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Customer SatisfactionCustomer Satisfaction

Golden Rules

rule 1 : the customer is always rightrule 2 : if the customer is wrong, refer to rule one

Customer Satisfaction and Customer Satisfaction and LoyaltyLoyalty

60% of future revenue comes from existing customers60% of future revenue comes from existing customers Costs 5 times more to attract new customer than to retain an old oneCosts 5 times more to attract new customer than to retain an old one Average wronged customer tells to more than 10 people about bad Average wronged customer tells to more than 10 people about bad

experiencesexperiences 90% unhappy customers will never purchase goods again90% unhappy customers will never purchase goods again

Problem mushroom

•100 problems•10 reported to seller•1000 others know

Key Dimensions of QualityKey Dimensions of Quality

PerformancePerformance , , Special FeaturesSpecial Features , ,ReliabilityReliability , ,ConformanceConformance , ,Durability,Serviceability,AestheticsDurability,Serviceability,Aesthetics

ReliabilityReliability , , AssuranceAssurance , , TangiblesTangibles , , EmpathyEmpathy , , ResponsivenessResponsiveness

Service QualityService Quality

©© Oxford University Press 2008. All rights reserved. Oxford University Press 2008. All rights reserved.44

Kano’s ModelKano’s Model

Noriaki Kano ,1984

Kano Model of Customer Kano Model of Customer NeedsNeeds

(three classes of customer requirements)(three classes of customer requirements)

Dissatisfiers Dissatisfiers : : expected requirements expected requirements (must be attributes)(must be attributes)(Package leak, S -Hyper band, Hot coffee, clean hospital floor etc)(Package leak, S -Hyper band, Hot coffee, clean hospital floor etc)

SatisfiersSatisfiers: : expressed requirements expressed requirements ( one dimensional attributes)( one dimensional attributes)(power windows,sunproof ,1200 W sound vs. 400 W ) (power windows,sunproof ,1200 W sound vs. 400 W )

Exciters/delightersExciters/delighters: : unexpected features/innovative unexpected features/innovative (attractive attributes)(attractive attributes)

( weather channel button on radio, LG Goldeneye)( weather channel button on radio, LG Goldeneye)

•Meeting customer expectations(providing satisfiers) is minimum•Exciter might have become satisfier / disatisfier gradually

http://www.kanomodel.com

Customer Listening Customer Listening PostsPosts

Focus groupsFocus groups Direct customer contact(personal/telephonic)Direct customer contact(personal/telephonic) Mail QuestionnaireMail Questionnaire Field intelligenceField intelligence Complaint analysisComplaint analysis

Determining the Voice of Customers(VoC)Determining the Voice of Customers(VoC)

Identify the target market – customers, profiles & geographical distributions

eg – designing a new Mgmt subject like Business Statistics customers will be• Students of the MBA programme• Teachers who teach courses in subsequent semesters that need stats ,viz,POM,FM (Int Customers)• Companies that give jobs to students after their MBA ( Ext Customers)

Quality Function Deployment (QFD)

Technique to know the customer requirements & accordingly design new products & services

Also useful to modify the designs/features of existing products with changed requirements of customers

QFD helps to convert customer expectations called “voices of customers”(VOCs) into design / technical requirements

QFD also helps designers to know where their products exist when compared with the competitors products

QFD : structured method for translating customer requirements into appropriate technical requirements for each stage of product development & production

Relationship between requirements &

descriptors

Prioritized technical descriptors

Technical descriptors(Voice of the Organization)

Interrelationship between technical

descriptors

House of Quality

Moments of Truth Moments of Truth ( Jan Carlzon,CEO,Scandinavian Airlines)( Jan Carlzon,CEO,Scandinavian Airlines)Every instance in which a customer comes in contact with an employee of the Every instance in which a customer comes in contact with an employee of the companycompany

eg. eg. (airline)(airline)

– Making a reservationMaking a reservation– Purchasing ticketsPurchasing tickets– Checking baggageChecking baggage– Boarding a flightBoarding a flight– Ordering a beverageOrdering a beverage– Requests for a magazineRequests for a magazine– Picking up baggagePicking up baggage

SWA – presonalised reply within 4 weeks /birthday cards to frequent flyers,Sep 11

Performance-Importance Performance-Importance AnalysisAnalysis

Performance

Importance

Low High

Low

High

Neglect Overkill

Vulnerable Strengths

Customer Relationship Customer Relationship Management Management

Accessibility and commitments Accessibility and commitments (P&G toll free 1974,FedEx-refunds, )(P&G toll free 1974,FedEx-refunds, )

Selecting and developing customer contact employeesSelecting and developing customer contact employees(P&G – VoC , Ritz Carlton-whatever it takes-$2000,)(P&G – VoC , Ritz Carlton-whatever it takes-$2000,)

Relevant customer contact requirementsRelevant customer contact requirements(Walt Disney-eye contact,SWA-internal customers)(Walt Disney-eye contact,SWA-internal customers)

Effective complaint managementEffective complaint management ( Wal Mart – Columbia, Nissan - clearing dissatisfaction within 24 hrs) ( Wal Mart – Columbia, Nissan - clearing dissatisfaction within 24 hrs)

Exploiting CRM technologyExploiting CRM technology

Measuring & Improving Customer SatisfactionMeasuring & Improving Customer Satisfaction

Discover customer perceptions of business effectivenessDiscover customer perceptions of business effectiveness

Compare company’s performance relative to competitorsCompare company’s performance relative to competitors

Identify areas for improvementIdentify areas for improvement

Track trends to determine if changes result in Track trends to determine if changes result in improvementsimprovements

Our Gold Standards are the foundation of The Ritz-Carlton Hotel Company, L.L.C. They encompass the values and philosophy by which we operate and include:

The CredoThe MottoThe Three Steps of ServiceService ValuesThe 6th DiamondThe Employee Promise

Gold Standards

the first and only hotel company twice honored with the MBNQA award

The Ritz-Carlton Hotel

Motto

Three Steps Of Service•A warm and sincere greeting. Use the guest's name. •Anticipation and fulfillment of each guest's needs. •Fond farewell. Give a warm good-bye and use the guest's name.

•At The Ritz-Carlton, our Ladies and Gentlemen are the most important resource in our service commitment to our guests.

•By applying the principles of trust, honesty, respect, integrity and commitment, we nurture and maximize talent to the benefit of each individual and the company.

•The Ritz-Carlton fosters a work environment where diversity is valued, quality of life is enhanced, individual aspirations are fulfilled, and The Ritz-Carlton Mystique is strengthened.

The Employee Promise