Moments of Truth - Information into Insight

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www.clear-point.net
©2006 Incom Strategic Inc.
1
The Take Away: Look at /act on your products through your customers’
eyes – don’t look at your customers through your products’ eyes
•At the strategic level VoC is more than customer satisfaction
•VoC should measure Customer Needs, Values and Expectations
•VoC should NOT be focused exclusively on product/service
satisfaction
•If there is misalignment between customer expectations and
product offerings, you will experience weaker customer
commitment
•VoC can identify the needs, Six Sigma can help improve the
alignment
www.clear-point.net
©2006 Incom Strategic Inc.
2
Voice of the Customer and Six Sigma
Bu
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t:
W
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en
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Co
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The penalty for misalignment: short customer
lifetime, increased churn, lower average
revenue
Cu
The reward for alignment: long term customer
commitment
Product/Service Alignment
Used effectively, Six Sigma aligns/designs
business processes with the Voice of the
Customer.
y
Voice of the Customer is about measuring the
customers’ needs, values and expectations.
Customer:
Needs
Values
Expectations
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©2006 Incom Strategic Inc.
3
Customer
Needs/Values/Expectations:
Customer Satisfaction:
Asks the question how do
you like me?
Asks the question what’s
important to you?
The strategic bridge: how well
are we doing at what’s
important to you?
The strategic priority: close
the gap between what’s
important to your customers
and your performance
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The strategic link:
identifies the alignment
between customer needs
and product offering
Alignment between
customer needs and
performance should drive
Six Sigma Project
Definition
©2006 Incom Strategic Inc.
4
There is a hierarchy of Moments of Truth
"Anytime a customer comes into contact with any aspect of a
business, that is highly important and/or valued emotionally, is
simultaneously high risk/high return"
In terms of commitment, they are either moments of truth OR
moments of misery.
Your organization’s ability to detect these moments perform
against them determines truth or misery – commitment or
defection.
Examples:
-billing errors
-statement errors
-support errors
www.clear-point.net
©2006 Incom Strategic Inc.
5
Moments of Truth:
Jan Carlzon, the former president of Scandinavian Airlines wrote a book, Moments of Truth. In his book,
Carlzon defines the moment of truth in business as this:
"Anytime a customer comes into contact with any aspect of a business, however remote, is an opportunity
to form an impression."
Some examples of moments of truth in Jan Carlzon's airline business are:
•when you call to make a reservation to take a flight,
•when you arrive at the airport and check your bags curbside,
•when you go inside and pick up your ticket at the ticket counter,
•when you are greeted at the gate,
•when you are taken care of by the flight attendants onboard the aircraft, and
•when you are greeted at your destination.
The Key Issue: Your organization’s performance on Moments of Truth
drive your customers commitment.
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©2006 Incom Strategic Inc.
6
Moments of Virtue (MOV)
Moments of Misery (MOM)
Interactions that are highly
valued by your customers
AND your performance meets
or exceeds their expectations.
Interactions that are highly
valued by your customers
AND your performance fails
to meet expectations and/or
creates frustration.
The reward: spike in
willingness to buy more.
Example: insurance claim
processing
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The penalty: customer
alienation, defection.
Example: insurance claim
processing
©2006 Incom Strategic Inc.
7
Why should you measure in terms VoC/Customer
Commitment?
Shift and Drift are constants in today’s marketplace.
•Consumers, both b2b & b2c, are more open to new ways to meeting their needs
•Technology, internet, increased information and the means to communicate are leading to more
informed consumers
•More informed consumers are leading to a greater willingness to exercise choice
•Churn among customers is rising
•The leading causes of churn? A single Moment of Misery!
Examples of Innovations Leading to a Shift in the Marketplace:
Advertising: Google vs. Yahoo
Automotive Retailing: BMW
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©2006 Incom Strategic Inc.
8
What should you measure VoC? – The Art and the
Science
The Art: Who is the best at meeting the needs of customers?
What needs are they meeting?
Moments of Truth/Moments of Misery:
What does the customer value?
What does the customer need?
How does your organization perform?
Touchpoints: What are the ways your organization meets your customers values?
-products/services
-support
-marketing
-sales
Who are your most profitable segments/populations?
--how much of their needs are you meeting?
-how much of their lifetime needs are you meeting?
The Science: Surveys and Segmentation
If you could meet more of their needs for more of their life, you would be very profitable.
How’s the alignment between your organization and your customers?
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©2006 Incom Strategic Inc.
9
Case: UPS of America and Toshiba Laptops
Original Scenario:
•Toshiba laptop owners put a lot of value in their uptime with a computer
•Hardware failures were a major Moment of Misery
•Most customers experiencing hardware failures were losing access to their laptop for up to 11
days
•Most of the 11 days was consumed by the shipping/repair/shipping process
Improved Scenario
•UPS originally asked to reduce the shipping times
•UPS looked at the whole Moment of Misery
•Correctly identified that saving a few hours on the original pickup and the ultimate delivery would
bring marginal benefits
•Proposed a complete overhaul of the process
•In the U.S., qualified customers who experience a service failure now receive their repaired laptop
in 2 days
•Toshiba customers drop their laptop at UPS stores, it gets shipped to a UPS repair centre off the
runway at UPS’s Worldport facility by 11 pm, repaired by 1 am, back on a plane by 2 am, back in
the UPS store by 8:30 am.
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©2006 Incom Strategic Inc.
10
Case: An energy company wants to leverage its brand
and its relationship with customers by expanding its
service offering to home services.
•What’s the best approach?
•What are the potential Moments of Truth?
•What are the potential Moments of Misery?
•How do you validate these?
•How do you develop/align your current service offering
with the customer needs (i.e. excellent performance on
the Moments of Truth)
www.clear-point.net
©2006 Incom Strategic Inc.
11
DMAIC: Where should you measure VoC?
•At the Define and/or Pre-Define Stage
•At the Improve Stage: Test Your Service Improvements
•At the Control Stage: Be Sure Your Improvements are performing
effectively
VoC: Shift and Drift
•Whether you are in a B2C or B2B, the speed of shift and drift is
increasing at a rapid pace.
•Customer needs and values are moving at a faster rate than ever
before
•Stay ahead of these changes
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©2006 Incom Strategic Inc.
12
Applying VoC to Six Sigma
Commitment Continuum
•Think of USL’s and LSL’s as two ends
of the customer commitment
continuum
•The higher the customer commitment,
the greater share of their wallet your
organization will own; the lower the
commitment, the less you’ll own.
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©2006 Incom Strategic Inc.
Customer Spend
•The premise is that VoC defines the
Upper and Lower Spec limits for
services
Question
Marks
Stars
Dogs
Cash Cows
Customer Commitment
13
The Take Away
•While the Voice of the Customer (VoC) is critical to Six Sigma at the strategic,
project and design levels, its equally important that VoC is operationalized as
more than customer satisfaction
•To use VoC strategically, you must look at your service offering through your
customers eyes. Do NOT look at your customers through your service
offering’s eyes.
•Your ultimate goal is to identify and meet more of your customers needs, more
often and for a longer part of their lifetime.
•Your reward: significant improvement in customer lifetime revenue and
profitability because of customer commitment.
www.clear-point.net
©2006 Incom Strategic Inc.
14
Comments/Questions?
More info:
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©2006 Incom Strategic Inc.
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©2006 Incom Strategic Inc.
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