Chapter 5 Customer Satisfaction

Service QualityThe definition of service as per the international standard, ISO 9000 follows:

“The result generated, by activities at the interface between the organization and the customer nad by the organization’s internal activities, to meet customer needs”

The result generated in the case of manufacturing is a product. However, in the case of service, it may be a product or may not be a product. For instance an organization supplying electricity to a household is a service organization. The objective is supplying electricity to a household for various purposes. In achieving its objective, the organization undertakes internal activities such as generation, transmission and distribution, so that the power is available at the customer’s doorsteps. The customer could only benefit from the presence of electric power, but not see it of feel it! Thus, definitely electric power is an intangible product, provided as a service by the electric provider.

Example of service providersColleges, schools, internet cafe, hospitals, restaurants, hotels, banks, government departments,

transport organization, insurance agencies, chartered accountants, publishers, software organizations, telecommunication service, real estate agencies, security services, house-keeping services, taxi services, training organization, test laboratories etc.

Customer Delight

Business thrives on customers.Customers are the very reason for being in business. Profits can be reaped only if an organization

has customers who will pay for the products or services on a continuing basis. It depends on the ability of the entrepreneur to get into the right areas of business for success. In fact, successful entrepreneurs are those who create a market of their own.

Customer attritionSome organization may be able to attract new customers, but existing customers may leave. It is

relevant to recall an old saying in this context. “If a product is good then the customer will come back again; if not, the product will come back (returned)”

Quite often the number of new customer may be much more than the attrition of customers. This may give a false confidence that the customers are happy and the organization is doing well. Therefore, in order to get a true picture, every organization has to find out, at any given time how many customers have been lost rather than how many customers they are serving at that time.

The losing of a higher number of customer indicates falling standards with regard to quality of services provided. According to Tom Peters, the customers leave because of the following reasons:

15% because of quality problems15% because of higher prices70% did not enjoy doing business with the organizations.

50 percent of problems are due to misunderstood requirements.One of the major problems in a service industry is identifying the real requirements of the customers.

In many computer software development projects, 50 percent of defects are caused due to a misunderstanding of the requirements. This statistic may also apply to any other service industry. Therefore every effort should be made by the customer contact personnel, for identifying not only the stated, but also, the implied customer requirements

Contractual and Non-contractual requirements of customersCustomer satisfaction has to be analyzed, with regard to both contractual and non-contractual

requirements of the customers.

The contractual requirements could include the following parameters Quality: service/product characteristic Time schedule for delivery Price Services such as responsibility for installation, service during warranty and post warranty, etc. Documentation support Training support

The non-contractual expectations include the following parameters: Quality (not documented before) Implied requirements Value spent for money Environment of conducting business and the friendliness of the customer service personnel of the

organization etc.

Customer Service Attributes (COMFORT)

C for Caring. The customer service employees should not only be, but perceived to very interested in finding out the real needs of the customer and help them to buy what they really intend to buy, product or service. They should not drive away customers. They should also be ready to answer, both the relevant and irrelevant queries and go out of the way to help customers in solving their problems.

O for Observant. Each customer service personnel should be a good observer. The customer contact person should pay attention to the body language of the customers and should also be able to read their requirements

M for Mindful. The customer contact employees have to remember that the organization is dependent on its customer. The organization has to strive to meet the customer needs. In the service industry, the customer is always late. This is true in every service organization. At the same time, the service organization may not be able to complete the job immediately due to genuine reasons. However, the urgency of the customer has to be considered. They should give importance to the requirements of the customer even if the request was received very late.

F for Friendly. The customer service employees have to be friendly with customers. At times, if the customers or their representatives are not very friendly, then, such situations have to be tactfully handled by the customer service employees.

O for Obliging. The organization should feel obliged that the customer has visited them with an enquiry. It may so happen that the customer may not be serious about giving a business. He may just be comparing the price for a job already finalized with some other provider.

R for Responsible. While the proposals are being submitted, the organization should feel responsible for successfully accomplishing the proposal if accepted by the customer. It is better to subject the proposals for “contract review” before sending. The contract review should not be an obstacle for innovative ideas and it should not cause delay.

T for Tactful. The customer is supreme. But this does not mean that they cannot be wrong. The organization should tactfully handle such situation. Whatever is asked for after a contract is signed should incur additional cost. In a service organization, generally, the customers would demand that the job should be completed in a very short time. In such situations, the customer contact employees should explain in

detail how much time is really required for providing the service. Tactful handling of customers will make the customers understand and cooperate in completing the jobs successfully.

THE KANO MODEL

In the late 1970s, Dr Nariaki Kano of Tokyo Rika University came out with an interesting and practical model for understanding customer satisfaction, known as the Kano Model. He developed the model from Hertzberg’s Motivator-Hygiene Theory. Generally, Quality is considered to be one dimensional in nature as given in fig 5.1

Performance

Bad Good

Customer Satisfaction

Bad Good

One Dimensional models for quality

When we measure the performance of a product, we rate them as good or bad. Similarly, when we rate the satisfaction of the customer, we rate them as good or bad. This one dimensional quality model.Dr. Kano proposed the two dimensional model for quality. In Kano’s Model, there aretwo axes as given in fig 5.2

SatisfactionGood

x

Performance

y

Two Dimensional Quality Model

The x axis represents the performance of the product or service or degree of implementing the product function. On the x axis extreme left point indicates that the product function is absent. On the extreme right point, the product function is fully implemented.

The y axis represents the level of customer satisfaction. On the top-most point, the customer is highly satisfied; on the bottom-most the customer satisfaction is quite low.

Customer Satisfaction Excitement Quality

absent Product Function fully implemented

Performance Quality Threshold (basic) Quality

Low

Kano Model

The above figure is the Kano Model for representing three levels of quality. There are three graphs in the plot and they represent three different quality levels. In fact, the graph is three types of responses of a customer with regard to quality of a product or service- these are basic quality, performance quality and excitement quality.

Basic Quality

The basic quality is also called threshold quality. As the graph indicates, if the functions are not implemented as agreed. Then the results in lower level of satisfaction as compared to higher level of satisfaction, when fully implemented.

For instance, a buyer of automobile expects a vehicle to start easily, provide a safe driving environment and be free from rattles and noises.

Fulfilling the basic quality is measured by the following: Customer complaints Warranty data Product recalls Number of lawsuit Things gone wrong Other failure results

The basic quality represents unspoken or minimum expected requirements

Performance Quality

Look at the linear graph. This measures satisfaction proportionate to the performance of the product, performance quality attributes generally cause linear response. Increase levels of achievements cause increase levels of satisfaction. The customer requirements for performance quality can be found from the customer surveys. This is also called voice of customer

For instance, if three two-wheelers give a mileage of 40 kms, 60 kms and 80 kms per litre of gasoline, then the satisfaction of the customer will be proportional to mileage. Similarly, if the performance is 20 kms, then the customer will be dissatisfied. So a linear increase in customer satisfaction can be expected in the performance quality.

Excitement Quality

The third quality type is the excitement quality. Excitement is generated because the customer received some feature or attribute that they did not expect or think of. Customers generally do not articulate excitement attributes in customer survey, because they do not know that they want them.

For instance, taxis in Mumbai providing free newspapers to passengers or an auto-rickshaw in Chennai playing radio. However, very soon the excitement quality may become an expected quality. Therefore, organizations have to be continuously doing research in finding out what will excite the customers.

Therefore, the organizations have to identify the following: Basic features, which must be provided, which if not provided, will dissatisfy the customer The features, which give linearly proportional customer satisfaction The features that will excite the customers and exponential increase in customer satisfaction.

Customer Feedback

Feedback formsThe most common method of obtaining feedback is by giving a response sheet or a feedback form to

the customers at the conclusion of every delivery process and seeking feedback.

ConfidentialityIn order to get a true feedback, the feedback form should be kept confidential. Even where it is taken

orally, the confidentiality of the feedback should be assured so as to get realistic feedback.

Display resultsThe feedback data should be analyzed at regular intervals. The data collected could be converted into charts like pie charts, bar charts and displayed in the organization’s notice board. The display of the feedback is beneficial in two ways to the organization namely:

1. The customers come to know that their feedback is taken seriously by the organization2. The employees in the organization know about where they really stand

Complaint resolution

While feedback from customers is to be dealt with in an independent manner, the resolution of complaint is to be handled by senior management personnel. It is also good to open a number of channels for feedback and complaints, such as suggestion box or nominating an authorized person independent of production and customer contact to receive complaints or feedback

The first task to be carried out in resolving complaints is their entry into the database or register of complaints. This is essential for the following reasons:

1. To keep track of complaints2. To carry out the root cause of analysis and take corrective action immediately so as to eliminate

such problems in the future3. To take preventive action4. To find out the cost of poor quality and other statistical purposes

Analyze independently The complaint coordinator may designate a team or a person for studying the complaint thoroughly

and independently. The team should study complaint and verify what is true. The team should approach with an open mind and try to analyze whether such a mistake could have occurred in their organization.

Give benefit of doubt to customersQuite often, there may be variations in the statements made by the employees of the organization

and the customers. Such a situation should be handled tactfully and the team should be able to find out the truth.

Satisfying annoying customerIf the organization is serving thousands of customers, there could be one or two customers who will

be creating problems for the organization unnecessarily. If the organization puts all its effort to curb it, then it will be wasting its time. Therefore, it may be diplomatically handle the annoying customers and send them back as early as possible.

Complaint recovery process.Each organization has to establish a process for receiving complaints, processing them,

communicating to customer and resolving this issue. This is called a complaint recovery process. This process is aimed at satisfying customers, resolving problems and take preventive actions.