Chapter 5

CUSTOMER SATISFACTION

February 2008

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One customer, well take care of, could be more valuable than $ 10,000 worth of advertising

Service Quality
Definition of Service (ISO 9000) The results generated by activities at the interface between the organization and the customer, and by the organizations internal activities, to meet customer needs.

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Features of services

Speed Delivery schedule Care in handling Each service offering is different Psychology of customers Difficulty in Understanding requirements Estimating cost Measuring performance Measuring customer satisfaction Marketing
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February 2008

Speed
Offer the service as fast as possible without compromising on quality

Delivery Schedule

Adhering to time schedule is critical in service industry

Care in Handling
The customers and deliverables have to be handled carefully

Each Service offering is different Designed to fulfill the individual needs and personal preferences of customers

Customer Requirements are difficult to comprehend Effective communication is important to know the true requirements of the customer

Difficulty in Estimating Cost

Varied requirements, materials, time and manpower make it harder to determine cost and charges

Difficulty in Measuring Performance of Services

Service will be different at each time of delivery

Difficulty in Marketing Services

Two ways of marketing services
1.

2.

Personal Contact with personal buyers Building credibility of organization by good services consistently

Customer Orientation
Running the business with the sole motive of serving more and more customers and satisfying them Business Thrives on Customers

Customer Delight
The very favorable experience of the client of a business when they have received a good or service that significantly surpasses what they had initially anticipated.

Customer Delight
Tom Peters gives an interesting account of customer delight. He illustrates the superior customer orientation of the Staff at Hotel Orient in Bangkok. For instance, the staff at the fourteenth floor concierge desk pushes the down button as you leave your room so that you and the elevator car arrive at the fourteenth floor elevator doors simultaneously! The customers delight in such situations knows no bound.
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Customer Attrition
If the product is good, the customer will come back If not, the product will come back

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Customer Attrition
Existing customers leaving the organization High customer attrition rates indicates falling standards with regard to quality of service provided

Why customers leave?

According to Tom Peters, the customers leave because of the following reasons: 15% because of quality problems 15% because of higher price 70% did not like the human side 50% of problems are due to misunderstood requirements

Contractual requirements of Customers

Documented requirements
Quality:

Service/Product Characteristics Time Schedule for Delivery Price Installation and warranty Documentation support Training Support

Non-contractual requirements of Customers

Quality not documented before Implied requirements Value for the money spent Environment Customer service personnel

Customer Contact Personnel

Separate set of people to talk to and accept orders Different from actual producers

COMFORT
According to D.H. Stamatis COMFORT C for caring O for Observant M for Mindful F for Friendly O for Obliging R for Responsible T for Tactful
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KANO Model
THE KANO MODEL
Evolved by Dr.Nariaki Kano of Tokyo Rika University, in the late 1970s.

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One Dimensional Models for Quality

Performance

Bad

Good

Customer Satisfaction
Bad Good

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Satisfaction
Good

Performance

Two Dimensional Quality Model

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Excitement Quality
Customer Satisfaction Function Absent Performance Quality Low Function Fully Implemented Threshold (basic) Quality

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Kano Model
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Three Types of Responses

Basic Quality Performance Quality Excitement Quality

Basic Quality
Threshold Quality Unspoken or minimum expected requirements Customers are expecting his requirements will be implemented Customers will complain if basic quality attributes are not fulfilled but they will not appreciate the supplier for fulfilling the same

Basic Quality Measurements

Customer Complaints Warranty Data Product Recalls Number of Lawsuits Things gone wrong Other failure reports

Performance Quality
Voice of customer Quality Function Deployment The better the performance, the greater the satisfaction

Excitement Quality
Customers received some feature or attribute they did not expected or think of Reason for customer loyalty

Agreed Customer Requirements

Finding out requirements right first time

Customers

may mean something and say something else Service provider should be inquisitive

Use checklist
Contains Model
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all the relevant details

Checklist
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Agreed Customer Requirements

Review of requirements
Review

contract before service request is

given

Foresee and provide for amendments

Additional

requirements with additional costs

Agreed Customer Requirements

Documented Policy
Procedures

and Methodology in Customer

Service

Code of good customer handling practices

Result

of past experiences

Customer Satisfaction Measures

Customer perceived quality No hard and fast rules for identifying measures Identify vital few measures Arrive at quantitative measures Parameters in determining perceived quality Defects in the product on delivery Number of requirements fulfilled Number of misunderstood requirement Frequency of defects Time taken for repair
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Customer Satisfaction Measures

Response time
Delay

in delivery Delay in installation Promptness in service Time taken for attending to service calls Number of reminders the customer made to his service provider Response time of the organization for customers additional requirement for delivery

Customer Satisfaction Measures

Errors
Documentation Delivery

ex. Invoice, receipts

Delays in
Execution Delivery

of the job

Customer Feedback
Difficult to get Design Simple feedback forms Ensure Confidentiality Analyze and Display results

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CASE STUDY Customer Satisfaction Survey of Mercedes - Benz

MBCV Dealer Cape Town Centurion Roodeport
February 2008

Sales Service Overall 85.19 81.67 96.36

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88.3 84.82 86.28

86.745 83.25 91.32

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Complaint Resolution
To be handled by Senior Management Analyze independently Give Benefit of Doubt to customers Satisfying Annoying customers Establish Complaint Recovery Process

Process

of receiving complaints, processing them, communicating to customer and resolving the issue Problems have to be recorded
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