Voice of the Customer (VOC)

Management
Dr. Manu K. Vora, ASQ CQE and Fellow
Advisor of Eminence, Business Excellence, ASQ India
Chairman and President, Business Excellence, Inc., USA
ASQ LES Series Topic 9, 23 April, 2015

Outline

Customer Satisfaction & Economic

Justification - Why

Customer Satisfaction Management

Principles - What

Customer Delight: - How

Voice of the Customer (VOC)

World-Class Customer Service

Best-in-Class Examples

Economic Justification
Study of 22 companies who received a Site
Visit or won the Baldrige Award (1988-1991):
Improved customer satisfaction
Improved employee satisfaction
Improved operational parameters
Enhanced financial performance
Reference: US General Accounting Office study (GAO NSIAD 91-190, May 1991).

Customer Satisfaction Results

Parameter
Overall
Customer
Satisfaction
Customer
Complaints
Customer
Retention

Average Annual Favorable Unfavorable

No
% Improvement Indicator Indicator Change
2.5
12
0
2

(11.6)

1.0

Total 17 companies responded.

Reference: GAO NSIAD 91-190, May 1991. Total 22 companies responded.

Enhanced Financial Performance Results

Parameter

Market Share
Sales per
Employee
Return on Assets
Return on Sales

Average
Favorable Unfavorable No
Annual %
Indicator Indicator Change
Improvement
13.7
9
2
0
8.6
0
0
12
1.3
0.4

7
6

Total 15 companies responded.

2
2

0
0

Management of Critical Voices

Delighted
Customers
(VOC)

VOE -Voice of the

Employee

Excited
Employees
(VOE)

VOC - Voice of
the Customer

VOP - Voice of
the Process

Improved
Processes
(VOP)

Operational Performance
Financial Performance

Customer-Supplier Relationship

Output

Input
Supplier

Requirements
& Feedback

Process

Customer

Requirements
& Feedback

Source: AT&T PQMI, Issue 1.1, 1988.

The KANO Model of Customer Satisfaction

Baldrige Criteria Framework:

A Systems Perspective (2015-2016)

ISO 9001:2015 Standards

C
U
S
T
O
M
E
R
R
E
Q.

Focus on Continual Improvement

of the Quality Management
System
Management
responsibility

Measurement
analysis &
improvement

Resource
management

Input

Product
realization

10

Output

C
U
S
T
O
M
E
R
S
A
T.

Balanced Scorecard Indicators

CURRENT
Customer

LAGGING
Financial

Vision &
Strategy

LEADING
Process

11

LEADING
Employee

Voice of the Customer (VOC)

Voice

of the Customer (VOC) is a

comprehensive Systems Approach to
effectively manage customer needs and
expectations.
It requires systematically listening to
multiple customer voices, analyzing,
prioritizing and then responding to
customer issues.

12

VOC Model
Capture
Analyze

Verify
Respond

13

13

How of VOC: Capture

(What are our customers saying?)

Annual perception surveys (mail, telephone, web based,

personal interview)
Customer generated Report Cards (specific to a customer)
Immediate feedback surveys (post-event surveys)
Customer Forums (target market segmented, by issues)
Executive Visits with Customers
On-Site Customer Visits
Focus Groups (qualitative research)
Internal data base of Customer Complaints from the Field
Trade Association Events competitive information
Trade Journals competitive information
Industry Specific Reports by a Third-Party
14

Problems with Current Customer Satisfaction System

Does too little, too late

Doesnt include information about competitors
Doesnt focus on important customers (gold clients)
Doesnt match the depth of the tool to the sophistication
of customers
Is designed at too low level in the organization
Fails to see that you are managing perception while you
are measuring it
Doesnt take pricing into account
Doesnt test the tools before deploying them
Settles for too small a response rate
Source: Sheila Kessler, Measuring and Managing Customer Satisfaction, 1996.

15

Customer Survey
Product - features, functions
Delivery - reliability, accuracy
Service - staff know-how, courtesy,
responsiveness

Value - benefit received

Overall - repurchase, recommendation
Competition - best other alternative

16

How of VOC: Analyze

(What did we hear?)
Trend

Analysis year over year

High and Low Scores
Satisfiers and Dissatisfiers
Competitive Information
Integration, Prioritization and Consensus
Top 2-3 Focus Areas (VOC Projects) by
Market Segment
Focus by Top Customers (Revenue, Growth,
Emerging Sector, etc.)
17

Importance Weights

The Quadrant Chart

Focus on an
Opportunity

Keep Up the Good

Work

(Must Improve)

(Hold the Gains)

Low Importance
Low Priority
(Maintain Current
Status)

Possible Oversupply
(Reassign Resources)

Satisfaction Ratings
Source: Terry G. Vavra, Quality Progress, Vol. 35, No. 5, 69-75, 2002.

18

How of VOC: Respond

(What are we doing?)

Use of Policy Deployment to Set Objectives

for VOC Projects
Use Quality Improvement/Problem Solving
method (e.g., Quality Improvement Story)
Perform Root Cause Analysis (why? why? why?)
Develop Key Countermeasures (solutions)
Implement Countermeasures
Make Solutions Permanent
Use Project Management approach to Monitor
Progress
Address Product, Process, & Service
Improvements
19

How of VOC: Verify

(What do we tell our customers?)
Use

new scores to validate progress

of VOC Projects
Share VOC Project Results to
Internal and External Customers
Continuous dialogue with customers
Celebrate VOC Project success

20

Key VOC Metrics

Customer

Satisfaction Average (CSA) Own

Company Score
Ratio of Own Company/Best Other Vendor Score
= CVA (Customer Value Added):
CVA = 1.0 Parity
CVA > 1.0 Better than Competition
CVA <1.0 Worse than Competition
Multiple years trend analysis of CSA & CVA
Number of Satisfier and Dissatisfier Comments

21

Satisfied and Dissatisfied Customers

Satisfied customers may tell 4-6 other people; they are very
forgiving.
96% of all dissatisfied customers wont ever complain.
90% of dissatisfied customers wont be back to buy from you they will tell at least 9 other people.
10% will tell 20 or more other people how poorly they were
treated.
Cost of acquiring a new customer is much higher than retaining
the same customer (5-7 times more).
When people act as citizens, they vote with their ballots.
When people act as customers, they vote with their feet and
wallet.

22

Customer Service Some Examples

Bad Customer Service (2.20 min.):
http://www.youtube.com/watch?v=bTbHwnxCGaI

Ultimate Customer Service (3.43 min):

http://www.youtube.com/watch?v=8T54rQrMleA

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15 Keys to World-Class Customer Service

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.

Your only excuse for being in business is to satisfy your customers.

You sell value - or you dont sell anything at all!
Customer define value in their own terms.
If anything happens after the sale, the customer hasnt gotten the value.
Dissatisfied customers arent problems; they are golden opportunities.
The really demanding customers are platinum opportunities.
Focus on saving the customer, not on saving the sale.
There is no compromise for customer satisfaction and loyalty.
Treat your frontline people well, so they treat your customers well.
Give your customers a reason to give you honest comments.
To satisfy an unhappy customer, you must add extra value.
Always treat a customer as if he/she will remain a customer.
Always provide a dissatisfied customer a positive reason to deal with you.
Your processes must support the creation of customer satisfaction and loyalty.
Consistently satisfy your customers.
Source: Clay Carr, Front-Line Customer Service, 1990.

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Customer Focus Some Baldrige Winner Examples

Eastman Chemical Company (1993 Baldrige,

Manufacturing):
From 1989-1993, 100% shipping reliability.
From 1986-1991, rated outstanding on product quality,
product uniformity, supplier integrity, correct delivery,
and reliability by customers.
Federal Express Corporation (1990 Baldrige, Service):
100% service standard, 12-component index (Service
Quality Indicator).

25

Customer Focus

IBM Rochester (1990 Baldrige, Manufacturing):

Since receiving the Baldrige Award in 1990, customer
satisfaction surveys have shown that satisfaction with
Rochesters AS/400 has increased by more than 10
points; in addition, these surveys demonstrate a 97%
customer loyalty rating.
The Ritz-Carlton Hotel Company, L.L.C, (1992 & 1999
Baldrige, Service): 75% of its customers would not use a
competitor regardless of the offer.

26

Customer Focus
City of Coral Springs (2007 Baldrige, Non-Profit):

Resident Satisfaction 94%

Business Customer Satisfaction 96%
Schools Earning A Grade 86%
Triple A Bond Rating

27

MESA Products, Inc.: Customer Focus

2006 Small Business
Customer complaint process

Internal/external
Major/minor
Tracked/segmented/analyzed
Follow-up
28

Cycle-Time Reduction for ASQ Exam Result Notification Interval

8000

14
13
6500

6302
6000

10
5400
5000

Weeks Promised

8
4200

7
3800
6

4000

3400
3000
2600

3000

5
4

2196

2000
3

1000

0
Dec-88

Jun-89

Dec-89

Jun-90

Dec-90

Jun-91

Month/Year
29

Dec-91

Jun-92

Dec-92

Jun-93

No. of people who took Exams

11

Weeks of Result Notification

7000

6900

12

Major References
AT&T (1988), Process Quality Management & Improvement Guidelines, Issue 1.1.
Baldrige Performance Excellence Program (2015-2016,) Criteria for Performance Excellence, US NIST, Gaithersburg, MD.
http://www.nist.gov/
Carlzon J. (1989), Moments of Truth, Harper Collins, New York, NY.
Carr C. (1990), Front-Line Customer Service - 15 Keys to Customer Satisfaction, John Wiley & Sons, New York, NY.
Goodman J., DePalma D., & Broetsmann S. (1996), Maximizing the Value of Customer Feedback, ASQ Quality Progress,
December issue.
Hayes R. E. (1998), Measuring Customer Satisfaction, ASQ Quality Press, Milwaukee, WI.
Kano, N., Seraku, N., Takahashi, F. & Tsuji, S. (1996), Attractive Quality and Must-be Quality, In the Best on Quality,
John D. Hromi, Editor, Vol. 7, Book Series of the International Academy for Quality, ASQ Quality Press, Milwaukee, WI.
Kaplan R. S. & Norton D. P. (1996), The Balanced Scorecard, Harvard Business School Press, Boston, MA.
Kessler S. (1996), Measuring and Managing Customer Satisfaction: Going for the Gold, ASQ Quality Press, Milwaukee, WI.
Liebesman, S. (2002), Add Value to ISO 9001:2000 Audits, Quality Progress, pp. 104-106, May issue.
US General Accounting Office Study (1991), Management Practices: U.S. Companies Improve Performance Through Quality
Efforts (GAO NSIAD 91-190), May.
Vavra, T. G. (2002), ISO 9000:2000 And Customer Satisfaction, Quality Progress, Vol. 35, No. 5, pp. 69-75, May.
Vora, M. K. (2005), Voice Of the Customer (VOC) Management, Invited Keynote Address at the Costa Rica Quality Conference,
San Jose, Costa Rica, March 15.
Vora, M. K. (2003), Global Quality Management without Boundaries, Invited Guest Editorial, Zairi, M. (Ed.), The TQM Magazine,
Vol. 13, No. 2, pp. 69-70, March.
Vora, M. K. (2002), Business Excellence through Quality Management, Total Quality Management, Vol. 13, No. 8, pp. 1151-1159,
December.
Vora, M. K. (2002), Creating Customer Value through Voice of the Customer Management, 7th World Congress for TQM,
Proceedings, Vol. 2, pp. 73-81, Verona, Italy, June 27.
Vora M. K., Harthun S. & Kingen R. (1993), ASQC Certification Committee Practices What It Preaches, Quality Progress, pp. 99103, November issue

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Thanks
Questions?