A Real Business Example Questions for Discussion Best practices in Identifying Customer-driven Improvement opportunities Agenda Background Objectives A Literature Review Research and Results A Real Business Example Questions for Discussion Alfred Leung

Marketplace changes quickly Best practices in Identifying Customer-driven Improvement opportunities Background Superior customer value and satisfaction are critical to competitive advantage Marketplace changes quickly Continuous improvements are important to maintain competitiveness 2 2

Best practices in Identifying Customer-driven Improvement opportunities Objectives To know your customers’ needs and expectation To know the key customers need attributes and their relative importance To devise a customer-driven improvement model

Best practices in Identifying Customer-driven Improvement opportunities The captioned article examined how the best practice companies work to achieve the objectives The focus of the Review are: Performance-Importance Analysis Customer-driven Improvement modes

Best practices in Identifying Customer-driven Improvement opportunities Steps of review taken: A literature review Research methodology Results of the study

A Literature Review The Review looks at: Performance-importance analysis Methods calculating performance scores Methods calculating importance scores, & Customer-driven improvement models

A Literature Review Performance-importance analysis – a primary tool to identify opportunities for improving customer satisfaction Performance – the level of satisfaction for each product & service attributes, e.g. product quality, price, delivery & after-sale service Importance – customers’ perceived importance of individual product & service attributes

Performance-importance analysis Higher Importance Lower A Literature Review Performance-importance analysis Higher Importance Lower Major Weakness Major Strength Minor Weakness Minor Strength Performance Lower Higher

Literature review - Performance Scores Methods of calculating Performance Scores: Actual performance – customer satisfaction surveys Relative performance – comparing best practices in industries by Gap analysis Performance ratios Comparative scales

Literature review - Importance Scores Methods of calculating Importance Scores: Stated importance ratings To rate importance of each customer satisfaction attributes (from not at all important to very important) Statistically inferred methods To regress attribute performance ratings against overall performance measures

Literature review - Customer-driven improvement models Improvement models include: Cost-time Matrix Attributes that improved with fewer resources and shorter time are preferred Return on Quality (ROD) A technique for measuring impact of attribute performance on ROI

Research Methodology To gain insight into identifying improvement opportunities: Selecting a sample of best practice companies Collecting qualitative data Analyzing qualitative data, & Testing data and interpretation quality

Research Results Insight gained in the study: Best practice companies are using performance-importance analysis and customer-driven improvement methodology as in the literature review The use a 6-steps customer-driven improvement model

6-step Customer-Driven Improvement Model Examine performance-importance analysis Conduct complementary improvement analysis Assess firm capabilities Examine improvement costs Estimate ROI of improvements Select attributes, set goal and monitor improvement performance

A Real Business Example The Hong Kong Jockey Club (B2C & B2B) –an evolving process Before……….Operations driven Now………….Customer driven A formal organization, Corporate Business Planning department (CBP) to drive a customer-driven improvement program Cross-functional teams to support CBP in planning and implementing customer programs Customer segmentation are clearly defined and used to develop specific customer program, including product and service offerings to drive best value to customers and in turn optimal value to the organization Formal market research and customer focus groups are conducted regularly to study the performance-importance matrix Similar 6-steps customer-driven improvement model is used to monitor the process, in particular the ROI and resource deployment evaluation Benefits: understand the customer better, better product & service offerings

Questions for the class Why do we need a customer-driven program if we have the best product? It is very expensive to use the Performance –importance matrix and costly to conduct market and customer discovery research. Is it worth doing it?