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Folder 1: Customer Satisfaction and Quality

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What is Quality

Achieving Continuous Quality Improvement

Why Quality Must be Measured

Why Consider Customers of Competitors

Exit Interviews & Huge Profit Increases


What is Quality?

The primary dimensions of product quality include:

Increasingly, however, service quality is attracting equal or more attention. These listed dimensions of product and service quality are, in a broad sense, generic to most situations. However, every business is unique, and if customer satisfaction measurements are to be meaningful, expectations should be phrased in the language of customers for each distinct market segment.

Also, some needs are more critical than others and it is wise to determine the relative importance of each need. After measuring satisfaction levels, emphasis can then be placed on improving performance in areas important to the customer but where the organization may be lacking in comparison to the quality delivered by competitors.

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Acheiving Continuous Quality Improvement

Continuous quality improvement begins by identifying customer expectations for all key "moments of truth" - the critical interactions customers have with the organization. This can include contact with, for example, internal support groups, collection individuals, sales representatives, management, or direct service providers.

The best way to understand customer expectations is to listen to customers using qualitative research techniques. This usually requires skillful probing by someone practiced in customer satisfaction measurement.

After identifying expectations, customer satisfaction can readily be measured.

However, this requires the customer to answer specific questions about how he or she feels about the company's performance. This is why it is so important to capture their interest and build the credibility needed to gain their cooperation. The task is made considerably easier by speaking the customer's language and presenting only issues that are truly significant.

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Why Quality Must be Measured

More and more, quality is being measured. Companies are coming to the conclusion that if they can measure it, they can manage it and, consequently, can improve it.

The best performing organizations are allowing customer expectations to drive their quality initiative. They recognize customers define quality by judging them in relation to competitors.

Organizations that constantly measure themselves in relation to competitors (Benchmarking) are able to quickly capitalize on their emerging strengths and address weaknesses before they become problems.

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Why Include Customers of Competitors

The rationale for including non-customer (customers of competitors) benchmarking is that without the non-customer data customer satisfaction levels are arbitrary. Both sets of data allow an organization to exploit its strengths, and put initiatives in place to narrow and eliminate any gaps between expectations and performance.

In fact, the best performing organizations benchmark themselves against:

Future measurements permit the organization to objectively assess how well the initiatives are working.

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How Exit Interviews
Can Translate into Huge Profit Increases

By measuring only customer satisfaction levels, organizations miss former customers who have left ... because they no longer had the need for, or were unhappy with the products or services being offered. Measuring customer retention, on the other hand, relates directly to the bottom line. Long term customers spend more, refer new clients and are less costly to do business with.

Ironically, past customers present every company with an opportunity. They can tell the organization exactly what parts of the business to fix in order to reduce the number of customers at risk. This improves customer retention and, subsequently, profitability.

An average organization loses about 15% of its customers every year. But if this can be reduced to 10%, bottom line profits improve 35% to 85%.

Finding out why customers leave can often be difficult since the majority of unhappy customers don't complain, they simply quit. Exit interviews solve this problem.

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