CUSTOMER SATISFACTION and RETENTION LECTURE (7) CUSTOMER SATISFACTION and RETENTION

Major Topics Understanding Who Is Customer Understanding Customer Defined Quality Identifying External Customer Needs Identifying Internal Customer Needs Customer Satisfaction

Understanding Who Is Customer In total quality setting, customer defined quality (external customers) and employees produce it (internal customers) A Customer as anyone who is affected by the product or process. Three categories of customers the emerge : External customers; Internal customers; Supplier as customers.

Understanding Customer Defined Quality In a total quality, quality is defined by the customer The customer must be the organization’s top priority. The organization’s survival depends on the customer Reliable customers are the most important customers Customer satisfaction is ensured by producing high quality products

Identifying External Customer Needs Take action As indicated Check the Validity of your conclusions Analyze the Results Scholtes’s Six Step Strategy for Identifying Customer Needs Observation; Capturing data; Reflection and analysis; Brainstorming for solution; Developing prototypes of possible solution Gather the information Plan how to gather The information Speculate About the results

Identifying Internal Customer Needs Identifying the needs of internal customers is a matter of ensuring that employees who depend on one another as individuals, as well as departments that depend on each other as units, communicate their needs to one another continually

Customer Satisfaction Why Measure Customer Satisfaction? Customer Value Design and Use of CSM Program Are You Customers Completely Satisfied?

Why Measure CS? The average business losses between 10%-30% of its customers each year, often without knowing : Which customer they have lost? Where they were lost? Why there were lost? How much sales and profit customer decay has cost them?

Customer Value Your customer’s perception of the value of your company provides is based on the following attributes foundation : Organizational Product Service Future Behavior

Design and Use a CSM Program Defining the objectives Develop the research design Identify the attributes Questionnaire design Designing the sample plan Pre-test the CSM Program Analyzing the data Using the data Benchmarking Benefits of using satisfaction surveys

Defining the Objectives Any road will do if you don’t know where you want to go Identify customer’s priorities Learn customer’s tolerance band Receive first-hand input on your company’s performance Obtain performance rating relative to your customer’s priorities

Develop the Research Design Research design is a fundamental part of the CSM process Research design flow directly from the stated objectives Must be developed to ensure reliability Ability to provide consistent results Measure the original intent Eliminates bias

Questionnaire Design Accurate identification of attributes that are important to the customer is the foundation upon which all sub-sequent portion of the CSM program must be built Product attributes Service attributes Organizational attributes Future behavior attributes

Designing the Sample Plan Sampling is a highly visible element of research design Pre-tests are essential. Do not minimize! They validate: Questionnaire Sampling Data Analysis

Benefit of Satisfaction Surveys Improve customer, client or employee, loyalty React quickly the changes in the market Identify and capitalize on opportunities Beat the competition Retain or market share Increase revenue Reduce cost

Quality TIP “ Profit in business comes from repeat customers, customers that boast about your product and service, and that bring friends with them. Fully allocated costs may well show that the profit in a transaction with a customer that comes back voluntarily may be 10 times the profit realized from a customer that respond to advertising and other persuasions” Source : W. Edwards Deming (1991)