chapter 7 report
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CHAPTER 7
CUSTOMER SATISFACTION,RETENTION AND LOYALTY
BY: DAYAO, NIMIAHDE GUZMAN, SHEENA MARIE
ESTADILLA, CHRISTIAN ERIC
UNDERSTANDING WHO IS A CUSTOMER
Those who interact with the company prior to production have been considered as suppliers. And those who interact after the production process have been viewed as a customer.
In a total quality setting, customers and suppliers exist inside and outside the organization.
SUPPLIER
SUPPLIER
SUPPLIER
CUSTOMER
CUSTOMER
CUSTOMER
COMPANY
Customers were considered outsiders who used a company’s product, and the suppliers were outsiders who provided the materials needed to produce the products.
UNDERSTANDING CUSTOMER-DEFINED QUALITY
In a total quality setting, customer defines quality. When quality is defined by the customers, these factors apply:
- The customer must be the organizations top priority.
- Reliable customer are the most important.
- Customer satisfaction is ensured by producing high quality products.
STEPS IN IDENTIFYING EXTERNALCUSTOMER NEEDS
1. SPECULATE ABOUT THE RESULTS2. DEVELOP AN INFORMATION-
GATHERING PLAN3. GATHER THE INFORMATION4. ANALYZE THE RESULTS5. CHECK THE VALIDITY OF
CONCLUSIONS6. TAKE ACTION
IDENTIFYING INTERNAL CUSTOMER NEEDS
Continual communication is essential, there are various ways to collect information such as research, survey and the use of internet.
Do you know your customer’s operation?
The more the business knows about a customer operation, the easier it will be
to provide products that meet their needs.
BENEFITS OF KNOWING YOUR CUSTOMER: Product Enhancement Improved Productivity Internal Improvement
USING CUSTOMERS FEEDBACK TO MAKE DESIGN IMPROVEMENT
Collecting customer input and feedback is important when a business competes in a global market. In collecting those data, the following can be used:
Quality Function Deployment and Design Improvement
Affinity Diagrams and Design Improvement
QUALITY FUNCTION DEPLOYMENT AND DESIGN IMPROVEMENT
BASIC ACTIVITIES: DEPLOYMENT OF CUSTOMER REQUIREMENTS DEPLOYMENT OF MEASURABLE QUALITY
CHARACTERISTICS DETERMINATION OF THE CORRELATION BETWEEN
QUALITY NEEDS AND CHARACTERISTICS ASSIGNMENT OF NUMERICAL VALUES TO EACH
QUALITY CHARACTERISTICS INTEGRATION OF QUALITY CHARACTERISTICS INTO
THE PRODUCT DETAILED DESIGN, PRODUCTION, AND QUALITY
CONTROL OF PRODUCTS
CUSTOMER SATISFACTION PROCESS Determine who your customers are
Determine what attributes of your product or service are most important to your customers
Arrange these attributes in the order of importance by your customers
Determine your customers’ level of satisfaction with each of these attributes
Tie results of customer feedback to your processes.
Develop a set of metrics that tells how you are performing
CUSTOMER SATISFACTION PROCESS Implement measurement at the lowest possible
level Work on those processes that relate to attributes
that have high importance Work on those areas within the process that offer
the greatest opportunity to improve Update customer input and feedback on a
continual basis Maintain open, continual communication with
stakeholders on what is being done Aggregate metrics organization-wide into a format
for management review on a continual basis
CUSTOMER-DEFINED VALUE
Factors on how customer value products:
Product and service quality Service provided by the
organization The organizations personnel The organizations image Selling price of the
product/service Overall cost of the
product/service
QUALITY FUNCTION DEPLOYMENTAND DESIGN IMPROVEMENT
An integrated approach on product deployment and quality in all pre production activities.
It allows for a systematic
incorporations of customer needs, production capabilities, and all other parameters.
CUSTOMER VALUE ANALYSIS
Determine what attributes customer value most.
Rate relative importance of the attributes Asses organization performance relative
to the attribute. Ask customer to rate all attributes of
your product or services against the same product and services attributes of your competitor.
Repeat process periodically
CUSTOMER RETENTION
To retain customers over the long term, organizations must turn them into partners and proactively seek their input rather than waiting for and reacting to feedbacks provide after a problem has occurred.
ESTABLISHING CUSTOMER FOCUS
CLUSTERS: Vision, commitment and climate Alignment with customers Willingness to find and eliminate customer
problem Use customer information Reaching out to customer Competence, capability, and empowerment
of people Continual improvement of people and process
RECOGNIZING THE CUSTOMER-DESIRED ORGANIZATION
Recognizable by these characteristics:
Promptly follows promises. Can be trusted Credibility Attends to smallest detail Responsiveness
VALUE PERCEPTION ANDCUSTOMER LOYALTY
Companies work hard to build customer loyalty and the best way to do that is to provide customers product with superior value.
CUSTOMER LOYALTY MODEL
This consist of four components:- Business Performance - Loyalty
Behavior- Global Perception - Financial
Outcomes
CUSTOMER LOYALTY MODELBUSINESS PERFORMANCE
CATEGORIES: Product quality Service quality Relationship quality Image strength Price perception
CUSTOMER LOYALTY MODEL
FINANCIAL OUTCOME KEY FACTORS:1. MARKET SHARE2. REDUCE COST3. EMPLOYEE ATTITUDES4. PROFIT5. SHARE HOLDER VALUE
CUSTOMER LOYALTYVERSUS
CUSTOMER PROFITABILITY
Butterflies – high profit, short term
True friends – high profit, long term
Strangers – low profit, short term
Barnacles – low profit, long term
CUSTOMERS AS INNOVATION PARTNERS
Traditional Product Development VS the Innovation Partnership Approach
When the Innovation Partnership Approach is Appropriate
An Innovative approach to product development that is gaining
acceptance is turning customers into innovation partners.
Implementing the Innovation Partnership Approach
1. Develop tool for customer that easy to use
2. Increase the flexibility of your production processes
3. Carefully select the first customer to use your tool kit.
4. Continually Improvement your tool kit and do so quickly to satisfy your best customer.
5. Adapt your business practices to accommodate the innovation partnership
PRODUCT INNOVATION MODEL AND CUSTOMER RETENTION
Target the OpportunityExplore the IdeasDevelop AlternativesOptimize the SolutionCommercialize the
Innovation
THAT’S ALLTHANK YOU
FOR LISTENING