Lean Six Sigma and the Three "Rs" of Customer Service

Cathy Lumsden, Green Belt CandidateJanuary 11, 2013

Project Charter Opportunity for Improvement (OFI): The company is losing market share by 30% approximately $25 million quarterly because it is not utilizing Social Media to enhance customer service. Customers are angry, frustrated and taking their business elsewhere.

◦ Critical to Quality (CTQ) = Prevent loss of market share via a Social Media plan

Goal Statement: The study will illustrate how the implementation of a Social Media campaign helped the company increase its Revenue, ROI, and Customer Retention through the implementation of Lean Six Sigma.

◦ The company is now attuned to the Voice of the Customer and is competitive.Scope: A large multinational corporation serves as the model for the review. Examined are the 2007 – 2012 quarterly results. Study Metrics: Customer service complaints are compared to revenue loss, customer acquisitions, and customer retentions.Business Case and Team: Identify best Social Media options for Customer Service that will generate in increase in revenue of 65% and a decrease in customer complaints by 85%.

◦ Team Lead: Cathy Lumsden – Green Belt Tyler Slone – Executive Sponsor Olivia Turner – Black Belt Jackson Taylor – Project Champion Charlotte Hall – MBB/Mentor Levi Carlton - Recorder

Define Phase

Define Phase

Voice of the Customer

Define Phase

Eight Wastes

Measure Phase

Gather Customer Survey Service Results - Step 1

Document Customer Survey Service. Results - Step 2

Analyze Customer Service Survey Results - Step 3

Recommend Customer Service Solutions Plan - Step 4

Implement Social Media Plan - Step 5

SIPOC DIAGRAM

Measure Phase

1.Consider: What brands/products do consumers have in mind as they contemplate a purchase?2.Evaluate: Consumers gather information to narrow their choices.3.Buy: Consumers decide on a brand and buy it.4.Post-purchase: Consumers reflect on the buying experience, creating expectations/considerations that will inform a subsequent purchase5.Advocate: Consumers tell others about the product or service they bought.

Process Mapping – Customer Decision Journey

Measure Phase

Current Value Stream Map

Pareto Analysis

Measure Phase

Scatter Diagrams

Measure Phase

2

3

4

5

6

7

8

# C

AL

LS

15 17.5 20 22.5 25

ACCOUNT

Scatterplot Matrix SOCIALMEDIA IMPLEMENTATION =new

20

25

30

35

40

45

50

# C

AL

LS

2 4 6 8 10 12

ACCOUNT

Scatterplot Matrix SOCIALMEDIA IMPLEMENTATION =old

The Social Media plan implementation enabled the Call Center to be more responsive to customer issues. The Call Center became proactive in generating revenue and increasing ROI. Web site usage increased. Complaints dealing with service issues, tech support, and delivery delays decreased

Social Media Distribution Charts – Measures of Dispersion

Measure Phase

30000

40000

50000

60000

70000

80000

100.0%

99.5%

97.5%

90.0%

75.0%

50.0%

25.0%

10.0%

2.5%

0.5%

0.0%

maximum

quartile

median

quartile

minimum

80000

80000

80000

80000

73750

65250

42500

36350

35000

35000

35000

Quantiles

MeanStd DevStd Err MeanUpper 95% MeanLower 95% MeanN

60416.66716091.829

4645.31170640.92750192.406

12

Summary Statistics

Customer Complaints

$80,000,000.00

$100,000,000.00

$120,000,000.00

$140,000,000.00

$160,000,000.00

$180,000,000.00

$200,000,000.00

$220,000,000.00

100.0%99.5%97.5%90.0%75.0%50.0%25.0%10.0%2.5%0.5%0.0%

maximum

quartilemedianquartile

minimum

2e+82e+82e+82e+8

1.84e+81.6e+8

1.11e+88.95e+7

8.5e+78.5e+78.5e+7

Quantiles


1495833334081322911781765

175514822123651845

12

Summary Statistics

Revenue in Millions

Distributions social media implementation=old

0

10000

20000

30000

40000

50000

60000

70000

80000

100.0%

99.5%

97.5%

90.0%

75.0%

50.0%

25.0%

10.0%

2.5%

0.5%

0.0%

maximum

quartile

median

quartile

minimum

70000

70000

70000

67000

52500

25000

6250

2450

2000

2000

2000

Quantiles


2925023625.3916820.062944260.85714239.143

12

Summary Statistics

Customer Complaints

$100,000,000.00

$200,000,000.00

$300,000,000.00

$400,000,000.00

$500,000,000.00

$600,000,000.00

100.0%99.5%97.5%90.0%75.0%50.0%25.0%10.0%2.5%0.5%0.0%

maximum

quartilemedianquartile

minimum

5.75e+85.75e+85.75e+85.38e+83.25e+8

1.8e+81.28e+81.05e+8

1e+81e+81e+8

Quantiles


234583333148851029

42969591329158765140007902

12

Summary Statistics

Revenue in Millions

Distributions social media implementation=new

These two sets of distribution charts illustrate the positive impact of Social Media upon Revenue. There is a direct correlation with the decrease in customer complaints to the increase in revenue in millions.

Maximizing ROI

Analyze Phase

Analyze Phase

Cause-Effect or Ishikawa Diagram

Developer needs to be changed

Customer Service

Poor Customer Service Negatively Impacts Revenue, ROI, and Relationship Building

Manpower

Environment

MachineryMaterials

Cloud Can't Support Needs

Emails

Web SitesHigh Turnover Rate

Lack Sophisticated Environment to Support 24/7 Customer Service Needs

Lack of Std Op Procedures

MethodsMeasurements

Number of ComplaintsLabor Intensive

Lost Customers Workers align with customers at

different speeds

Fishbone Diagram

Validating MeasurementAnalyze Phase

2

2.5

3

3.5

4

4.5

Aver

age

of R

even

ue G

ain

LCL

UCL

Average = 3.2673

0 45 100

130

169

199

255

300

341

366

402

441

465

516

543

599

648

700

740

796

852

908

1007

1306

2000 57 95 13

5

158

183

210

237

256

276

305

330

353

380

413

454

488

518

540

569

602

635

675

737

775

823

890

946

1037

1177

1307

No Yes

Revenue Impact / # Complaints per Customer Account

0

0.5

1

1.5

2

2.5

Rang

e of

Rev

enue

Gai

n

LCL

UCL

Average Range

0 45 100

130

169

199

255

300

341

366

402

441

465

516

543

599

648

700

740

796

852

908

1007

1306

2000 57 95 13

5

158

183

210

237

256

276

305

330

353

380

413

454

488

518

540

569

602

635

675

737

775

823

890

946

1037

1177

1307

No Yes

Revenue Impact / # Complaints per Customer Account

2

2.5

3

3.5

4

Mea

n (R

even

ue G

ain)

0

30 63 90 115

135

155

172

194

217

237

254

271

291

311

328

347

366

384

410

435

455

473

495

520

537

554

574

599

625

646

671

703

733

764

787

822

860

893

932

959

1019

1116

1210

1312

1675

# Complaints per Customer Account

NoYes

RevenueImpact

Average Chart

Range Chart

Parallelism Plot - Revenue Chart

Improve Phase

Failure Mode and Effects Analysis• Improve Process Flow and Eliminate Waste

– Waiting (delivery of product vs. promised delivery date), over-processing (hard sale), over-production (customer complaints), defects (technical support), transport (delays), inventory (product) and motion (duplicate calls by staff)

Future Value Stream Mapping

Improve Phase

Customer Contact

WebCall Center Face to Face Tech Support

YES Yes Yes Yes

Customer Routed to

Appropriate Sales Channel

Customer Routed to Appropriate Sales Channel

Customer Appreciates Advice and Buys Product

Successful implementation &

knowledge transfer

Increase in Revenue and ROI

Analyst Ratings Increase

Customer Peer Ratings Increase

Sustaining and Extending ROI

Improve Phase

IMR Chart

Control Phase

0

20000

40000

60000

80000

100000

Cus

tom

er C

ompl

aint

s

old new20

07 Q

TR

2

2007

QT

R4

2008

QT

R2

2008

QT

R4

2009

QT

R2

2009

QT

R4

2010

QT

R2

2010

QT

R4

2011

QT

R2

2011

QT

R4

2012

QT

R2

2012

QT

R4

Quarters

oldnew

Phase49540.25

LCL

12814.52

LCL60416.67

Avg

29250

Avg71293.09

UCL

45685.48

UCL

Phase Limits

Individual Measurement of Customer Complaints

$0.00

$100,000,000.00

$200,000,000.00

$300,000,000.00

$400,000,000.00

$500,000,000.00

$600,000,000.00

$700,000,000.00

Rev

enue

in M

illio

ns

old new

2007

QT

R2

2007

QT

R4

2008

QT

R2

2008

QT

R4

2009

QT

R2

2009

QT

R4

2010

QT

R2

2010

QT

R4

2011

QT

R2

2011

QT

R4

2012

QT

R2

2012

QT

R4

Quarters

oldnew

Phase1.218e+8

LCL

1.198e+8

LCL1.496e+8

Avg

2.346e+8

Avg1.774e+8

UCL

3.494e+8

UCL

Phase Limits

Individual Measurement of Revenue in Millions

Control Chart

As customer complaints decrease , revenue increases

Note: Focus is not just on customer complaints incorporates costs of customer complaints – There will always be some customer complaints but they do not always impact revenue.

The Social Media Plan is implemented in 2010 QTR 1. These charts show the impact of the plan upon revenue.

Xbar and R Chart of Category (Service, Web, Tech Support, Delivery, and Upgrades)

Control Phase

XBar & R chart of Category

Ave

rag

e(C

ate

gory)

Range(C

ate

gory)

Cust Service

Delivery

New Purchase

Price

Tech Support

Upgrade

Cust Service

Delivery

New Purchase

Price

Tech Support

Upgrade

new oldSOCIAL MEDIA IMPLEMENTATION

AverageRange

Pointsplotted

.

.

LCL2.294118

.

Avg..

UCLRangeRange

LimitsSigma

.

.

Sample Size

Category Limit Summaries

Extending ROI

Control Phase

Improvements through Analysis of Customer Service Social Media Programs

1) Seeking an actual response from the company about a service issue – 50% increase in responsiveness

2) Praising the company for a great service experience – 48% increase

3) Sharing information by customers about their positive service experience with a wider audience – 47% increase

4) Venting frustration about a poor service experience – 46% decrease

5) Asking other users how to have better service experiences – 43% increase

Summarization of Lean Six Sigma Project Findings