Importance of Customer Satisfaction

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In this presentation, we will discuss the importance of developing and maintaining a healthy customer relationship. Understanding customer psychology, knowing what customers want and customer retention are valued as an integral part of a successful business.
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Importance of Customer Satisfaction

  1. 1. Chapter 2 The importance ofCustomer Satisfaction
  2. 2. Objectives• Why is Customer service essential• Understanding customer service in the market• Measuring customer satisfaction
  3. 3. Introduction• The key to customer retention in India is good customer service• It is vital to ensure that the customer loyalty programs are an integral part of the organization
  4. 4. Statistics for customerretention• Repeat customers spend 33% more than new customers.• Referrals among repeat customers are 107% greater than new customers• It costs 6% more to sell something to a prospect than to sell that same thing to a customer
  5. 5. Why customer servicematters• India loses Rs. 11,640 Crores (Rs. 116.4 Billion) in revenue because of poor customer service• Businesses in India, Australia and New Zealand suffer significant losses because of poor customer service over the web
  6. 6. Why customer servicematters• Out of the 1,500 people surveyed most of the people could not reach the call center• In India, 56% people discontinued because of poor customer relationship
  7. 7. Why customer servicematters• The higher the income levels the service expectations are higher• Customer service is as much part of building the brand as is advertising
  8. 8. Understanding customersatisfaction in the market• At the heart of the LVMH’s business model is a well thought of process for creating and growing star brands• A star brand has to be built for eternity
  9. 9. Understanding customersatisfaction in the market• Timelessness takes years even decades to develop. Such a brand must have come to stand for something in the eyes of the world• Profitability depends on the price and the cost incurred
  10. 10. Understanding customersatisfaction in the market• LVMH realizes that in the case of the luxury brands, the innovation supporting the creative process and the advertising are very expensive• The manufacturing process is carefully planned and executed with the help of modern technology
  11. 11. Understanding customersatisfaction in the market• The Boulogne multicolor which sells for $1500, illustrates how LVMH coordinates its operations• The prototype went directly from the marketing department to the top executives
  12. 12. Understanding customersatisfaction in the market• When LVMH opened in Delhi, It found strong demand for premium and aspirational products• Super rich in the world have similar lifestyles – LVMH’s experience
  13. 13. Understanding customersatisfaction in the market• LVMH planned it’s entry carefully in the Indian market• The company closely monitored Indians who were buying abroad
  14. 14. Customer service initiativesof MHFC• MHFC combines the advantage of a bank and MFI in one equity• It has tied up with several low cost developers for projects in Maharashtra
  15. 15. Customer service initiativesof MHFC• Critics of the MFI model highlight it’s inherent fallacies• People in dire straits are well-informed and rational economic actors
  16. 16. Measuring CustomerSatisfaction• Measurement of customer satisfaction is a new significant addition to the new ISO9000: 2000 Standard
  17. 17. Measuring CustomerSatisfaction• There is a strong link between customer satisfaction and retention• There is a lot of debate and confusion about what exactly is required and how to go about it
  18. 18. What do Customers want• It is important to develop a clear understanding of what exactly a customer wants• Customer expectations are of 2 types – Expressed and Implied
  19. 19. What do Customers want• Expresses customer expectations – written down and agreed upon by both the parties• Implied customer expectations – not written or spoken but expected
  20. 20. What do Customers want• There are many reasons why the customer expectations are likely to change over time• The customer is always right. The suppliers job is to provide the customer what he wants, when he wants it
  21. 21. What constitutes Satisfaction• Major attributes of customer satisfaction can be summarized as:• Product quality• Product packaging• Price
  22. 22. What constitutes Satisfaction• What are the tools?• Customer expectations can be identified using various methods such as:• Periodic review contracts• Market research• Personal visits
  23. 23. What constitutes Satisfaction• What are the tools?• Depending upon the customer base and the available resources, we can choose the most effective measures in customer perceptions measurement
  24. 24. Customer SatisfactionSurveys• Formal surveys have emerged as the best method to periodically assess the customer satisfaction• The surveys are not marketing tools but an information gaining tool
  25. 25. Customer SatisfactionSurveys• There is no point in asking irrelevant questions on a customer satisfaction questionnaire• Priorities for improvement should be one of the objectives of the satisfaction measurement
  26. 26. Customer SatisfactionSurveys• The survey forms should be easy to fill out with the minimum amount of time and efforts• The data should be sufficiently reliable for management decision-making
  27. 27. Customer SatisfactionSurveys• Space should always be provided for the customer’s own opinion• The respondents must be provided a way to express the importance they attach to various survey parameters
  28. 28. Customer SatisfactionSurveys• Typical questions for product performance can be grouped together like:• Quality of the product• Consistency of the product• Price of the product
  29. 29. Customer SatisfactionSurveys• Typical questions for competitor performance can be grouped together like:• Adherence to the delivery schedule• Quality of the product• Cost of the product
  30. 30. Customer SatisfactionSurveys• It is often found that there are dismal responses from the customer• Electronic mailing of the surveys are a good option as the customers can fill and send the questionnaire quickly
  31. 31. Analysis• The customer’s requirements must be translated and quantifies into measureable targets• This provides an easy way to monitor improvements and to in turn improve the customer satisfaction
  32. 32. Performance Matrix• The average of the weightings and the scores given by the customer on each of the parameters are plotted on a scatter graph• The customer satisfaction index represents the overall satisfaction level of the customer
  33. 33. Performance Matrix• The bias due to individual perception needs to be accounted for, since the surveys are taken from one organization• We need to calculate average of all the weightings
  34. 34. Performance Matrix:Parameters• P Weighting• A Score• B Weighting (avg. of 1)• C Weighting (avg. of 1) * Score• D = B*C
  35. 35. Performance Matrix• Customer satisfaction can be expresses as a single number that tells the customer where he stands today• It is far less costly to keep existing customers than to win new ones
  36. 36. Performance Matrix• A supplier should keep improving so as to achieve a greater profitability• A simple tool is to take the customer satisfaction surveys and analyze the customer’s feedback
  37. 37. Responsibilities of theOrganization• The Organization is responsible for providing superior support in all aspects of purchasing products:• All pre-order entry qualifications• Responsible for providing direction• Coaching and development of regional order management teams
  38. 38. Key responsibilities• Ensure that all orders are entered into the order management systems in accordance to the set processes• Ensure that issues are escalated to the appropriate authorities and seek closure in a timely order• Builds and maintains customer relationships specific to regions
  39. 39. Key responsibilities• Execute all month and quarter end activities flawless• Documents, policies and procedures based on expertise in specific job areas• Provide other services or perform activities specific to the assigned region(s)
  40. 40. Key responsibilities• Schedule and perform quarterly business reviews onsite with channel partners to review and to drive operations improvement• Draw on to others support resources to drive performance improvement for the assigned regions(s)
  41. 41. Key responsibilities• Perform all people management duties including recruiting, staff, development, team-building and performance reviews• Participate in all other projects and initiatives as determined by the organization
  42. 42. HCL – Case Study• HCL announced the launch of ‘HCL TOUCH’, its 24*7 round the clock, service and support for its leaptop customers• ‘HCL Touch’ sets a new benchmark for laptop service in the country
  43. 43. HCL – Case Study• HCL offers round the clock service to leaptop customers across India• The support is offered in 11 different regional languages
  44. 44. HCL – Case Study• The HCL service is backed up by several other initiatives such as the SMS request service• The landmark laptop service will be delivered through India’s largest IT Service and support network
  45. 45. HCL – Case Study• “Customer has always been at the core of the HCL’s business with the customer care services as a top priority” – Ajai Choudhary – Chairman and CEO, HCL.
  46. 46. Eureka Forbes – Case Study• In a bid to enhance its customer services – Eureka Forbes will be launching the ‘Automatic dust tracker’ initiative• The ‘Automatic dust tracker’ measures the exact amount of dust in the nook and corners of our houses
  47. 47. Eureka Forbes – Case Study• The main objective behind this move is to build an everlasting relationship with the customers• This initiative would make the customers friends for life by meeting all their health requirements
  48. 48. Eureka Forbes – Case Study• Further Mr. Palekar informs that these results are based on research conducted at the company’s laboratories• On a daily basis the institute monitors the air pollution data
  49. 49. Eureka Forbes – Case Study• Eurosmile is the 24*7 virtual call center for customer response• The total sales force of the company is over 4000 people – Mr. Palekar
  50. 50. Eureka Forbes – Case Study• Eurosmile is the 24*7 virtual call center for customer response• The total sales force of the company is over 4000 people – Mr. Palekar
  51. 51. Titan – Case Study• Titan – a name which changed forever the way watches made in this country were seen by Indians and the world• Launched in 1987, Titan is credited to transforming the Indian watch industry
  52. 52. Titan – Case Study• Understanding the Indian consumer’s psyche has been vital to Titan reaching it’s current position of strength• The company today has a model for every price segment and every market
  53. 53. Titan – Case Study• Research reveals some interesting facts and figures:• The Indian market is estimated at 25 million watches a year• Titan is the runaway market leader• More men than women own watches in India
  54. 54. Titan – Case Study• It is the rural segment with this diverse market that Titan is now looking to tap• The company plans to change that with enhanced marketing and a different marketing strategy
  55. 55. Titan – Case Study• The Titan retail operations are a mix of company-owned and franchisee outlets• The company brings the brand to the customer in an appropriate setting through its showrooms
  56. 56. Titan – Case Study• The franchisee is a critical cog in the Titan retail mix• “The market is opening up, and the franchisee, after all, looking for what is more profitable” – Ajay Chawla
  57. 57. Titan – Case Study• The franchisee is a critical cog in the Titan retail mix• “The market is opening up, and the franchisee, after all, looking for what is more profitable” – Ajay Chawla
  58. 58. Titan – Case Study• Besides its franchisee and its own showrooms, Titan sells it products through other outlets as well• The service centers have been deliberately kept apart from the showrooms
  59. 59. Titan – Case Study• Titan’s blueprint for the future includes watches for the international heavy weights such as YSL, Christian Dior and Gucci• Titan is also planning to expand into categories like sunglasses and leather products
  60. 60. Indian Oil Corporation –Case Study• Indian Oil Corporation launched the IVSR in 33 Indane area offices for better services• The Indian oil – Citibank co-branded credit cards have reached a 1.48 Lakh membership in 2002
  61. 61. Indian Oil Corporation –Case Study• IOCL launched “Power plus fleet card” for transport fleet operators in association with Sundaram finance• The customer service initiative of IOCL is considered as one of the best from the public sector undertaking
  62. 62. End of Chapter 2 The importance ofCustomer Satisfaction

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