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Student Learning Objective 7

Appraise customer satisfaction using quantitative and qualitative methods.

Learning Objective B

Using Customer Feedback.

Slide 10: Customer Feedback

  • Customers (and their needs) continually change

  • Customer feedback must be continually solicited and monitored

  • Feedback enables the organization to:

  • Discover customer dissatisfaction

  • Discover relative priorities of quality

  • Compare performance with the competition

  • Identify customers' needs

  • Determine opportunities for improvement

Slide 11: Feedback Mechanisms

  • Comment cards

  • Surveys

  • Focus Groups

  • Toll-free telephone lines

  • Customer visits

  • Report cards

  • The Internet

  • Employee feedback

  • American Customer Satisfaction Index

Slide 12: Using Customer Complaints

  • Every single complaint should be accepted, analyzed and acted upon, for it represents the tip of the iceberg

  • "The average organization takes their customer base for granted, assuming that no complaints is good news."

  • Examine table 3--2 from Besterfield.

Survey of Dissatisfied Customers showing majority of customers complain to no one

Slide 13: Using Customer Complaints, cont.

  • A different survey showed that more than half of dissatisfied customers will buy again if they believe their complaint has been heard and resolved. Only one-fifth will buy again if their complaint is not heard

  • Studies have shown that the better the service at the point of sale, the fewer the complaints and the greater the sales volume

  • Employees who are dissatisfied with their organization are as noticeable as dissatisfied customers. It's just as important to focus on employee satisfaction as customer satisfaction.

Slide 14: Identifying Customer Needs

  • Presented in Goetsch and Davis

  • Prepared by Scholtes

  • Six-step strategy

    1. Speculate about the results

    2. Plan how to gather the information

    3. Gather the information

    4. Analyze the results

    5. Check the validity of your conclusions

    6. Take action as indicated

Slide 15: Customer Value Analysis

  • Presented in Goetsch and Davis

  • Customer Value analysis is the process used to determine what is important to customers

  • Process contains five steps:

    1. Determine what attributes customers value most

    2. Rate the relative importance of the attributes

    3. Assess your organization's performance relative to the prioritized list of attributes

    4. Ask customers to rate all attributes of your product/service against the same attributes of a competitor's product/service

    5. Repeat the process periodically

Slide 16: Customer Retention

  • Currently customer satisfaction is the critical component in customer retention, but the two factors are not necessarily synonymous.

  • Reichheld points out that "it may seem intuitive that increasing customer satisfaction will increase retention and therefore profits, the facts are contrary. Between 65 and 85 percent of customers who defect say they were satisfied or very satisfied with their supplier"

Slide 17: Customer Retention, cont.

  • Lowenstein (myth of customer satisfaction) "Conventional wisdom of business, academia, and the consulting community is that ...if satisfied, the customer will remain loyal. Reality proves that customer loyalty or retention is a more complex, yet more definitive indicator of quality performance"

  • Recommendation "To retain customers over the long term, organizations must turn them into partners and proactively seek their input rather than waiting for and reacting to feedback provided after a problem has occurred."

Slide 18: Customer Retention, cont.

  • High employee retention has a significant impact on high retention of customers. One way companies can manage customer retention is to pay attention to their present employees and to who they are hiring

Slide 19: Service Organizations

  • Historically quality improvement has been focused on manufacturing

  • Huge opportunities in service organizations

  • Strategies are harder to implement in service organizations

  • "Customer service is the set of activities an organization uses to win and retain customers' satisfaction. It can be provided before, during, or after the sale of the product or exist on its own."