Customer Focus

dr. Ahmad Nurhadi

Customer Satisfaction & Engagement
• Customer satisfaction = the result of delivering a prod­uct or service
that meets customer requirements
• Customer satisfaction drives profitability
• Although satisfaction is important, organizations need to look further.
First, they must avoid creating dissatisfied customers because of
product or service failures. Second, they must try to develop loyal
customers. However, poor service can easily cause disloyalty

• Customer Engagement = customers’ investment in or commitment to

a brand and product offerings
High customer engagement leads to:
• customer retention and loyalty,
• customers’ willingness to make an effort to do business with the
organization, and
• customers’ willingness to actively advocate for and recom­mend the
brand and product offerings.
Customer engagement
• Customer engagement can be enhanced through good communication, such as
asking customers about good and bad experiences with products and services;
involving customers in online communities such as Facebook; and even sharing
stories with customers about the organization and its employees to build emotional
connections.
• Innovations such as virtual reality and chatbots are other means of engaging
customers.
• Audi, for instance, provides virtual reality headsets to show technology inside the
car and even see what the car would look like on the moon.
• Chatbots use artificial intelligence to simulate a text-based conversation with a
person.
• Healthcare and banking have been among the early adopters of this technology.
American Customer Satisfaction Index
Identifying Customers
• The first step in being customer focused is to understand who your
customers are
Identifying Customers
• internal customer = Within an organization, the recipi­ent of another’s
output (which could be a product, service, or information)
• external customers = those who fall between the organization and the
consumer, but are not part of the organization

• Identifying customer–supplier relationships begins with asking some

fundamental questions:
• 1. What goods or services are produced by my work?
• 2. Who uses these products and services?
• 3. Who do I call, write to, or answer questions for?
• 4. Who supplies the inputs to my process?
Customer Segmentation
• organizations that segment customers into natural groups and customize
the products or services are better able to respond to customers’ needs.
• Segmentation allows a company to prioritize customer groups, for instance
by consider­ing for each group the benefits of satisfying their requirements
and the consequences of failing to satisfy their requirements.
• There are many different ways to approach customer segmentation.
Customer seg­mentation might be based on geography, demographic factors,
ways in which products are used, volumes, or expected levels of service
• Segmentation helps an organization to align its internal processes according
to the most important customer expectations or their impact on
shareholder value
Customer Segmentation
• Juran suggested classifying customers into two main groups: the vital
few and the useful many.
• For example, organizers of conventions and meetings book large
blocks of hotel rooms and have large catering needs. They represent
the vital few and deserve special attention on an individual basis.
• Individual travelers and families are the useful many and typically
need only standardized attention as a group.
Understanding Customer Needs
• Organizations first need to understand the drivers of customer
satisfaction—what do customers want or expect from our goods and
services?
• For example, customer expecta­tions for a restaurant would include
good food, attentive service, a comfortable atmo­sphere, and accurate
bills; a credit card user might have the following expectations:
• 1. Applying for an Account: Accessible, responsive, accurate, and professional
• 2. Using the Card: Easy to use and hassle free, features, reasonable fees, and
credit limits
• 3. Billing: Accurate, timely, and easy to understand
• 4. Customer Service: Accessible, responsive, and professional
Quality Dimension of Good and Services
• 1. Performance
• 2. Features
• 3. Reliability
• 4. Conformance
• 5. Durability
• 6. Serviceability
• 7. Aesthetics
five principal dimensions that contribute to
customer perceptions of quality services
• 1. Reliability
• 2. Assurance
• 3. Tangibles
• 4. Empathy
• 5. Responsiveness
Kano Model of Customer Requirements
• 1. Dissatisfiers (“must haves”):
• Basic requirements that customers expected in a product or service. In an automobile,
a radio, heater, and basic safety features are examples, which are generally not stated
by customers but assumed as given. If these features are not present, the customer is
dissatisfied.
• 2. Satisfiers (“wants”):
• Requirements that customers expressly say they want. Many car buyers want a
sunroof, satellite radio, or navigation system. Although these require­ments are
generally not expected, fulfilling them creates satisfaction.
• 3. Exciters/delighters (“never thought of ”):
• New or innovative features that customers do not expect or even anticipate, such as
separate rear-seat video controls that allow chil­dren to watch DVD movies, or wi-fi
capabilities in a car, but love once they have them.
Gathering the Voice of Customers
• Comment Cards and Formal Surveys: Comment cards and formal surveys are easy ways to
solicit customer information.
• Focus Groups: A focus group is a panel of individuals (customers or non-customers) who
answer questions about a company’s products and services as well as those of competitors.
• Direct Customer Contact: In customer-driven organizations, top executives com­monly visit
with customers personally.
• Field Intelligence: Any employee who comes in direct contact with customers, such as
salespeople, repair technicians, telephone operators, and receptionists, can obtain useful
information simply by engaging in conversation and listening to customers.
• Complaints: Complaints, although undesirable from a service point of view, can be a key
source of customer information.
• Internet and Social Media Monitoring: The Internet and social media such as Face-book
offer organizations a fertile arena for finding out what consumers think of their products.
Analyzing Voice of the Customer Data
• One useful tool for organizing large volumes of information efficiently
and identifying natural patterns or groupings in the information is the
affinity diagram
LINKING CUSTOMER NEEDS TO DESIGN,
PRODUCTION, AND SERVICE DELIVERY
BUILDING A CUSTOMER-FOCUSED
ORGANIZATION
• Creating a customer-focused organization takes hard work and
discipline. It must be built on good policies, good people, and good
processes.
• Customer-focused organiza­tions focus on four key processes:
• 1. Making sincere commitments to customers
• 2. Ensuring quality customer contact
• 3. Selecting and developing customer contact employees
• 4. Managing complaints and service recovery
Customer Commitments
• Organizations that truly believe in the quality of their products make
sincere commit­ments to their customers. Effective commitments
address the principal concerns of customers, are free from conditions
that might weaken customers’ trust and confi­dence, and are
communicated clearly and simply to customers.
• A customer commit­ment might be as simple as guaranteeing that
your call or e-mail inquiry will be returned promptly.
Customer Contact and Interaction
• Customers interact with organizations in • Think of purchasing some product. A
many different ways. Every interaction customer’s experience will generally follow this
between a customer and the organization cycle:
—whether it be face-to-face with a • 1. When a customer recognizes a need, he or
salesperson or cus­tomer service she typically will go online to gather
representative or online on a website—is information.
called a moment of truth. • 2. Then the customer compares a potential
product to alternatives and competitive
• Dur­ing moments of truth, customers form offerings.
perceptions about the quality of the
• 3. After purchasing the product, the customer
service by comparing their expectations
starts to use it.
with the actual outcomes.
• 4. Finally, after some period of use, customers
• Thus, customer satisfaction or often provide formal (e.g., online ratings and
dissatisfaction takes place during posts) or informal (word of mouth) comments.
moments of truth.
Customer contact requirements
• Customer contact requirements are measurable performance levels
or expectations that define the quality of customer contact with an
organization.
• These expectations might include technical requirements such as
response time (answering the telephone within two rings or shipping
orders the same day), or behavioral requirements (using a customer’s
name whenever possible).
Selecting and Developing Customer Contact
Employees
• Customer-contact employees are particularly important in creating
customer satisfaction as they often are the only means by which a
customer interacts with an organization.
• Businesses must carefully select customer contact employees, train
them well, and empower them to meet and exceed customer
expectations.
• Next, organizations must train them. For many organizations,
customer relationship training involves every person who comes in
contact with customers.
Service Recovery and Complaint
Management
• Service recovery is a vital element to maintaining customer relationships.
• Customer-focused organizations consider complaints as opportunities for improve­ment.
• Encouraging customers to complain, making it easy for them to do so, and effectively
resolving complaints increases customer loyalty and retention.
• In dealing with complaints, employees need to listen carefully to determine the cus­
tomer’s feelings and then respond sympathetically, ensuring that the complaint is
under­stood. They should make every effort to resolve the problem quickly.
• To improve products and processes effectively, organizations must do more than simply
respond to a customer’s complaint. They need a systematic process for collecting
andanalyzing complaint data and then using that information for improvements.
• Starbucks’ Service Recovery process is Listen, Acknowledge, Take action, Thank the
person, and Encourage to return—appropriately known by LATTE
MANAGING CUSTOMER
RELATIONSHIPS
• Excellent organizations foster close relationships with customers that
lead to high levels of satisfaction and loyalty.
• Customer relationships can be fostered through:
• strategic partnerships and alliances
• using technology
to facilitate better communication with customers and linkages to
internal operations.
Strategic Partnerships and Alliances
• Today’s suppliers are being asked to take on greater responsibilities to
help their customers.
• As organizations focus more on their core competencies—the things
they do best—they are looking outside their organizations for
assistance with noncritical support processes.
• Customer–supplier partnerships—long-term relationships
characterized by teamwork and mutual confidence—represent an
important strategic alliance in achieving excellence and business
success.
Customer-Focused Technology and Analytics
• Technology can greatly enhance an organization’s ability to leverage customer-related
information and provide improved customer service.
• Technology and analytics are key enablers of customer relationship management (CRM)
software, which is designed to help organizations increase customer loyalty, tar­get their
most profitable customers, and streamline customer communication processes. A typical
CRM system includes market segmentation and analysis, customer service and
relationship building, effective complaint resolution, cross-selling goods and services,
order processing, and field service.
• CRM systems provide a variety of useful operational data to managers, including the
average time spent responding to customer questions, comments, and concerns; average
order tracking (flow) time; total revenue generated by each customer (and sometimes
their family or business) from all goods and services bought by the customer; and the total
picture of economic value of the customer to the firm, cost per marketing cam­paign, and
price discrepancies.
CRM
• CRM helps firms gain and maintain competitive advantage by:
• Segmenting markets based on demographic and behavioral characteristics
• Tracking sales trends and advertising effectiveness by customer and market
segment
• Identifying which customers should be the focus of targeted marketing
initiatives with predicted high customer response rates
• Forecasting customer retention (and defection) rates and providing feedback
as to why customers leave a company
• Studying which goods and services are purchased together, leading to good
ways to bundle them
• Studying and predicting which Web characteristics are most attractive to
customers and how the website might be improved
MEASURING CUSTOMER
SATISFACTION AND ENGAGEMENT
• Customer feedback is vital to a business. Through feedback, a company learns how satis­fied
its customers are with its products and services and sometimes about competitors’ products
and services.
• An effective customer satisfaction measurement system results in reliable information about
customer ratings of specific product and service features and about the relationship between
these ratings and the customer’s likely future market behavior.
• Customer satisfac­tion and engagement measurement allows an organization to do the
following:
• 1. Discover customer perceptions of how well the organization is doing in meeting customer needs, and
compare performance relative to competitors.
• 2. Identify causes of dissatisfaction and failed expectations as well as drivers of delight to understand
the reasons why customers are loyal or not loyal to the company.
• 3. Identify internal work process that drive satisfaction and loyalty and discover areas for improvement
in the design and delivery of products and services, as well as for training and coaching of employees.
• 4. Track trends to determine whether changes actually result in improvements.
MEASURING CUSTOMER
SATISFACTION AND ENGAGEMENT
• Customer satisfaction measures may include : • Businesses often rely on third par­ties to
• product attributes such as :
• product qual­ity
conduct blind surveys to determine who
• product performance key competitors are and how their
• Usability products and services compare.
• maintainability;
• service attributes such as : • Competitive comparisons often clarify
•
•
attitude
service time
how improvements in quality can
• on-time delivery translate into better customer
• exception handling satisfaction or whether key quality
• accountability
• technical support;
character­istics are being overlooked.
• image attributes such as : • It is important to understand that
• reliability
• price customer satisfaction is a psychological
• overall satisfaction measures. attitude. It is not easy to measure, and
• Compari­sons with key competitors can be especially can only be observed indirectly.
insightful.
Designing Satisfaction Surveys
• The first step in developing a customer • The next issue to address is who should conduct
satisfaction survey is to determine its the survey. Independent third-party organizations
purpose; often have more credibility to respondents and
can ensure objectivity in the results.
• that is, what research questions does the • Next, we must select the appropriate survey
organization want to answer? Surveys instrument. Formal written surveys by mail used
should be designed to clearly provide the to be the most common means of measuring
users of the survey results with the customer satisfaction; today, these are being
information they need to make decisions. replaced by web surveys because of their
• Surveys should focus on information that is convenience and low cost. Other techniques,
such as face-to-face interviews, telephone
a “must have,” not simply “nice to have.” interviews, and focus groups are also occasionally
• A critical issue to consider is “Who is the used. Written and web surveys have the
customer?” Managers, purchasing agents, advantage of low data collection costs, self-
end users, and others all may be affected by administration, and ease of analysis; when used,
a company’s products and services. they should be kept short and simple.
Designing Satisfaction Surveys
• Customer satisfaction surveys are difficult • The types of questions to ask in a
to design properly, and you can find many survey must be properly worded to
examples of poor and ineffective surveys at achieve actionable results.
many restaurants and retailers.
• Some surveysare too long; others are too • By actionable, we mean that
short. It is important to choose carefully the responses are tied directly to key busi­
ques­tions that matter the most to ness processes, so that what needs to
customers. be improved is clear; and information
• One should avoid leading questions, can be trans­lated into cost/revenue
compound questions that address more implications to support the setting of
than one issue or idea, ambiguous improvement priorities.
questions, acronyms and jargon that the
respondent may not understand, and • A “Likert” scale is commonly used to
double negatives. measure the response.
Likert Scale
Analyzing and Using Customer Feedback
• Deming stressed the importance of • Good customer satisfaction
using customer feedback to improve measurement identifies processes
a company’s pro­ducts and processes that have high impact on
• By examining trends in customer satisfaction and distinguishes
satisfaction measures and linking between low performing processes
satisfaction data to its internal and those that are performing well.
processes, a business can see its • One way to evaluate customer
progress and areas for improvement. satisfaction and use it effectively is
Someone must have the
to collect information on both the
responsibility and accountability for
developing improvement plans based
importance and the performance
on customer satisfaction results. of key quality charac­teristics.
Why Many Customer Satisfaction Efforts Fail
• 1. Poor measurement schemes. Just tracking the • 4. Lack of comparison with leading
percentage of “satisfied and very satis­fied” competitors. Quality and perception of quality
customers on a five-point Likert scale provides little is rela tive. Without appropriate comparative
actionable information. data, competitors may be improving much
• 2. Failure to identify appropriate quality dimensions. faster than an organization realizes.
Many surveys address issues the company thinks are
important, not what customers think. This error • 5. Failure to measure potential and former
results from a lack of capturing reliable information customers. Without an understanding of why
about customer needs and expectations. non-customers do not do business with a
• 3. Failure to weight dimensions appropriately. Even company, or more importantly, why customers
if organizations measure the right things, they may leave, an organization risks losing market share
not understand which dimensions are important. As to competitors and may be headed for demise.
a result, they spend too much effort on dimensions • 6. Confusing loyalty with satisfaction.
with the lowest scores that may not be impor­tant to
Customer retention and loyalty provide an indi­
the customers. Use of techniques such as
importance/performance analysis can help focus cation of the organization’s future; satisfaction
attention toward the key dimensions. only relates to the present.
Measuring Customer Loyalty
• Commonly used factors to
measure customer loyalty are:
• Overall satisfaction
• Likelihood of a first-time
purchaser to repurchase
• Likelihood to recommend
• Likelihood to continue
purchasing the same products
or services
• Likelihood to purchase
different products or services
• Likelihood to increase
frequency of purchasing
• Likelihood to switch to a
different provider
Reference :
• James R. Evans & William M. Lindsay, Managing for Quality and Performance Excelence 11e,
2020.
• Dorothea Wahyu Ariani, Manajemen Kualitas, 2021
• Tatang Ibrahim dan A. Rusdiana, Manajemen Mutu Terpadu, 2021
• Poornima M. Charantimath, Total Quality Management 3e, 2017
• Sunil Luthra, Total Quality Management : Principles, methods, and Appilcations, 2022.
• Timothy Adesanya Ibidapo, From Industry 4.0 to Quality 4.0 : An Innovative TQM Guide for
Sustainable Digital Age Business, 2022
• Novianty Djafri & Abdul Rahmat, Buku Ajar Manajemen Mutu Terpadu, 2017
• Joseph M. Juran & Joseph A. De Feo, Juran’s Quality Handbook : The Complete Guide to
Performance Excellence 6e, 2010.
• W. Edward Deming, The Essential Deming : Leadership Principles from the Father Quality, 2012
Rabbana Yassirlana Wala Tuassir
Rabbana Tamimlana bil Khoir
Wassalammu Alaikum Warahmatullahi Wabarakatuh