Chapter 5 customer satisfaction


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Chapter 5 customer satisfaction

  1. 1. Chapter 5 Customer SatisfactionService QualityThe definition of service as per the international standard, ISO 9000 follows: “The result generated, by activities at the interface between the organization and the customer nadby the organization’s internal activities, to meet customer needs”The result generated in the case of manufacturing is a product. However, in the case of service, it may be aproduct or may not be a product. For instance an organization supplying electricity to a household is aservice organization. The objective is supplying electricity to a household for various purposes. In achievingits objective, the organization undertakes internal activities such as generation, transmission anddistribution, so that the power is available at the customer’s doorsteps. The customer could only benefit fromthe presence of electric power, but not see it of feel it! Thus, definitely electric power is an intangibleproduct, provided as a service by the electric provider.Example of service providers Colleges, schools, internet cafe, hospitals, restaurants, hotels, banks, government departments,transport organization, insurance agencies, chartered accountants, publishers, software organizations,telecommunication service, real estate agencies, security services, house-keeping services, taxi services,training organization, test laboratories etc.Customer DelightBusiness thrives on customers. Customers are the very reason for being in business. Profits can be reaped only if an organizationhas customers who will pay for the products or services on a continuing basis. It depends on the ability ofthe entrepreneur to get into the right areas of business for success. In fact, successful entrepreneurs arethose who create a market of their own.Customer attrition Some organization may be able to attract new customers, but existing customers may leave. It isrelevant to recall an old saying in this context. “If a product is good then the customer will come back again;if not, the product will come back (returned)” Quite often the number of new customer may be much more than the attrition of customers. Thismay give a false confidence that the customers are happy and the organization is doing well. Therefore, inorder to get a true picture, every organization has to find out, at any given time how many customers havebeen lost rather than how many customers they are serving at that time. The losing of a higher number of customer indicates falling standards with regard to quality ofservices provided. According to Tom Peters, the customers leave because of the following reasons: 15% because of quality problems 15% because of higher prices 70% did not enjoy doing business with the organizations.50 percent of problems are due to misunderstood requirements. One of the major problems in a service industry is identifying the real requirements of the customers.In many computer software development projects, 50 percent of defects are caused due to amisunderstanding of the requirements. This statistic may also apply to any other service industry. Thereforeevery effort should be made by the customer contact personnel, for identifying not only the stated, but also,the implied customer requirements
  2. 2. Contractual and Non-contractual requirements of customers Customer satisfaction has to be analyzed, with regard to both contractual and non-contractualrequirements of the customers.The contractual requirements could include the following parameters • Quality: service/product characteristic • Time schedule for delivery • Price • Services such as responsibility for installation, service during warranty and post warranty, etc. • Documentation support • Training supportThe non-contractual expectations include the following parameters: • Quality (not documented before) • Implied requirements • Value spent for money • Environment of conducting business and the friendliness of the customer service personnel of the organization etc.Customer Service Attributes (COMFORT)C for Caring. The customer service employees should not only be, but perceived to very interested infinding out the real needs of the customer and help them to buy what they really intend to buy, product orservice. They should not drive away customers. They should also be ready to answer, both the relevant andirrelevant queries and go out of the way to help customers in solving their problems.O for Observant. Each customer service personnel should be a good observer. The customer contactperson should pay attention to the body language of the customers and should also be able to read theirrequirementsM for Mindful. The customer contact employees have to remember that the organization is dependent onits customer. The organization has to strive to meet the customer needs. In the service industry, thecustomer is always late. This is true in every service organization. At the same time, the serviceorganization may not be able to complete the job immediately due to genuine reasons. However, theurgency of the customer has to be considered. They should give importance to the requirements of thecustomer even if the request was received very late.F for Friendly. The customer service employees have to be friendly with customers. At times, if thecustomers or their representatives are not very friendly, then, such situations have to be tactfully handled bythe customer service employees.O for Obliging. The organization should feel obliged that the customer has visited them with an enquiry. Itmay so happen that the customer may not be serious about giving a business. He may just be comparingthe price for a job already finalized with some other provider.R for Responsible. While the proposals are being submitted, the organization should feel responsible forsuccessfully accomplishing the proposal if accepted by the customer. It is better to subject the proposals for“contract review” before sending. The contract review should not be an obstacle for innovative ideas and itshould not cause delay.T for Tactful. The customer is supreme. But this does not mean that they cannot be wrong. Theorganization should tactfully handle such situation. Whatever is asked for after a contract is signed shouldincur additional cost. In a service organization, generally, the customers would demand that the job should
  3. 3. be completed in a very short time. In such situations, the customer contact employees should explain indetail how much time is really required for providing the service. Tactful handling of customers will make thecustomers understand and cooperate in completing the jobs successfully.THE KANO MODELIn the late 1970s, Dr Nariaki Kano of Tokyo Rika University came out with an interesting and practical modelfor understanding customer satisfaction, known as the Kano Model. He developed the model fromHertzberg’s Motivator-Hygiene Theory. Generally, Quality is considered to be one dimensional in nature asgiven in fig 5.1 Performance Bad Good Customer Satisfaction Bad Good One Dimensional models for qualityWhen we measure the performance of a product, we rate them as good or bad. Similarly, when we rate thesatisfaction of the customer, we rate them as good or bad. This one dimensional quality model.Dr. Kano proposed the two dimensional model for quality. In Kano’s Model, there aretwo axes as given in fig5.2 Satisfaction Good x Performance y Two Dimensional Quality Model The x axis represents the performance of the product or service or degree of implementing theproduct function. On the x axis extreme left point indicates that the product function is absent. On theextreme right point, the product function is fully implemented. The y axis represents the level of customer satisfaction. On the top-most point, the customer ishighly satisfied; on the bottom-most the customer satisfaction is quite low.Customer Satisfaction Excitement Quality absent Product Function fully implemented Performance Quality Threshold (basic) Quality Low Kano Model
  4. 4. The above figure is the Kano Model for representing three levels of quality. There are three graphsin the plot and they represent three different quality levels. In fact, the graph is three types of responses of acustomer with regard to quality of a product or service- these are basic quality, performance quality andexcitement quality.Basic QualityThe basic quality is also called threshold quality. As the graph indicates, if the functions are notimplemented as agreed. Then the results in lower level of satisfaction as compared to higher level ofsatisfaction, when fully implemented. For instance, a buyer of automobile expects a vehicle to start easily, provide a safe drivingenvironment and be free from rattles and noises.Fulfilling the basic quality is measured by the following: • Customer complaints • Warranty data • Product recalls • Number of lawsuit • Things gone wrong • Other failure resultsThe basic quality represents unspoken or minimum expected requirementsPerformance QualityLook at the linear graph. This measures satisfaction proportionate to the performance of the product,performance quality attributes generally cause linear response. Increase levels of achievements causeincrease levels of satisfaction. The customer requirements for performance quality can be found from thecustomer surveys. This is also called voice of customer For instance, if three two-wheelers give a mileage of 40 kms, 60 kms and 80 kms per litre ofgasoline, then the satisfaction of the customer will be proportional to mileage. Similarly, if the performance is20 kms, then the customer will be dissatisfied. So a linear increase in customer satisfaction can be expectedin the performance quality.Excitement QualityThe third quality type is the excitement quality. Excitement is generated because the customer receivedsome feature or attribute that they did not expect or think of. Customers generally do not articulateexcitement attributes in customer survey, because they do not know that they want them. For instance, taxis in Mumbai providing free newspapers to passengers or an auto-rickshaw inChennai playing radio. However, very soon the excitement quality may become an expected quality.Therefore, organizations have to be continuously doing research in finding out what will excite thecustomers. Therefore, the organizations have to identify the following: • Basic features, which must be provided, which if not provided, will dissatisfy the customer • The features, which give linearly proportional customer satisfaction • The features that will excite the customers and exponential increase in customer satisfaction.
  5. 5. Customer FeedbackFeedback forms The most common method of obtaining feedback is by giving a response sheet or a feedback form tothe customers at the conclusion of every delivery process and seeking feedback.Confidentiality In order to get a true feedback, the feedback form should be kept confidential. Even where it is takenorally, the confidentiality of the feedback should be assured so as to get realistic feedback.Display resultsThe feedback data should be analyzed at regular intervals. The data collected could be converted intocharts like pie charts, bar charts and displayed in the organization’s notice board. The display of thefeedback is beneficial in two ways to the organization namely: 1. The customers come to know that their feedback is taken seriously by the organization 2. The employees in the organization know about where they really standComplaint resolution While feedback from customers is to be dealt with in an independent manner, the resolution ofcomplaint is to be handled by senior management personnel. It is also good to open a number of channelsfor feedback and complaints, such as suggestion box or nominating an authorized person independent ofproduction and customer contact to receive complaints or feedback The first task to be carried out in resolving complaints is their entry into the database or register ofcomplaints. This is essential for the following reasons: 1. To keep track of complaints 2. To carry out the root cause of analysis and take corrective action immediately so as to eliminate such problems in the future 3. To take preventive action 4. To find out the cost of poor quality and other statistical purposesAnalyze independently The complaint coordinator may designate a team or a person for studying the complaint thoroughlyand independently. The team should study complaint and verify what is true. The team should approachwith an open mind and try to analyze whether such a mistake could have occurred in their organization.Give benefit of doubt to customers Quite often, there may be variations in the statements made by the employees of the organizationand the customers. Such a situation should be handled tactfully and the team should be able to find out thetruth.Satisfying annoying customer If the organization is serving thousands of customers, there could be one or two customers who willbe creating problems for the organization unnecessarily. If the organization puts all its effort to curb it, then itwill be wasting its time. Therefore, it may be diplomatically handle the annoying customers and send themback as early as possible.Complaint recovery process. Each organization has to establish a process for receiving complaints, processing them,communicating to customer and resolving this issue. This is called a complaint recovery process. Thisprocess is aimed at satisfying customers, resolving problems and take preventive actions.