Chapter 5
Focusing on Customers
Slide 5.1
Session Overview
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Importance of Customer Satisfaction
Creating Satisfied Customers
Practices of Successful Companies
Key Dimensions of Service Quality
Customer Relationship Management
Measurement of Customer
Satisfaction
Session Overview cont…
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The learner should be able to:
– Describe the importance of customer
satisfaction
– Name the U.S. index used for measuring
customer satisfaction
– Identify one dimension of service quality
– Name two ways to gather customer
information
Importance of Customer
Satisfaction
Four key goals of any business:
1.
2.
3.
to satisfy its customers
to achieve higher customer satisfaction
than its competitors
to retain customers in the long run
(Ron Glastetter – Jim Wade/Jarvis Motors)
4.
Slide 5.2
to gain market share
American Customer
Satisfaction Index
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Measures customer satisfaction at
national level
Introduced in 1994 by University of
Michigan and American Society for
Quality Control
The index is based on a large national
sample of consumers
– Data is collected by telephone interviews from 46,000 consumers who
recently purchased a product/service
Slide 5.3
American Customer
Satisfaction Index cont…
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Slide 5.4
ACSI is designed to indicate national
trends as well as industry trends
Is based on a model linked to customer
loyalty
Continual decline in index from 1994
through 1997 suggest that quality
improvements are not keeping pace
with consumer expectations
Creating Satisfied Customers
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Customer satisfaction results from meeting and exceeding
customers’ needs
Perceived Quality = actual quality – expected quality
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Actual quality - the outcome of the production/service
process and what is delivered to the customer
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Expected quality - What the customer assumes will be
received
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Unexpected satisfaction - occurs when actual quality exceeds
expected quality
Slide 5.5
Practices of Successful
Companies
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They understand the voice of the customer (VOC)
– Cadillac – uses customer councils (current vehicle owners and
engineers to discuss areas for improvement)
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They understand linkages between VOC and design,
production, and delivery
– Ames Rubber Corp. uses closed-loop communication system to
create a product brief (technical material, & operational
requirements)
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They promote trust and confidence
– Eastman Chemical Company has a no-fault return policy
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They have effective customer relationship
management processes
– GTE Directories handle customer complaints on the first call
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They measure customer satisfaction
– FedEx uses a 10 component Service Quality Indicator to
determine their performance view by customers
Slide 5.6
Identifying Customers
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To understand customers needs, a
company must know who their customer
are.
Identifying customers begins with asking
questions:
– What products or services are produced?
– Who uses these products and services?
– Who do employees call, write to, or answer
questions for?
– Who supplies the inputs to the process?
Slide 5.7
Identifying Customers cont…
n AT&T
Customer Supplier Model
-This
model suggests that suppliers must be considered as a
customer
-Every process receives inputs from suppliers and creates outputs
for customers
Your
Suppliers
Inputs
Requirements
and feedback
Slide 5.8
Your
Processes
Outputs
Your
Customers
Requirements
and feedback
Key Dimensions of Service
Quality
Five key dimensions of service quality
contribute to perception:
1.
Reliability - Ability to accurately & dependability provide
a customer with what was promised
2.
Assurance - Ability of employees to convey trust &
confidence
3.
Tangibles - physical facility, equipment, & appearance
of personnel
4.
5.
Empathy - degree of caring
Responsiveness - willingness to help customers &
provide prompt service
Slide 5.9
Kano Model of Customer
Needs
Three classes of customer requirements:
1.
2.
3.
Slide 5.10
Dissatisfiers: requirements that are
expected (clean hotel room)
Satisfiers: requirements that customers
express (want sunroof in car)
Exciters/delighters: new or innovative
features that customers do not
expect (On-Star by GM)
Gathering Customer Information
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Comment cards and formal surveys
– Gathering information pertaining to the customers’ perception of a
particular quality dimension (open-ended questions)
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Focus groups
– Panel of individuals who answer questions about a company’s
product or services (allows for in-depth probing)
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Direct customer contact
– Workers (CEOs, managers, etc..) contacting customers
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Field intelligence
– Gathering information using employees who have direct contact
with the customer (repair technician)
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Study complaints
– Evaluating complaints to learn about product failures or service
problems
– Approximately one out of 25 customers complains!!
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Monitor the Internet
– Monitoring discussion forums to obtain valuable insights
Slide 5.11
Tools for Classifying Customer
Requirements
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Affinity diagram (p.191)
– Used to organize large numbers of ideas or
facts into natural patterns or groupings
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Tree diagram (p. 192)
– Shows hierarchical structure of facts and
ideas
– Used in designing implementation plans for
projects
Slide 5.12
Tools for Classifying Customer
Requirements cont…
Affinity diagram
Slide 5.13
Tree diagram
Customer Relationship
Management
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Excellent customer relationship
management depends on four aspects
1.
Commitments to customers
»
2.
Customer-focused service standards
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3.
Responding to a customer’s call within two hours
Training and empowerment
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4.
Job orientation, on-the-job training, & job certification
Effective complaint management
»
Slide 5.14
Zaring Homes promises that homes will be built on-time, within
budget, & within specification or the home is free
Employees at Ritz-Carlton can spend up to $2000 to resolve a
complaint with no questions asked
Measuring Customer
Satisfaction
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Measurement of customer
satisfaction allow a business to:
– Discover customer perceptions of business
effectiveness
– Compare company’s performance relative to
competitors
– Identify areas for improvement
– Track trends to determine if changes result in
improvements
Slide 5.15
Performance-Importance
Comparison
Importance
Low
High
Who cares?
Overkill
Vulnerable
Strength
Low
High
Performance
Slide 5.16
Transfer of Learning Questions
Describe the importance of
customer satisfaction
Answer - to satisfy its customers, achieve higher
customer satisfaction than its competitors, retain
customers in the long run, & to gain market share
Name the U.S. index used for
measuring customer satisfaction
Answer – American Customer Satisfaction Index (ACSI)
Transfer of Learning Questions cont…
Identify one dimension of service
quality
Answer – Reliability, Tangible, Empathy, Responsiveness
Name two ways to gather customer
information
Answer – comment cards, focus groups, direct customer
contact, field intelligence, study complaints, internet
monitoring