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CHAPTER 7

CUSTOMER FOCUS
AND
SATISFACTION

TQM in Pakistan
Acknowledgement by the customer in
the from of Letter Published in Daily
Dawn on Thursday, September 27, 2007

Amazing experience
I 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 when your patient would be released from
hospital.
The attendants are always asking one question or the other regarding different
things concerning the patient. Recently one of my sisters was operated upon by Dr
Kishwer Nazli in Fatima Hospital in 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. I wish other hospitals can also follow the same standard.
DILAWAR HUSAIN

The Baldrige Criteria of Customer


Satisfaction
7.0 Customer Focus and Satisfaction

300

7.1

Customer expectation: current and future

35

7.2

Customer relationship management

65

7.3

Commitment to customer

15

7.4

Customer satisfaction determination

30

7.5

Customer satisfaction results

85

7.6

Customer satisfaction comparison

70

Who is the customer?


There are two types of customer: External and Internal
External Customer
Direct purchaser
Influencer

Current, prospective, and lost customers

Internal Customer (Functions supporting each other)


Engineering
Production
Order processing
Etc.

Customer Supplier Chain

Inputs from
External
Customers

Internal
Customers

Outputs
To
External
Customers

Characteristics of external customer

An 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.
2.
3.

Current customers
Prospective customers, and
Lost customer

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.

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.

Customer Satisfaction: Three Parts System


Customer
Expectations

Human Resource
Management

Company Operations
(Processes)

Customer
Satisfaction

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.

Customer CareFront-Line People

Customers are the most valuable assets of any


company and should not be referred to 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.

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.

Translating Needs into Requirements: Kano Model

There are three areas of customer needs or


requirements of customers:

1.

Spoken or expected requirements of customers

2.

Innovative products or services requirements.

3.

Unstated and unspoken requirements

Kano presented these requirements in a graphical


form.

Kano Model
Customer Satisfied
Easily identified
Typically
performance related

Exciters
Quickly become expected
Innovation

Spoken and expected


requirements

Requirements

Requirements

Not satisfied

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

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.

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.

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.

These are shown in the curve in the lower right corner of

the figure.

The customer may indeed be unaware of these

requirements, or may assume that such requirements


will be automatically supplied.

These implied requirements are the hardest to define but

prove very costly if ignored.

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.

Voice of the customer


How is the voice of the customer heard?

Who is the customer?

Customer reports
NBA

Design reviews

Surveys

Internal
External

Interviews

Focus groups

Site visits

For listening

Clarify verbatim
Affinity diagrams
QFD

For listening

Voice
of the
customer
For evaluating

IPD Team meetings

How is the voice of the customer evaluated?

Who has what responsibilities?

The Driver of Customer Satisfaction

If you cannot measure it, you cannot manage it.


This time-tested adage certainly applies to the
management 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.

Customer can be approached by surveys.


There, however, are certain pitfalls in the
methodology:

Mailed questionnaires lose control over who

respond
Customers are less likely to respond if they are
dissatisfied

Getting Employee Input

Employees 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.

In 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 processes
The outcomes of training programs
Needs of internal customers

Measurement of Customer Satisfaction

There are two basic steps in measurement system:


1. Develop key indicators that drive customer satisfaction
2. Collect data regarding perception of quality received by
customers

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

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.
The one thing which is proven as result of various studies is the relationship between
customer retention and profit.
The system for improving customer retention and profitability has following components:

Internal Service Quality, which established and reinforces a climate and organization
culture directed towards quality.
Employee retention, which is achieved through good human resources management
practices and organization development methods such as teams, job development, and
empowerment. Employee retention 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 infrastructure.
Customer Satisfaction and follow up, in order to reduce customer defections and
improve retention and profit.

Customer Retention and Profitability

System
Internal
Service
Quality

Employee
Satisfaction

Employee
Retention

Driver
External
Service
Quality

Customer
Satisfaction

Customer
Retention

Profit

Buyer Supplier Relationship

Almost every company purchases products, supplies, or services in


an amount that frequently equals around 50% of its sales

Traditionally many of companies follow lowest bidder practices


where price is critical criterion.

Now companies are realizing that careful concentration of


purchases, together with long term buyer-supplier relationship, will
reduce costs and improve profits.

Deming realizes this and suggested that a long-term relationship


between purchasers and suppliers is necessary for best economy.

Buyer Supplier Relationship


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

Implementation of TQM by both supplier and customer.


Long-term commitment to TQM and to the partnering relationship
between the parties.

Reduction is supplier base.


Get suppliers involved in the early stages of research,
development, and design.

Benchmarking

END OF
CHAPTER 7