Understanding the Voice of Customer at LaRosas Pizzerias Case Study

LaRosa History: An Italian flavor pizza restaurant that founded in 1954 by Buddy LaRosa who used his Aunt Denas pizza recipe. It became a chain of pizzerias with 64 stores (2010) located in Cincinnati, Ohio, Northern Kentucky, and Southeast Indiana. February 27, 2008, Michael Larosa became CEO of LaRosa's, Inc. T.D. Hughes (CEO, LaRosa's 1990-2007) remains the Chairman of the Board. Offers full service (dine- in, carry-out, home delivery). Holds 45% to 50% share in its market area; competing with Pizza Hut, Papa Johns, Unos, and other local restaurants. 1997 LaRosa adopted a growth strategy with no results for three years due to the lack of sound factual data. In 2000 LaRosa formed a project team led by the marketing director to give their recommendation for an Italian Pizzeria concept that meets customers needs and expectations. LaRosa using Voice of Customers (VOC) to collect data: The VOC is a process that depends on asking customers to express their needs, desires, preferences, emotions and expectations through their experiences. LaRosa conducted 16 in-depth, one-on-one interviews with current and potential customers both inside and outside of their current market area. The goal was to get examples of dining incidents that customers had experienced the good, the bad, and the ugly. 1

Case Questions
Q1) How does VOC differ from other forms of market research into customer needs and expectation? What advantages and possible disadvantages does it have? VOC is a structured methodology for listening to customers that is promoted by the center for quality of management (CQM), an industrial association based in Boston. The basis for VOC is asking customer to express their needs and expectations through their experiences. For example: VOC was the key tool that successfully led LaRosa to understand its customers needs and wants which reflected in a new innovative restaurant design. Voice of the customer is the art of determining why, discovering root needs and guiding companies to develop or enhance characteristics, for products or services. Hundreds of words/phases coming directly from customers (call/mail or customer satisfaction (CSAT) surveys) are analyzed and linked to the structured data / metrics to find unique insight that can reveal the why of customer behavior. The Voice of Customer can be conducted through various information collection tools such as: comment cards, questioners, focus groups, toll-free telephone lines, customer visits, customer interviews and in-depth discussions with customers which allow business to uncover and develop a thorough list of customer wants, needs and expectations for a particular product or service including those that are unstated / unspoken. As VOC focuses on listening to the exact needs of customers; market research on the other hand provides important information to identify and analyze the market needs, size and competition. Hence, it facilitates organization in developing clear and justifiable data that directs product development. Meanwhile, market research provides a broader picture of the market through examining the political, social, economical, and technological aspects that the organization needs in initiating new strategies.

In the case of formulating LaRosas growth strategy for instance, the management had to use the market research to identify the market size, demands, and competitors it wanted to adventure. However, the team had failed to identify the proper growth strategy due to the lack of fact-based foundation for the decision in terms of the real needs and expectations of customers. Advantages of using VOC based on LaRosas case: VOC gives accurate information based on customers experiences and expectations. Reveals customers behavior (the why) towards organizations products or services. It enables the organization to fulfill customers needs and wants and expectations. It forms the foundation for organizations decision making (for example: After the implementation of VOC LaRosa was able to agree on a growth strategy that had eluded them for three years). It minimized the risks associated with formulating and implementing strategies that do not accommodate customers needs and preferences. Disadvantages: Time consuming. High costs. Requires expert personnel to design a customer interview plan and questions that has the depth and breadth to completely frame the opportunity, considerable skills in interviewing and listening as well as analyzing the data to yield outstanding results from the data collected. Professional team needs to be assigned to conduct the VOC (For example in the case of LaRosa the team included: marketing director, Executive vice president, director of operations, franchise owners, External strategic partner, CEO).

Q 2) What impact did the VOC process have for LaRosas? It was a challenge for LaRosa to translate the customer voices into actionable terms. Nevertheless, VOC enabled LaRosa to discover the latent need1 of the customers. It had a very good impact on LaRosa from two perspectives: 1) LaRosas management process: The companys focus change from product out to a market in mentality. This is one of the Kaizen seven key concepts which explain that instead of pushing products into the market and hoping customers will buy them, ask potential customers what they need / want and develop products that meet these needs and wants. Through VOC, LaRosa understood the customers saying that restaurant design should consider diverse comfort needs of all guests, that it provide a facility that customers implicitly trust, that customers feel cared for by service staff, and that restroom cleanliness affirms guests trust in restaurant cleanliness. As a result, in analyzing all the responses gathered, the company was able to prioritize the most important customer requirements: (i) (ii) (iii) (iv) (v)
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Assurance that the kitchen is clean (which is reflected by the cleanliness of the restrooms); Prompt service; Food and drinks at proper temperature; Fresh food; Meeting the unique needs of adult guests as well as families,

A latent need is one that has never been expressed or even identified by customers. Latent needs are what provide

opportunities for creativity and innovation, for surprising customers.

(vi) (vii) (viii)

Exceeding service expectations; An easy-to-read and understand menu; and Caring staff.

This led LaRosa to accurately translate these needs into a new restaurant design concept that clearly addresses the voice of customers. LaRosa developed a larger waiting area, casual bar, family dining areas, table and booth seating and a private dining area for parties. It also included improved kids program highlighted by Luigis Close, small area which children can select a toy or activity to keep busy and crackers to eat while waiting for dinner.

Broke down communication silos2 (vertical) within the company. Eliminated the age-old sales and marketing versus operations conflict. Facilitate the decision making process (for example: they agreed on a growth strategy).

1) LaRosas business: The new restaurant becomes second in sales behind LaRosas flagship location. The dining room check average3 increased to 25% higher than the market average. It recorded higher profitability than the chain average. Secret shopper satisfaction results showed that the new restaurant is performing at the top of the chain. Q 3) Conduct a mock VOC for your school or college, what did you learn? List of questionnaires for interviews: 1) What was the first impression you had when you came to GSM? 2) Did the GSM meet your expectations (If no, please explain why)?
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Information Silo: (i) It is a vertical communication (management to employees). (ii) The inability to share or exchange

information with other related systems such as customers, vendors or business partners within the organization. (iii) Managers serve as information gatekeepers, making timely coordination and communication among departments difficult to achieve.
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The average amount each guest spends in a restaurant.

3) How do you find the services provided by GSM (Staff, facilities, etc), give examples from your own experience? 4) What do you think of the cleanliness (Resource Room, Musallah, lab, restrooms & the pantry)? 5) What changes would you like to see in the GSM? 6) Would you recommend GSM to other people? Interview Analysis The group that been interviewed were: Malaysians and International (14 students) MBA (5 students) & MOM (9 students) Males (7 students) & Females (7 students) Still studying (11) & completed their studies (3)

From the interview, most of the students have a good impression towards GSM at the beginning. They felt that GSM has a decorative building, good facilities, organized and clean areas. Similarly, Lecturers are approachable and close to students. Their perception was that they have joined a high quality school which has excellent educational system which is based on the Islamization of knowledge. The schools environment features diversity that gave the opportunity for students to interact with many foreign students with various backgrounds and cultures, compared to other universities. At the end of the interview most of them said that they would recommend GSM to other potential students. However, based on the students experiences, the comments revealed unsatisfactory service that GSM needs to address. Below are the details of the comments: 6

GSM staff Unfriendly. Not helpful. The front desk personnel ask a lot of questions before she allows the students to enter the office to meet the lecturers/staff in an interrogative manner that sometimes annoyed the students although she has no authority to do so. Academic executive (MBA) who is always busy due to work overload. Staff that does not take the initiative to clarify things/procedures to students from the beginning i.e. pre-requisite courses that need to be signed up, how to add and drop. GSM facilities Resources room does not reflect its name; it is more to be a discussion room (No resources that students can use, reading materials are obsolete which most of them are donated by students). Class rooms that are not up to the standard except for AMBANK 1&2. Some of the PC in the Resource room and the lab are not connected to the internet and do not have windows software. Most of the electricity plugs at the Resource room are not working. The air condition at the Resource room is not functioning after 7:00 pm and during holidays. The registration of wireless internet for students laptops is complicated whereby students will need to go the IT division and do it on their own. The procedure takes more than one day depending on the availability of IT persons. GSM cleanliness The females restroom is smelly all the time. Pantry is not clean and not organized; if you open the cabinet you can see how things are messy; the same goes for the fridge. Usually it is clean in the morning but things change in the evening. GSM Service in general: 7

Ineffective information sharing system; GSM students feel isolated from IIUM activities especially seminars, talks, conferences, supporting classes organized by other departments (SLEU, PGIIUM);

Based on the students experience, the registration day was not well-organized, no proper signage to lead students to finish the registration procedure. Lack of hospitality by the staff and information was not well disseminated during the registration. In addition, students are neither familiar nor knowledgeable as to how to register, add or drop subjects online.

GSM Lectures/Lecturers Some lectures are too academic and theoretical, lack of hands-on approach. Students expect lecturers to treat them as professionals, open-minded and able to accept opinions. Recommendations: 1. Staff needs to be more customer-oriented (training on customer service). 2. Maintenance for all facilities (PCs, Electricity plugs, etc) should be part of GSM regular activities to make sure those things are working well. 3. More supervision in term of cleanness of the pantry, restrooms. Can implement the 5s: i. ii. iii. iv. v. Seiri straighten up Seiton put things in order Seiso clean up Seiketsu personal cleanliness Shitsuke - discipline

4. Improve the infrastructure of other classroom, ergonomics chairs and tables, properly maintained air-condition and projectors provide anti-virus for computers. 5. GSM should provide photocopy machine at the resource room or lab, using coins similar to the library. Students need such facilities because photocopy shops will be closed in the evening. 6. GSM should introduce new system of printing in the computer lab. At the moment, 8

students need to go down the counter to ask the staff to replenish the papers and to top up their accounts. There should be self-service system that is more accessible for students to use, i.e. GSM can introduce printers that use coins lots or card reader. 7. The resource room should reflect the name i.e. by providing reading materials such as the International Herald Tribune, the Dow Jones, News Week, Times, Journals etc. 8. GSM needs to improve the communication channels with other department in IIUM so students can be aware of the events, conferences, activities that happen in the IIUM. 9. GSM may not depend only on the academic way; it should invite practitioners from the industry to give talks and share their experiences on regular basis. For example, how to do project budgeting in real life situation at workplace so that students can benefit from their experience. 10. GSM needs to organize some activities that help students know each other closer. 11. GSM needs to facilitate many of the procedures that seems simple but still for some students is a problem (e.g. adding to Yahoo group, add and drop subjects) 12. GSM can implement a system one stop centre for everything during the registration. It needs to pull all the resources from various departments during the registration, i.e. Library for library card and IT personnel to activate students wireless connectivity for their laptops. 13. GSM should include the orientation day an activity not just talks telling about the university and facilities provided. Students will familiarize with the university and that can develop a sense of belonging/loyalty/ownership when studying in IIUM. 14. It is a good idea if GSM does not have enough staff and resources to have student representatives who can be the assistance and mediator between the GSM and students. 15. GSM should form synergy with private sectors continuously, build relationship to get sponsors and placement of internship for students.

Islamic perspective
The prophet said: God loves from a worker that, if he has to do a job, he does it perfectly. '' By time; Verily Man is in a loss; Except those who have faith, do good deeds, encourage one 9

another to the truth and encourage one another to be patient. (Quran, 103:1-3). This includes: A) There is no time to waste. B) Performing righteous deeds (minimizing mistakes) C) Continuously changing things for the better (continuous improvement).

Conclusion
From the case, VOC is a powerful tool. It is collective insight into customer needs, wants, perceptions and preferences gained through direct and indirect questioning. These discoveries are translated into meaningful objectives that help in closing the gap between customers expectations and the companys / organizations offerings

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