 3.


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Kano ModelCustomer Satisfied Easily identified Exciters Quickly become expected Typically performance related

Innovation

Spoken and expected requirements Requirements satisfied Unspoken but expected requirements Obvious on the casual observer Known only to the experienced users and designers Typically rediscovered during analysis of lessons learned Customer dissatisfied

Requirements Not satisfied


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Translating Needs into Requirements: Kano Model Kano model conceptualizes customer requirements. It

represents three major areas of customer satisfaction. First Area: Spoken or Expected Requirements of Customers

The first area of customer satisfaction represented by

diagonal line, represents explicit requirements. These are easily identified requirements, expected to be

met and typically performance related. Satisfying the customer would be relatively simple.


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Translating Needs into Requirements: Kano Model Second Area: Innovation This area is represented by a curve line in the upper left

corner of the figure. A customers written instructions are purposefully vague

to avoid shifting new ideas during conceptualization and product definition. Because they are unexpected, these creative ideas often

excite and delight customer. These ideas quickly become expected.


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Translating Needs into Requirements: Kano Model Third Area: Unstated and Unspoken Requirements

The third and most significant area of customer

satisfaction represents unstated or unspoken requirements. the figure.

These are shown in the curve in the lower right corner of The customer may indeed be unaware of these

requirements, or may assume that such requirements will be automatically supplied. prove very costly if ignored.

These implied requirements are the hardest to define but


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Understanding voice of the customer The voice of customer is important to be heard and

incorporated in the product or service. Customers doesnt buy specification; customer buys the

product or service to fulfill need. Peter Drucker once said, Customer dont buy products,

they buy results. Customers are loyal to whatever best helps them

achieve their desired outcome. Just meeting customers need is not enough; the

organization must exceed customers needs.


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Voice of the customerHow is the voice of the customer heard? Customer reports NBA Surveys Focus groups Design reviews Interviews Site visits Voice of the customer For evaluating Internal External Who is the customer?

Clarify verbatim Affinity diagrams QFD IPD Team meetings

For listening For listening

How is the voice of the customer evaluated?

Who has what responsibilities?


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The Driver of Customer Satisfaction If you cannot measure it, you cannot manage it.This time-tested adage certainly applies to the timemanagement of customer satisfaction and retention.

Customer retention is directly related to

Customer Satisfaction. And what drives the satisfaction can be known by simply asking the customers directly. There, however, are certain pitfalls in the methodology:

Customer can be approached by surveys. Mailed questionnaires lose control over who

respond Customers are less likely to respond if they are dissatisfied


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Getting Employee InputEmployees Input can be solicited concurrent to customer research It could help identify barriers and solutions to service and product problems as well as serving as a customer-company interface. customerIn addition to customer related considerations, employee surveys can measure:1. 2. 3. 4. 5.TQM effectiveness Skills and behaviors that need improvement The effectiveness of team problem-solving problemprocesses The outcomes of training programs Needsof internal customers


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Measurement of Customer SatisfactionThere are two basic steps in measurement system: 1. Develop key indicators thatdrive customer satisfaction 2. Collect data regarding perception of quality received bycustomers

Key Indicators for Physical Products Reliability Aesthetics Adaptability Usability Functionality Appropriateness Key Indicators for Services Friendliness/courteousness of employees Safety/risk of service Billing/invoicing procedure Responsiveness to requests Appearance of physical facilities Approachability of the service provider Willingness to listen to customer Honesty and an ability to communicate in clear language


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Service Quality and Customer Retention The ultimate outcome of Customer Focus and Satisfaction is to achieve profit in the private sector and productivity in the public or non-profit sector. nonThe one thing which is proven as result of various studies is the relationship between customer retention and profit. The system for improving customer retentionand profitability has following components:

Internal Service Quality, which established and reinforces a climate and Quality, organization culture directed towards quality. Employee retention, which is achieved through good human resources retention, management practices and organization development methods such as teams, job development, and empowerment. Employeeretention depends on employee satisfaction, which in turn can be related to external services and customer satisfaction. External service quality, which is delivered through organization's quality quality, infrastructure. Customer Satisfaction and follow up, in order to reduce customer defections up, and improve retention and profit.


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Customer Retention and Profitability

SystemInternal Service Quality

Employee Satisfaction Driver

Employee Retention

Customer Retention

Profit

External Service Quality

Customer Satisfaction


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Buyer Supplier Relationship Almost every company purchases products, supplies, or services inan amount that frequently equals around 50% of its sales

Traditionally many of companies follow lowest bidder practiceswhere price is critical criterion.

Now companies are realizing that careful concentration ofpurchases, together with long term buyer-supplier relationship, will buyerreducecosts and improve profits.

Deming realizes this and suggested that a long-term relationship longbetween purchasers and suppliers is necessary for best economy.


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Buyer Supplier RelationshipSeveral guideline will help both the supplier and customer benefit from a long-term partnering relationship: long-

Implementation of TQM by both supplier and customer. Long-term commitment to TQMand to the partnering relationship Longbetween the parties.

Reduction is supplier base. Get suppliers involved in the early stages of research,development, and design.

Benchmarking


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END OF CHAPTER 7


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29422834 Chapter 7 Customer Focus and Satisfaction

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