Industry Internship TM 391 Lecture 3

TQM’s Customer Approach “the customer defines quality.” “the customer is always right.” “the customer always comes first.” “the customer is king.” “quality begins and ends with the customer”

Types of Customers External - outside the organization (people who pay the bills.) End-user customers Manufacturer (OEM) for suppliers. Internal - people within your organization who receive your work In many situations, producers have multiple customers and therefore find it useful to identify “core customers”

Some Data on Customer Attitudes and Loyalty (Source: Winning Back Angry Customers, Quality Progress, 1993) An average customer with a complaint tells 9-10 people; if it is resolved he/she only tells 5 people. For every complaint received, there are twenty others that are not reported. It costs 5-10 times more in resources to replace a customer than it does to retain one. Companies spend 95% of service time redressing problems and only 5% trying to figure out what made the customer angry.

Measuring Customer Satisfaction Example: J.D. Power -- Initial Quality Survey measures customer satisfaction - problems per 100 vehicles. Effect of J.D. Power IQS on automotive quality? 1998: 176 problems per 100 vehicles* 2005: 118 problems per 100 vehicles* How does greater customer awareness impact quality?

Methods to Collect Customer Satisfaction Data Negative Feedback Analysis customer complaints, warranty claims, repair records… focus on problems concern: many dissatisfied customers do not complain (1/20 complain). Proactive Feedback (ask customers for their opinions) examples: customer surveys, focus groups, “employees” as customers. advantage: identify key product features and assess levels of performance. Analysis of Competitor Products examples: Benchmarking, “War Rooms” or Tear Down Analysis advantage: “Know thy competitor, know thyself”

Identifying Customer Needs Possible solutions focus-group discussions individual and group interviews surveys comment cards study repair and return data customer complaints warranty claims analyze competitor products

Types of Customer

Types of Customer’s. .Based on unique behavioral attributes, customers are of following types .Loyal customer .Discount customer .Impulse customer .Need based customer .Wandering customer

Loyal Customer .They represent no more than 20 percent of our customer base, but make up more than 50 percent of our sales. .Nothing will make a Loyal Customer feel better than soliciting their input and showing them how much you value it. . These people are the ones who can and should influence our buying and merchandising decisions .We need to be communicating with these customers on a regular basis by telephone, mail, email, etc..

. 1 Satisfied customer will lead to 500 new customers. . Customer satisfaction will lead to customer expectation. . 1 Satisfied customer will lead to 500 new customers. . the more you do for them, the more they will recommend you to others.

Discount Customer They shop our stores frequently, but make their decisions based on the size of our markdowns

.This category helps ensure your inventory is turning over and, as a result, it is a key contributor to cash flow .This same group, however, can often wind up costing you money because they are more inclined to return product. .Merely satisfied customers, also show defection ready to switch. .Chase low prices. .Milk these customers as long as they are active or in discount seasons.

Impulse Customer They do not have buying a particular item at the top of their “To Do” list, but come into the store on a whim. They will purchase what seems good at the time.

Clearly, this is the segment of our clientele that we all like to serve. There is nothing more exciting than assisting an Impulse shopper and having them respond favorably to our recommendations. They will purchase what seems good at the time Buy on impulse. Maximize the profit on each transaction. Pursue fashion trends.

Need Based Customers People in this category are driven by a specific need. When they enter the store, they will look to see if they can have that need filled .if, not they will leave right away It is difficult to satisfy these people. Customers are habitual of particular brand.

Show inertia in brand switching. Need based customer can easily be lost to internet sales or a different retailer. So to overcome this threat, positive personal interaction is required. They can also become loyal customers if they are well taken care of.

Wandering Customer They have no specific need or desire in mind when they come into the store. They want a sense of experience or community. They make up the smallest percentage of sales. keep in mind, however, that although they may not represent a large percentage of your immediate sales, they are a real voice for you in the community. Although wandering customers cannot be ignored, the time spent on them needs to be minimized.

Provide Services to Colleagues and Customers Guest Relations Complaint Handling

TYPES OF CUSTOMERS INTERNAL CUSTOMERS People with whom we work EXTERNAL CUSTOMERS Including: - International tourists - Families - Business Travellers - People with disabilities - Difficult customers Provide Service to colleagues and customers

What are wants, needs and expectations? A human need is a state of felt deprivation Wants A form taken by human needs as they are shaped by culture and individual personality Expectations To be treated with respect To be made welcome To receive timely and professional assistance and service To be understood To feel important To be appreciated To be recognised To enjoy the experience Provide Service to colleagues and customers

Factors influencing needs and expectations include Social Cultural Economic Health Age Personality Personal interests Likes and dislikes Time Available Perception Provide Service to colleagues and customers

NEEDS AND EXPECTATIONS OF CUSTOMERS could include Basic Human Needs Food, Shelter, Security,Social and Esteem Special services and facilities Entertainment Information Provide Service to colleagues and customers

What would you consider when dealing with guests with special needs? Physically challenged – mobility impaired, hearing impaired or blind Intellectually challenged Pregnant women Families with children Unaccompanied children Business travelers Travelers with special cultural or language needs Elderly travelers Provide Service to colleagues and customers

Customer Service Skills include Meeting customer requirements Demonstrating communication skills – listening and questioning techniques Handling customer requests and complaints Developing a rapport Promoting suitable products and service to enhance experience To deliver quality service we must also demonstrate appropriate work ethics and behaviour. Provide Service to colleagues and customers

What is quality service? You could describe customer service as the art of relating to your customers so they feel comfortable, looked after, satisfied, special and welcome. Service excellence is achieved when the enterprises’ services and facilities not only meet but exceed the guests expectations. Can you think of when this has happened to you? Can you think of when you may have delivered quality service to a customer? Provide Service to colleagues and customers

WHAT WE NEED TO PROVIDE QUALITY SERVICE!!! KNOWLEDGE - Of your customer - Of how to do your job - Of all services and facilities in your hotel - Of local and state attractions SKILLS - Interpersonal skills - Anticipation of your customer needs ATTITUDE - Genuine desire to help your guests - whether solving problems or just making sure they have a great stay - Positive attitude at all times - Proactive – providing help and guidance without necessarily being asked – guests feel they can depend on you - Displaying tact and diplomacy Provide Service to colleagues and customers

Steps to Ensure we give Quality Service! Anticipate needs Welcome customers warmly – with a warm genuine smile Listen and probe - ask open questions Reflective listen Offer an action plan to deliver what they want Agree on this plan What? Where? When? How? Avoid broken promises Follow up to check everything is up to their expectations Combine this with: Communicating in a language they can understand Tune into their individual needs – by observation Use their name – wherever possible Provide Service to colleagues and customers

Maintaining Quality Service Organisation and staff responsibilities Training of staff Good communications between departments Established work programs Good awareness of activities within other departments Importance of quality customer service to hospitality industry Customers have come to expect quality service Competition demands quality service Quality service is the key to business success Quality service requires you to be one step ahead of the customer – anticipating their needs Provide Service to colleagues and customers

ANTICIPATE THE NEEDS OF YOUR CUSTOMERS ASK YOURSELF: Have I considered all the customer needs? What could the customer need next? How can I improve the service now for the customer? Then offer to provide that service - without the customer having to ask! Have you ever anticipated a customers needs? Provide Service to colleagues and customers

How do you know when we’ve given Quality Service? Increased job satisfaction Positive performance appraisals Gratuities – tips/gifts Thank You - by letter or verbally Enhanced reputation Establishment winning quality awards Returning guests Guest Comment Cards - Questionnaires Provide Service to colleagues and customers

WHY PEOPLE COMPLAIN? From frustration To impress other people For compensation Provide Service to colleagues and customers

When dealing with a guest complaint - NEVER Talk down to the customer Be defensive Justify why it happened Blame other people or departments Blame the customer Provide Service to colleagues and customers

COMPLAINT HANDLING PROCEDURE Listen without interruption Don’t get defensive Use a ‘sad but glad’ expression Express concern and empathy - apologise sincerely Establish the problem - ask questions Find out what they want Explain what you can and cannot do Fully discuss alternatives Take Action Follow up to ensure they are happy Provide Service to colleagues and customers

Handling Complaints Information recorded accurately in Complaint Log Recognised complaint handling procedure followed Relevant department or personnel consulted Follow up to ensure everything is resolved - record action in Log Log reviewed to see if on going/multiple complaints being received and what steps can be taken to rectify. Provide Service to colleagues and customers

Empowerment The person who takes the complaint owns the complaint. You should try to resolve the complaint to the best of your ability. Do you know what you can do to resolve a complaint without calling for a manager or supervisor? Provide Service to colleagues and customers

Complaint Recording and Follow Up Procedures All complaints must be handled diplomatically so all parties recognise: The issue has been raised with relevant authority All points of view have been aired Discretion will be applied in resolving the matter Due process will be followed Action will be taken and the matter will be remedied You must establish the details of the customer complaint through Questioning and active listening techniques Summarising and clarifying the issue Recording details of complaint Discussing with customer the process of resolution – giving them options and letting them know how the complaint will be resolved You need to know the lines of reporting complaints and when to seek assistance Provide Service to colleagues and customers

Benefits of positive handling of complaints The value of amicably resolving complaints can not be underestimated and include: Promoting goodwill Improved customer relations Positive work of mouth publicity Promotion of enterprise service ethic Provide Service to colleagues and customers

DIFFERENCE BETWEEN A COMPLAINING CUSTOMER AND A DIFFICULT CUSTOMER A complaining customer is somebody whose needs and expectations have not been met A difficult customer is somebody who is a challenge to serve because of their personality, for example, they may be rude, impatient or talkative Provide Service to colleagues and customers

HOW CAN A CUSTOMER BE DIFFICULT? Rude Impatient Noisy Talkative Confused - unable to make decisions Silent Fussy Provide Service to colleagues and customers

TYPES OF DIFFICULT CUSTOMERS Rude Customer Can be rude to everyone - they just don’t feel comfortable being nice. DO Ignore their rudeness and don’t take it personally DON’T Become Rude and Aggressive Impatient Customer Always in a hurry - and it won’t matter how quickly you serve them - they will still be impatient DO Serve them quickly and politely DON’T Waste their time with conversation and they may not want you trying to sell them products and services Provide Service to colleagues and customers

TYPES OF DIFFICULT CUSTOMERS Confused Customer Find it difficult to make decisions and may take a long time to decide DO Be helpful by making suggestions and asking questions DON’T Rush them - they could become flustered and embarrassed Talkative Customer Wants to talk and could spend all day doing it DO Be friendly and attentive - Lead the conversation DON’T Ignore them or give them all your attention so other customers are ignored Provide Service to colleagues and customers

Thank You