1. 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

2. 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

3. 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

4. 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

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

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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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

15. 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

16. 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?