Customer Satisfaction

Why Customer Satisfaction?

 Customer is always right – in Japan customer is “King”
 “One customer, well taken care of, would be more valuable
than $10 000 worth of advertising”.
 Customer expectations constantly changing – 2 years ago
acceptable, now not any more!
 Delighting customers (Kano Model)
 Satisfaction is a function of total experience with
organization
 Must give customers a quality product or service,
reasonable price, on-time delivery, and outstanding service
 Need to continually examine the quality systems and
practices to be responsive to ever – changing needs,
requirements and expectations – Retain and Win new
customers TQM-module II-Dr.RP 28
 Customer satisfaction
customers
Company offer
Front-line
representatives
Functional
operational
areas
Senior Customer needs
managers
Customer satisfaction model –Teboul
CEO model

Customer satisfaction organizational

diagram TQM-module II-Dr.RP 29
 Who is the customer?

Customer/supplier chain

External customer – one who uses the product or service, the

one who purchases the product or service, or the one who
influences the sale of the product or service. Generally falls into
three categories: current, prospective & lost customers.
Internal customer – every person in the organization is
considered as a customer of the preceding operation.
TQM-module II-Dr.RP 30
Issues for customer satisfaction

TQM-module II-Dr.RP 31
 Customer perception of quality
Performance – Fitness for use
(i) Availability
(ii) Reliability
(iii) Maintainability
Features – secondary characteristics of a product/service
Service
Warranty – public promise of quality product
Price - greatest value
Reputation - Good experience are told to 6 people while bad
experience are repeated to 15 people
TQM-module II-Dr.RP 32
 Customer Feedback

To focus on customer, an effective feedback

program is necessary. Feedback enables the
organization to :

1. Discover customer dissatisfaction

2. Discover priorities of quality, price, delivery
3. Compare performance with competitors
4. Identify customers‟ needs
5. Determine opportunities for improvement
TQM-module II-Dr.RP 33
 Customer Feedback Tools/Method

 Comment card – one which is attached to the warranty card & included with the
product at the time of purchase (Low cost method).
 Customer Questionnaire - Telephone/Mail Surveys (costly & time consuming)
To make surveys more useful, it is best to remember eight points:
 Clients & customers are not the same
 Surveys raise customers‟ expectations
 How you ask a question will determine how the question is answered.
 The more specific the question, the better the answer
 You have only one chance & only 15 minutes.
 The more time you spend in survey development, the less time you will spend
in data analysis and interpretation.
 Who you ask is as important as what you ask.
 Before the data are collected, you should know how you want to analyse and
34
use the data. TQM-module II-Dr.RP
TQM-module II-Dr.RP 35
TQM-module II-Dr.RP 36
 Customer Feedback Tools/Method......
 Focus Group
A group of customers is assembled in a meeting room to answer a series of
questions.
A moderator probes into the participants‟ thoughts, ideas, perceptions, or comments.
Meetings are designed to focus on current, proposed, and future products and
services.
Imprint analysis is technique used to obtain the intrinsic feelings about
product/service (ICE CREAM COMPANY CASE).
 Toll-free Telephone numbers – used by atleast 50% of all
organizations with sales of atleast $10 million (MOBILE NETWORK CASES).
 Customer visits- an organisation can proactively monitor its product‟s
performance while it is in use and thereby identify any specific or recurring problems. (GM
& US steel case)

TQM-module II-Dr.RP 37
Customer Feedback Tools/Method....

Report card – usually

sent to each customer
on a quarterly basis
The data are analyzed
to determine areas of
improvement

TQM-module II-Dr.RP 38
 Customer Feedback Tools/Method....
The internet & computers- monitoring conversations
Employee feedback- untapped source of information ( CHRYSLER CASE)
Mass Customization – direct result of advances made in manufacturing ( car industries, Levi
jeans, Dell computers)

Unique configuration
Unique design or options
features
Customer‟s voice
Point of customer involvement (Product specifications)

Stages of the manufacturing process

Suppliers Customers
Design Fabrication Assembly Delivery

TQM-module II-Dr.RP 39
 Customer Feedback Tools/Method....
The American customer satisfaction index
1. Quantifies quality & customer satisfaction and relates them to
firms‟ financial performance
2. ACSI reports scores on a 0-100 scale at the national level.
3. ACSI looks at products sold in US & not just those produced.
4. Ten sectors of economy included are: Transportation &
warehousing, Manufacturing (nondurable), Healthcare and
social assistance, Accommodation and food service,
Information, public administration/government, Retail trade,
Finance and insurance , E-commerce.(Visit www.asq.org)

TQM-module II-Dr.RP 40
ACSI National scores

TQM-module II-Dr.RP 41
 Using customer complaints
Product Complain to
• From the survey conducted by ASQ of
MANAGE FRONT- NO-ONE
MENT LINE dissatisfied customers, only 1.5% took
time to complain to Management, about
AUTO 2% 21% 77%
20% took out their dissatisfaction to
MAIL 1% 22% 77% front-line people and almost 80% did
ORDER
nothing.
GROCERI 1% 15% 84%
ES

CLOTHIN 0% 13% 87%

• More than half of dissatisfied customers
G will buy again if they believe their
HOME 4% 21% 74%
complaint has been heard and resolved.
REPAIR Only 20% will buy again if they believe
APPLIAN 0% 12% 88%
their complaint has been heard and but
CES not resolved. Fewer than 10% will be
AUTO 1% 28% 71%
repeat buyers when a complaint is not
REPAIR heard.
42
TQM-module II-Dr.RP
 Handling Customer complaints……
Investigate customer‟s experiences by effectively soliciting feedback &
then act.
Develop procedures for complaint resolution- empowering front-line
personnel
Analyze complaints , but understand that complaints do not always fit
into neat categories
Identify and eliminate the root cause for process and material variation
Contact the customer and strive to resolve the concern
Establish customer satisfaction measures and constantly monitor them
Communicate complaint information- to all the people in the
organization
Send the complaint report to quality council
Try to identify the customers‟ expectations beforehand 43
TQM-module II-Dr.RP
 Service quality
Service quality, according to Parasuraman et al., is “the
degree of discrepancy between customers‟ normative
expectations for the service and their perceptions of the
service performance”.
According to ISO 9000- “The results generated, by
activities at the interface between the organization and the
customer and by the organization‟s internal activities, to
meet customer needs”
SERVQUAL - the most popular instrument for measuring
service quality. It aims to measure perceptions of service
across the five service quality dimensions: Tangibles;
Reliability; Responsiveness; Assurance; and Empathy.
TQM-module II-Dr.RP 44
 Elements of customer service
• Organization
• Customer care
• Communication
• Front-line people
• Leadership

TQM-module II-Dr.RP 45
 Elements of customer service…….

Organization
1. Identify each market segment
2. Write down the requirements Indian railways
&
3. Communicate the requirements banking system
4. Organize processes
5. Organize physical spaces

TQM-module II-Dr.RP 46
 Elements of customer service…….

Customer care
Meet the customer‟s expectations Ford- “it is not the employer
Get the customer‟s point of view who pays wages-he only
Deliver what is promised handles money. It is the
customer who pays the
Make the customer feel valued
wages”
Respond to all complaints
Over-respond to the customer
Provide a clean customer reception area

TQM-module II-Dr.RP 47
 Elements of customer service…….
Communication
optimize the trade-off between time and personal attention
minimize the no. of contact points
provide pleasant and enthusiastic employees
write documents in customer friendly language

User friendly website

IOMEGA- zip drives-increased
customer satisfaction to 40%

TQM-module II-Dr.RP 48
 Elements of customer service…….

Front-line people
Hire people who like people
Challenge them to develop better methods
Give them authority to solve problems Hotels,
Serve them as internal customers car-showrooms,
Be sure they are adequately trained Hospitals,
Recognize and reward performance Watch showrooms,
Cloth centres

TQM-module II-Dr.RP 49
 Elements of customer service……
Leadership
Lead by example
Listen to the front-line people
Strive for continuous process improvement
Abdul Kalam- visit to Siachen Laluprasad Yadav-
travel in second
class train
Vijay Mallaya – meet the
crew members & find how
services are provided
TQM-module II-Dr.RP 50
 Kano model
(Translating needs into requirements)

51
TQM-module II-Dr.RP
 Kano model
(Translating needs into requirements)

TQM-module II-Dr.RP 52
Voice of the customer

TQM-module II-Dr.RP 53
 Customer retention
Customer retention represents the activities that produce
the necessary customer satisfaction that creates customer
loyalty, actually improves the bottom line.
Customer retention moves customer satisfaction to the
next level by determining what is truly important to the
customers and making sure that the customer
satisfaction system focuses valuable resources on things
that really matter to the customer
High employee retention has a significant impact on
high customer retention
TQM-module II-Dr.RP 54
 Closing Thought

“This administration is dedicated to ensuring that

the resources entrusted to the federal government
are well managed and wisely used. We owe that to
the American people.”
President George W. Bush

TQM-module II-Dr.RP 55
Employee involvement (EI)
 Definition of EI
EI refers to any activity by which employees participate in work-
related decisions and improvement activities, with the objectives of
tapping the creative energies of all employees and improving their
motivation.
Strategies pertaining to EI:
 Motivation
 Empowerment
Teamwork
 Recognition & rewards
 Performance appraisal
TQM-module II-Dr.RP 57
 Motivation
PepsiCo CEO Indra Nooyi
Writes Letters To Her
Employees' Parents
Business Insider – Wed 29 Jan,
2014
"It dawned on me that all of my
executives who worked for me are
also doing a damn good job, but
I'd never told their parents what a
great job their parents had done
for them," Nooyi said. "I'd never
done that."
TQM-module II-Dr.RP 58
 MOTIVATION
Maslow’s Hierarchy of needs
Level 1- survival- provided by job
Level 2 –security – safe place to work
and job security
Level 3- social- our need to belong-
part of group will motivate
Level 4- esteem- pride & self worth-
seeking advice or input
level 5- self actualization- giving free
hand- policy of promoting
with in
TQM-module II-Dr.RP 59
 Herzberg‟s two-factor theory

Motivators Dissatisfiers or hygiene factors

1. Recognition 1. Low salary

2. Responsibility 2. Minimal fringe benefits
3. Achievement 3. Poor working condition
4. Advancement 4. Ill-defined policies
5. The work itself 5. Mediocre supervision

Dissatisfiers must be taken care of before

motivators can be actuated.
TQM-module II-Dr.RP 60
 What employees want?
Factor Employee rating Manager rating
Interesting work 1 5
Appreciation 2 8
Involvement 3 10
Job security 4 2
Good pay 5 1
Promotion/growth 6 3
Good working 7 4
conditions
Loyalty to employees 8 7
Help with personal 9 9
problems
Tactful discipline 10 6
61
TQM-module II-Dr.RP
 Achieving a motivated work force
1. Know thyself – Cummins India Ltd 360° feedback system for managers
2. Know your employees
3. Establish a positive attitude- respect & sensitivity towards others is
essential

4. Share the goals

5. Monitor progress
6. Develop interesting work- job rotation, enlargement and
enrichment
7. Communicate effectively
8. Celebrate success
TQM-module II-Dr.RP 62
 EMPOWERMENT
Satya Nadella, CEO, Microsoft.
“I came here because I
believed Microsoft was the
best company in the world. I
saw then how clearly we
empower people to do
magical things with our
creations and ultimately make
the world a better place”.

TQM-module II-Dr.RP 63
 Empowerment
Empowerment - means giving people authority - to
make decisions based on what they feel is right, have
control over their work, take risks and learn from
mistakes, and promote change.
Required conditions:
1. Everyone must understand the need for change
2. The system needs to change to the new paradigm
3. The organization must enable its employees

TQM-module II-Dr.RP 64
 TEAMS
A team is a group of people TYPES OF TEAMS
working together to achieve 1. Process improvement team
common objectives or goals. 2. Cross-functional teams
3. Natural work teams
Teamwork is the cumulative 4. Self-directed/self-managed
actions of the team during work teams
which each member of the 5. Virtual teams
team subordinates his 6. Quality circles
individual interests &
7. Problem solving teams
opinions to fulfill the
objectives or goals of the 8. Project teams
group.
TQM-module II-Dr.RP 65
The use of teams throughout an organization

TQM-module II-Dr.RP 66
 Characteristics of successful teams
 Sponsor- member of quality council-for effective liaison
 Team charter- a document that defines the team’s mission, boundaries, the
background of the problem and detailed information on roles.
 Team composition- should not exceed 10 members
 Training
 Ground rules- rules for operation & conduct
 Clear objectives
 Accountability - periodic status reports should be submitted to the quality
council

TQM-module II-Dr.RP 67
 Characteristics of successful teams…….

 Well defined decision procedures

 Resources
 Trust
 Effective problem solving
 Open communication
 Appropriate leadership
 Balanced participation
 Cohesiveness

TQM-module II-Dr.RP 68
 Team…
Team member roles Stages in Team formation

Team leader – elected by QC. Tuckman identified five

stages in the life of any
Facilitator – neutral assistant group:
Recorder – documentation work – Forming
Timekeeper – schedule – Storming
maintenance – Norming
Team member – Performing
– Adjourning

TQM-module II-Dr.RP 69
 The Stages.....
Forming
During the Forming stage, there is a period of uncertainty in which
members try to determine their place in the group and the rules and
procedures of the group
• Members get acquainted
• Know team purpose & boundaries
• Establish trust
• Achieve clarity of direction.
Storming
During the Storming stage, conflicts begin to arise as members resist the
influence of the group and rebel against accomplishing the task
 Members “fight” to stay together
 Learn to disagreements and manage conflict.
 Improve processes
 Recognizing team achievements
 Learn to achieve win/win relationships.
TQM-module II-Dr.RP 70
 The stages….
Norming
During the Norming stage, the group establishes cohesiveness and
commitment, discovering new ways to work together and setting
norms for appropriate behaviour
• create cohesion & unity
• Differentiate roles
• Identify expectations
• Enhance commitment
• Provide supportive feedback and foster commitment.
Performing
During the Performing stage, the group develops proficiency in
achieving its goals and becomes more flexible in its patterns of
working together
TQM-module II-Dr.RP 71
 The stages….
Performing:
• accomplish goals
• Achieve continuous improvement, innovation, speed, flexibility and competence.
• Encourage, sponsor and facilitate implementation of new ideas, extraordinary performance.

Adjourning
It is in this stage, where the teams work is brought to a close and
the members can celebrate what they have accomplished. It is a
time to evaluate what was done and how it was done. It‟s a good
time to determine what mistakes can be avoided in the future and
what things should be repeated.
• members can “celebrate” what they have accomplished

TQM-module II-Dr.RP 72
 Barriers to team progress
1. Insufficient training 6. Lack of union support
2. Incompatible rewards and 7. Project scope too large
compensation 8. Project objectives are not
3. First-line supervisor significant
resistance 9. No clear measures of
4. Lack of planning success
5. Lack of management 10. No time to do
support improvement work
6. Access to information 11. Team is too large
systems 12. Trapped in groupthink

TQM-module II-Dr.RP 73
 Recognition and Reward
Recognition is a form of employee motivation
in which the organization publically
acknowledges the positive contributions an
individual or team has made to the success of
the organization.
Delivered using verbal and written praise and may
include symbolic items such as certificates and plaques.
Pictures in bulletin board, articles in news letter, letters
to families, etc.
TQM-module II-Dr.RP 74
 Reward
Reward is something tangible such as a cash award to
promote desirable behavior, or dinner for two, or
gift tickets. Two different types of rewards are
individual & group rewards.
Reward should be appropriate to the improvement
level- the greater the improvement, the greater the
reward.
While reward may be delayed until an appropriate
time, the recognition should be on a timely basis.
TQM-module II-Dr.RP 75
 Rewards & recognition…..
Forms of recognition Forms of rewards
Framed certificates Individual rewards
Pictures on the bulletin board 1. Gift certificates
Articles in newsletters 2. Dinner out
Letter to families 3. Better parking space
Making a presentation to 4. Gift to charity in the name of
management employee
Personal phone calls & notes 5. Washing an employee‟s car
Placing positive notes in 6. Trips & event tickets
folders Group rewards
Increases responsibility 1. Ball game, bowling & movies
TQM-module II-Dr.RP 2. Group lunch or dinner 76
 Effective reward practices
Intrinsic awards Extrinsic rewards
Non – monetary forms of Profit sharing
recognition Gain sharing
Celebrations to acknowledge
Employment security
achievement
Regular expressions of Compensation time
appreciation Individual based
360° performance appraisal performance systems
Formal suggestion system Quality based performance
Developmental based appraisal
performance appraisal
Quality based promotions
77
TQM-module II-Dr.RP
 Reward for hard work….

Within six months of joining

iGATE as CEO, Ashok Vemuri
will get a performance bonus of $
175,000 (about Rs 1.10 crore) for
his strategic initiatives, which
helped the US-based outsourcer
grow revenues by over 10 per
cent in the December quarter
(2013).
TQM-module II-Dr.RP 78
 Summary on Recognition and
Reward
Serves as a continual remainder that the organization
regards quality and productivity as important.
Offers the organization a visible techniques to thank
high achievers for outstanding performance.
Provides employees a specific goal to work toward.
Boosts morale in the work environment

TQM-module II-Dr.RP 79
 Performance appraisal
Need for performance appraisal
To let employees know how they are doing
Provide basis for promotions, salary increases
and other purposes related to an employee‟s
future
To identify strength and weakness as well as
how performance can be improved

TQM-module II-Dr.RP 80
 Appraisal formats
Ranking - Compares employees by ranking form
highest to lowest.
Narrative- Gives written description of employee‟s
strengths and weakness
Graphic -Indicates the major duties performed by the
employee and rates each with a scale.
Forced choice -Places each employee in a category
with a predetermined percentage.

TQM-module II-Dr.RP 81
 Suggestions for improvement of performance
appraisal
Using rating scales that have few rating categories.
Require work team or group evaluations
Require more frequent reviews
Promotion decisions should be made by an independent
administrative process.
Include indexes of external customer satisfaction
Use peer and subordinate feedback as an index of
internal customer satisfaction
Include evaluation for process improvement in addition
to results TQM-module II-Dr.RP 82
 Benefits of EI
EI improves quality and increases productivity, because employees:
1. make better decisions using their expert knowledge of the process
2. more likely to implement & support decisions they had a part in
making
3. better able to spot and pinpoint areas for improvement
4. better able to take immediate corrective actions
5. reduces labour/management friction by encouraging more effective
communication & cooperation
6. increases morale by creating a feeling of belonging to the organization
7. better able to accept the change because they control the work
environment
8. have an increased commitment to unit goals because they are involved.
83
TQM-module II-Dr.RP