Creating customer orientation

Customer-driven quality
Identifying Customer
Internal and external customers
Creating satisfied customers
Customer-driven quality cycle
Customer Segmentation
Understand customer needs
Gathering and analyzing customer information
Measuring customer satisfaction
Customer-oriented practices
Customer satisfaction and loyalty
 Customer-driven Quality
• What is customer driven quality?
– ‘Quality is meeting/ exceeding customer expectations’
• Who is Customer/ Consumer?
• Who is external customer?
For example:

Paper Producer Book producer Student

• Who is internal customer? - employees

For example:
Front-line
Manager supervisor
staff
Creating Satisfied Customer
- Expected Quality
- Actual Quality
- Perceived Quality

Expected Quality
-What the customer assumes will be
received from the good or service.
-Q: What is the role of producer?
 Actual Quality
- The outcome of the process and what is
delivered to the market.
- Q: What should be expected by producer?

Perceived Quality
- Perception by comparing expectations
(expected quality) with actual quality.
- Q: What are the consequences?
- (Perceptions are not always accurate.)
Customer-Driven Quality Cycle
Customer needs and expectations
(expected quality)

Identification of customer needs

Translation into product/service specifications

(design quality)

Output (actual quality)

Customer perceptions (perceived quality)

measurement and feedback

PERCEIVED QUALITY is a comparison of ACTUAL
QUALITY to EXPECTED QUALITY
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*Customer Segmentation
- Different requirements and expectations
- Cannot satisfy all customers with the same products
or services.
- Based on geography, demographic, volumes, etc
- Segmentation allows company to prioritise customer
groups.
 Understanding Customer Needs
Quality dimensions
(products & Services)
by David A. Garvin
Performance
- A product’s primary/ basic
operating characteristics. i.e:
handphone – speaker,
microphone, keypad
Features
- Additional function/ extras. (i.e:
handphone - camera, TV, GPS)
Reliability
-Probability of surviving over a
specified period . (i.e: Handphone
–Ability of surviving when fall off/
on Water)
Conformance
-Physical & performance match
pre-established standards. (i.e: A
handphone fit for use and free
from noises when listening to call
can reflect this dimension)
Durability
-The amount of use you can get
before it deteriorates/until
replacement is preferable (i.e:
Nokia 3310 is more durable than
the current hand phone in town)
Dimensions of service Classes of customer
quality requirements (Kano
Model)
Responsiveness Dissatisfiers:
- The ability to provide what was
promised Requirements that are
-i.e: Domino’s pizza – promise
to serve order within 15 expected in a
minutes, or a coupon of RM10 product/service.
will be given.
i.e: heater as a heater
Assurance- The knowledge,
courtesy and ability to convey trust
Reliability Satisfiers: Requirements
- Thewillingness to help customers
and provide prompt services that customers say they
want.
i.e: Pesona- GPS
Empathy Exciters/delighters
The degree of caring and individual Unexpected new or
attention provided to consumers
i.e: willingness to schedule delivery at innovative features
the customer’s convenience
Tangible
The appearance of personnel/the
physical facilities and equipment.
Gathering Customer Information
Key approaches in gathering customer
information (Listening posts):-
1. Comment Cards and Formal Surveys
2. Focus Groups
3. Direct Customer Contact
4. Field Intelligence
5. Complaint Analysis
6. Internet Monitoring
1. Comment Cards and Formal Surveys
-CC Type: A piece of card/form with simple
questions.
- Usually placed at a counter/inside the
room (hotel)
- Purpose: Measuring customer satisfaction.
- Limitation: Only few will respond and
respondents may not represent the typical
customer.
- FS: Design to sample a customer base.
- Characteristics: Clear questions, unbiased
questions, avoid long questions.
- Advantage of CC & FS: Easy ways to solicit
customer information.
 2. Focus Group
- A panel of individuals (customers/non
customers) who answer questions about a
company’s/competitors products & services
- Approach: Allows a company to select the
composition of panel
- Advantage: Direct voice of the customer
- Disadvantage: Higher cost of implementation
 3. Direct Customer Contact
 Approach: Top executives commonly visit
customers personally.
 Target: VIP and Loyal customers.
 Advantage: Firsthand information.

4. Field Intelligence
 Any employees who comes in direct contact with
customers (listen/observe/advice)
 Ex: Salespeople, technicians, receptionists can
obtain useful information from the customers.
 Advantage: Firsthand information, two-way
communication)

5. Complaint Analysis
 A key source of information
 Approach: Analyze the complaints received
via mail, telephone, media, etc
 Adv: future improvement, corrective actions
 Disadv: Some cases require further
investigations.

6. Internet Monitoring
 Use website/offer a forum for the customers to
discuss/voice out their opinions.
 Adv: Minimal cost
 Disadv: Unstructured and unfocused
conversations.
 Understand the linkages between v.o.c and
design, production and delivery processes.
- To minimize the potential gap between
expected and actual quality.
-(will be explained in detail in chapter: tools for
designing quality (GAP Analysis))
Measuring customer satisfaction
 How to design an effective satisfaction surveys
- Determine purpose of survey
- Include internal and external customers participation
- Identify who should conduct the survey
- Select the right survey instrument
- Design reporting format and data entry methods
Why customer satisfaction efforts fail and ways
to prevent it from occurring


 Reason: Poor measurement schemes.

 Ways: survey needs appropriate understanding of the statistical process
 Reason: Failure to identify appropriate quality dimensions.
 Ways: Capture reliable information about customer needs and expectations.
 Reason: Failure to weight dimensions appropriately.
 Ways: Use of techniques such as important-performance analysis to help
focus attention to the key dimensions.
 Reason: Lack of comparison with leading competitors.
 Ways: Get appropriate competitive data from the competitors, so they would
not improve faster than our organization.
 Reason: Failure to measure potential and former customers.
 Ways: Seek reasons why non-customer does not do business with a company
and why customer leaves.
 Reason: Confusing loyalty with satisfaction.
 Ways: Understand the differences between loyalty and satisfaction because it
provides an indication of organization’s future.

Customer-Oriented Practices – Leading practices

 The clearly define key customer groups and

markets, considering competitors and other
potential customers, and segment their
customers accordingly.
 They understand both near and long-term
customer needs and expectations (VOC) and
use systematic processes for listening and
learning from customers
 They understand linkages between the VOC
and design, production, and delivery process
 They build relationships with customers through
commitments that promote trust and confidence;
provide easy accessibility to people and information;
set effective service standards; train customer-
contact employees; and effectively follow-up on
products, services and transactions.
 They have effective complaint management
processes by which customers can easily comment,
complaint, and receive prompt response resolution
of their concerns.
 They measure customer satisfaction, compare the
results relative to competitors, and use the
information to evaluate and improve internal
processes.
Importance of Customer Satisfaction
and Loyalty
 “Satisfaction is an attitude; loyalty is a
behavior”
 Loyal customers spend more, are willing to
pay higher prices, refer new clients, and
are less costly to do business with.
 It costs five times more to find a new
customer than to keep an existing one
happy.
 A firm cannot create loyal customers
without first creating satisfied customers.

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How to create customer
satisfaction and loyalty
 Value of product
 Value of product to customers
 Example: Price/ time saving
 Services
 Consultancy
 Before-sales services. i.e: delivery time
 After-sales-services. i.e: warranties
 Competitive offerings
 Offer different products from competitors which has
different quality dimensions such as different features,
performance, durability, etc
 Relationships between organization and customers
 Establish relationship such as offer membership, etc
 Involve customer in decision-making such as through
effective complaint mechanism