The Voice of the Customer Pertemuan 9-10 Matakuliah : Perancangan Manajemen Mutu Tahun : 2009 The Voice of the Customer Pertemuan 9-10

The Voice of the Customer Chapter 5 The Voice of the Customer S. Thomas Foster, Jr. Boise State University PowerPoint prepared by Dave Magee University of Kentucky Lexington Community College Bina Nusantara University ©2004 Prentice-Hall

Chapter Overview Customer-Driven Quality What Is the Voice of the Customer? Customer-Relationship Management The “Gap” Approach to Service Design Segmenting Customers and Markets Strategic Alliances between Customers and Suppliers Communicating with Customers Bina Nusantara University

Chapter Overview Actively Solicited (asked) Customer Feedback Approaches Passively Solicited Customer Feedback Approaches Managing Customer Retention(keeping in mind) and Loyalty Customer Relationship Management (CRM) Systems A Word on Excellent Design Bina Nusantara University

Customer Defined A customer is the receiver of goods or services. Typically, this involves an economic transaction in which something of value has changed hands. Internal customers Employees receiving goods or services from within the same firm. External customers Bill-paying receivers of work. The ultimate people we are trying to satisfy. End user Another term that describes customers. Bina Nusantara University

Customer-Driven Quality Customer-Driven Approach Customer driven quality represents a proactive approach to satisfying customer needs that is based on gathering data about our customers to learn their needs and preferences and then providing products and services that satisfy the customer. Bina Nusantara University

Customer-Driven Quality The Pitfalls of Reactive Customer-Driven Quality One of the difficulties in satisfying customer requirements is that in a dynamic environment customer needs are constantly changing. Problems occur when customer requirements increase at a faster rate than quality and service improvement. This places the firm in reactive mode and may signal the need for major process and service redesign. Bina Nusantara University

Customer-Driven Quality Figure 5.1 Quality Reactive Customer-Driven Quality Model Region of dissatisfaction Customer expectations Region of complacency Supplier performance Time t T Bina Nusantara University

What is the Voice of the Customer? The voice of the customer represents the wants, opinions, perceptions, and desires of the customer. Quality Function Deployment (QFD) “House of quality,” Translates customer wants into a finished product design. Bina Nusantara University

Customer-Relationship Management This view of the customer asserts that he or she is a valued asset to be managed. The tangibles meet the intangibles to provide a satisfying experience for the customer. Four important design aspects Complaint resolution Feedback Guarantees Corrective action or recovery Bina Nusantara University

Customer-Relationship Management Complaint resolution Components of a Customer-Relationship Management Process Feedback Customer Relationship Management Guarantees Corrective action Figure 5.2 Bina Nusantara University

Customer-Relationship Management Complaint Resolution Complaint resolution is an important part of the quality management system. Three common types of complaints regulatory complaints employee complaints customer complaints. The complaint-resolution process involves the transformation of a negative situation in one in which the complainant is restored to the state existing prior to the occurrence of the problem. Complaint-recovery process Bina Nusantara University

Customer-Relationship Management Compensate people for losses Apologize to the customer (contrition) Make it easy for the complainant to resolve his or her problem Complaint Resolution (or recovery) Process Bina Nusantara University

Customer-Relationship Management Feedback There are two main types of feedback feedback to the customer feedback to the firm as a basis for process improvements Feedback to the firm should occur on a consistent basis with a process to monitor changes resulting from the process improvement. Some customer data is solicited and other data is provided without solicitation (talep). Bina Nusantara University

Customer-Relationship Management Guarantees A guarantee outlines the customer’s rights. The guarantee is both a design and an economic issue that must be addressed by all companies before the first sale occurs. To be effective, a guarantee should be: Unconditional Meaningful Understandable Communicable Painless to invoke Bina Nusantara University

Customer-Relationship Management To be effective, guarantees should be: Unconditional Understandable Meaningful Communicable Painless to invoke Bina Nusantara University

Customer-Relationship Management Corrective Action When a service or product failure occurs, the failure is documented and the problem is resolved in a way that it never happens again. Corporate teams or committees should be in place to regularly review complaints and to improve processes so the problems don’t recur. Bina Nusantara University

The Gap Approach to Service Design Typically, the gap refers to the differences between desired levels of performance and actual levels of performance. The formal means for identifying and correcting these gaps is called gap analysis. Bina Nusantara University

The Gap Approach to Service Design Management perceptions of consumer expectations Translation of perceptions into service quality specs Service delivery Perceived service Expected service Word of mouth communications Past experience Personal needs External to consumers Gap 4 Marketer Gap 5 Gap 3 Gap 2 Gap 1 Figure 5.3 Bina Nusantara University

The Gap Approach to Service Design Gaps Model Poor Good High Low Customer Perceptions Relative strength Wasted time Minor annoyances IV I III Areas for improvement II Relative Importance Bina Nusantara University

Segmenting Customers and Markets Segmenting Data: To segment markets means to distinguish customers or markets according to common characteristics. Segmentation implies that data is gathered separately for each segment and analyzed separately. Bina Nusantara University

Strategic Alliances Between Customers and Suppliers Strategic Partnerships Increasingly, sole sourcing arrangements are developing into strategic partnerships where the suppliers become de facto subsidiaries to their major customers. In these arrangements, not only are suppliers sole source providers, but also they integrate information systems and quality systems that allow close interaction at all levels. Bina Nusantara University

Communicating With Customers Customer Rationalization Results from agreement between marketing and operations as to which customers add the greatest advantage and profits over time. Annuity Relationship An annuity relationship is one in which the customer provides a long-term, steady income stream to the provider. Gathering Data From Customers Active data gathering Passive data gathering Bina Nusantara University

Actively Solicited Customer Feedback Approaches Includes all supplier initiated contact with customers. The three most common arenas telephone customers conducting focus groups sending out surveys Types of Data Soft data Hard data Ordinal data Bina Nusantara University

Actively Solicited Customer Feedback Approaches Soft Data Phone contacts, focus groups, and survey results. Hard Data Hard data are measurements data such as height, weight, volume, or speed that can be measured on a continuous scale. Ordinal Data Are ranked so that one measure is higher than the next. Bina Nusantara University

Actively Solicited Customer Feedback Approaches Different Methods of Soliciting Customer Feedback Telephone Contact Focus Groups Customer Service Surveys Bina Nusantara University

Actively Solicited Customer Feedback Approaches Focus Group Steps Identify Purpose Narrow Scope of Questions Select Target Population Develop Questions Run Multiple Groups Summarize and Develop Common Themes Figure 5.5 Bina Nusantara University

Actively Solicited Customer Feedback Approaches Steps in Developing a Useful Survey Identifying customer requirements Developing and validating the instrument Implementing the survey Analyzing the results Bina Nusantara University

Actively Solicited Customer Feedback Approaches Reliability and Validity Figure 5.8 Bina Nusantara University

Passively Solicited Customer Feedback Approaches Customer initiated contact, such as filling out a restaurant complaint card, calling a toll-free complaint line, or submitting an inquiry via a company’s Web site. Examples customer research cards customer response lines web site inquires. Bina Nusantara University

Managing Customer Retention and Loyalty Customer Retention (keep in mind) Customer retention is measured as the percentage of customers that return for more service. Customer retention will increase by application of the service tools and concepts contained in this chapter such as tools for data gathering and analysis. Customer Loyalty Customer loyalty can be instilled by offering specialized service not available from competitors. This can take many forms including high customer contact or technology advancements. Bina Nusantara University

Customer Relationship Management Systems Systems created to mine data including personal, internet, process and customer preference information to improve customer service and retention. Manage 3 phases of CRM Acquisition Retention Enhancement Bina Nusantara University

Customer Relationship Management Systems CRM Functions by Category Customer-centric activities Enterprise capabilities Customer acquisition Sales management Customer retention and enhancement Bina Nusantara University

A Word on Excellent Design Not all good ideas come from customers. Ready-Fire-Aim A method that focuses on getting new technology to the market and then determining how to sell the product. Good customer intelligence coupled with innovative research and development programs appears to be the best marriage of resources. Bina Nusantara University

Discussion Questions Case 5-1: Case 5-2: Customer Quality Feedback at Apple Computer Case 5-2: Chaparral Steel: Achieving Hight Quality through a Commitment to Both External and Internal Customers Bina Nusantara University