Total Quality

Management
CHAPTER 2: CUSTOMER FOCUS
LEARNING OBJECTIVES
After s tu dying th is c h a pter , yo u s h o uld be a bl e to :

1. Define customer Satisfaction and engagement

2. Explain how to identify customers

3. Discuss how to understand customers needs

4. Describe how to link customer needs to design, production, and service

delivery

5. Discuss how to build a customer -focused organization

6. Describe the ways on how to manage customer relationships

7. Discuss how to measure customer satisfaction and engagement

Customer Focus

▪ -customer focus might be the

most important principle of
quality management.

▪ Without a customers, you

don’t have a business.

▪ “Okyakusama” means
customer or honorable guest
CUSTOMER FOCUS
▪ Pe r c e p ti ons o f va l u e a n d s a ti s f a ction

a r e i n f l u e n ce b y m a ny f a c to r s

th r o u g h out th e c u s to m e r s ove ra l l

p u r c h a s e , o wn e r s h i p, a n d s e r vi c e

e x p e r i en c es .

▪ To m e e t o r e xc e e d c u s to m er

e x p e c tation s , o r g a ni za tion s m u s t f u l l y

u n d e r s ta n d a l l p r o d uc t a ttr i bu tes

c o n tr i bu te to c u s to m e r val ue l e a d to

s a ti s f a c tion a n d l oya l ty.

 CUSTOMER SATISFACTION AND
ENGAGEMENT

Customer satisfaction- as the result of

delivering a product or service that meets
customer requirements.

“Customer satisfaction is vital to keeping

customer and growing business”.

-Customer satisfaction drives profitability

- Customers satisfaction and loyalty have evolved

into a new concept called Customer
engagement which refers to customers’
investment in a commitment in or commitment
to brand product offerings.
The American Customer
Satisfaction Index

▪ During 1994 The University of Michigan

Business School and the American

Customer Society for Quality (ASQ)

released the first American Satisfaction

Index (ACSI)- an economic indicator that

measures customer satisfaction at the

national level.
 IDENTIFYING CUSTOMERS

The f irst step in being customer focused is

to understand who are your customers are.

WHO WILL BE YOUR TARGET MARKET ?

Customers are those people who ultimately

purchase and use a company ’s product.

IDENTIFYING CUSTOMERS

▪ AT&T’s Customer- Supplier Model

In tern al cu stom er- the recipient of

another ’s output (which the product

or ser vices or any in f ormation)

in side th e organ ization.

External customers- those who fall

between th e organ ization an d th e

cu stom er, bu t are n ot par t of th e

organ ization
IDENTIFYING CUSTOMERS

Fundame ntal que stio ns to ide ntify c usto mers:

1 .What g o o d s and s er vic es are p ro d uced b y yo ur

w o rk.

2 .Who us es thes e p ro d ucts and s er vic es ?

3 .Who d o I c all , w rite o r ans w er q ues tio ns f o r?

4 .Who s up p lies the inp uts to my p ro c es s?

Customer Segmentation

Customers generally have different

requirements and expectations.

-Geography, Demographic, Usage,

volumes and Level of service.

Understanding
Customer Needs
It begins with a deep understanding of the

people who might use whatever product or

services that eventually emerges from its

w o r k , d ra wi n g f r o m a n t h ro p o l o g y, p s y c h o l o g y,

b i o m e c h a ni c s , a n d o t h e r d i s c i p l i n e s .
QUALITY DIMENSIONS OF
GOODS AND SERVICES

D avi d A . G a r vi n s u g g e s te d th a t th e p r o d uc t

h ave m u l ti ple d i m e n s ion s o f q u a l ity.

1 . Pe r f o r ma nc e

2 . Fe a tu r e s

3 . Re l i a bil ity

4 . Co n f o r m an ce

5 . D u ra b i li ty

6 . S e r vi c e ab ility

7 . A e s th e ti c s
QUALITY DIMENSIONS OF
GOODS AND SERVICES

▪ For Services research has identified 5

Principal Dimension in Customers

perception in Quality

▪ 1. Reliability

▪ 2. Assurance

▪ 3. Tangibles

▪ 4. Empathy

▪ 5. Responsiveness
THE KANO MODEL OF CUSTOMER REQUIREMENT

Noriako Kano , professor emeritus of the Tokyo University of Science, suggested

segmenting customer requirements into three groups:

Dissatisfiers (“must haves”); Basic requirements that customers expected in a

product or service.

Satisfiers(“wants”); Requirements that customers expressly say they want.

Exciters / delighter(“never thought of ”); New or innovative features that

customers do not expect or even anticipate, such as rear –seat video controls
that allow children to watch dvd movies or wifi capabilities in a car,but love once
they have them.

Innovations, however, are not exciters /delighters for long. As a customers

become familiar with them, exciters /delighters becomes satisfiers over time.
Gathering the Voice of the Customer
Customer requirements, as expressed in the customer’s own terms, are called the

voice of the customer.

Some of these approaches for gathering customer information's includes:

1. Comment Card’s and Formal Survey ’s

2. Focus Groups

3. Direct Customer contact

4. Field Intelligence

5. Complaints

6. Internet and Social Media Monitoring

Analyzing Voice of the Customer Data
Affinity Diagram

-is a useful tool for organizing large volumes of information

efficiently and identifying natural patterns for group in the

information.

-is a main ingredient of the KJ Method, developed in the 1960’s

by Kawakita Jiro, a Japanese anthropologist.

Linking Customer Needs to Design ,
Production, and Service Delivery
VOC information must be link to design, production, and delivery processes. A study

of internet bank service found that customers perceived quality along three broad

categories:

1. Customer Service Quality-reliability, responsiveness, competence, courtesy,

credibility , access, communication, understanding the customer, collaboration,

and continuous improvement.

2. Banking Service Product Quality- product variety/diverse features;

3. Online System Quality- content, accuracy, ease of use, timeliness, aesthetics,

and security.
MANAGING CUSTOMER RELATIONSHIP
Customer relationships can be fostered through strategic

partnership and alliances and using technology to facilitate

better communication with customer linkages to internal

operations
Building a Customer-Focused Organization
-It must be built on good policies, good people, and good processes.

-An organization fosters customer satisfaction and engagement by developing trust,

communicating with customers and effectively managing the interactions and

relationship with customers.

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

MEASURING CUSTOMER SATISFACTION AND
ENGAGEMENT

Some approaches to track customer

satisfaction:

1. Transactional Customer Satisfaction

Index

2. Relationship Customer Satisfaction

3. Competitive Study
 DESIGNING SATISFACTION SURVEYS

-T he f irs t s tep in d evelo p ing a c us to m er s ur vey is to

d eterm ine its p urp o s e; that is , w hat res earc h q ues tio ns

d o es the o rg anizatio ns want to ans w er?

-C us to m er s atis f ac tio n m eas urem ent s ho uld no t b e

c o nf ine to external c us to m ers.

-The next issue to ad d ress is w ho sho uld c o nd uct the

s ur vey.

-A liker s c ale is c o m m only us ed to m eas ure the

res p o ns e.
ANALYZING AND USING
CUSTOMER FEEDBACK

Deming stressed the importance of

using customer's feedback to improve

a company’s products and processes.

Many businesses, for example tie

managers annual bonuses to a

customers satisfaction result.

WHY MANY CUSTOMER SATISFACTION EFFORTS FAIL
Determining and using customer satisfaction should

be viewed as a key business process. Just going

through the motions can of ten lead to failure.

1. Poor measurement schemes

2. Failure to identify appropriate quality dimensions

3. Failure to weight dimensions appropriately

4. Lack of comparison with leading competitors

5. Failure to measure potential and former customers

6. Confusing loyalty with satisfaction.

MEASURING CUSTOMER LOYALTY

We no ted earlier that s atis f ac tio n is d if f erent f ro m loyalty.

C o m m only us ed f ac to rs to m eas ure c us to m ers loyalty

▪ Overall s atis f ac tion

▪ L ikeliho o d o f the f irs t tim e p urc has er to rep urc hase

▪ L ikeliho o d to rec o m m end

▪ L ikeliho o d to c o ntinue p urc has ing the s am e p ro d uct o r s er vic es

▪ L ikeliho o d to inc reas e f req uenc y o f p urc has ing

▪ L ikeliho o d to s w itc h to d if f erent p rovid er.