Chapter 2 Notes

Total Quality Management
Chapter 2 – Customer Focus
Customer Focus
 most important principle of quality management
 without customer you don’t have a business
 “okyakusama” means customer or honorable guest
 Customer is always right
 Perceptions of value and satisfaction are influence by many factors throughout the
customers’ overall purchase, ownership and service experience
 Organizations must fully understand all product attributes contribute to customer value to
satisfaction and loyalty
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’ investments 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
 Customer Expectations
 Perceived Quality
 Perceived Value
 Customer Satisfaction
 Complaint Behavior
 Customer Loyalty
Identifying Customers
 Who will be your target market? Customers are those people who ultimately purchase
and use a company’s product
 AT&T Customer – Supplier Model
Internal Customer – the recipient of another’s output which the product or services or any
information inside the organization
External customers – those who fall between the organization and the customer, but are nor part
of the organization
Fundamental Question to identify customers:
1. What goods and services are produced by your work?
2. Who uses these products and services?
3. Who do I call write or answer questions for?
4. Who supplies the inputs to my process?
Customer segmentation
Customer 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 work, drawing from anthropology, psychology,
biomechanics, and other disciplines
Quality Dimensions of Goods and Services
David A. Garvin suggested that the product have multiple dimension of quality
1. Performance - batt
2. Features - cams
3. Reliability - life
4. Conformance – halal certified
5. Durability – shockproof, water resistant
6. Serviceability - warranties
7. Aesthetics – appearance
5 Principal Dimension in Customers perception in Quality
1. Reliability - condition
2. Assurance -
3. Tangibles – equipment used to cater needs
4. Empathy – promissory notes
5. Responsiveness – informing recommendations
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 requirement
 Satisfiers – wants, customers’ wants
 Exciters/Delighter – never thought of, innovative features
Gathering the Voice of the Customer

 Comment Card’s and Formal Survey
 Focus Groups
 Direct customer contact
 Field intelligence
 Complaints
 Internet and social media monitoring
Customer requirements – the voice of the customers
Analyzing Voice of the customer Data
Affinity Diagram – useful tool for organizing large volumes of information efficiently and
identifying natural patterns for group in the information. It is a main ingredient of the KJ
Method, developed in the 1960s by Kawakita Jiro, Japanese anthropologist
Linking Customer Needs to Design, Production and Service Delivery
Study of Internet Bank Service:
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
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
 Built in food policies, good people, good processes
 Developing trust, communication with customers and effectively managing the
interactions and relationship with customers
Key processes:
 Making Sincere commitment to customers
 Ensuring quality customer contact
 Selecting and developing customer contact employees
 Managing complaints and service recovery
Measuring customer satisfaction and engagement
 Transactional Customer Satisfaction Index – immediate response
 Relationship Customer Satisfaction – specific features
 Competitive Study – comparison
Designing satisfaction surveys

 Determine purpose, what research questions does the organizations want to answer?
Customer satisfaction measurement should not be confine to external customers
 Who should conduct the survey
A liker scale is commonly used to measure the response
Analyzing and using customer feedback
Deming stressed the importance of using customer’s feedback to improve a company’s
product and processes. Managers annual bonuses to a customer satisfaction result
Why many customer satisfaction efforts fail
 Poor measurement schemes
 Failure to identify appropriate dimensions
 Failure to weigh dimension appropriately
 Lack of comparison with leading competitors
 Failure to measure potential and former customers
 Confusing loyalty with satisfaction
Determining and using customer satisfaction should be viewed as a key business process.
Measuring customer loyalty
Satisfaction is different from loyalty.
Commonly used factors to measure customers’ loyalty
 Overall satisfaction
 Likelihood of the first time purchases to repurchase
 Likelihood to recommend
 Likelihood to continue purchasing the same product or services
 Likelihood to increase frequency of purchasing
 Likelihood to switch to different provider

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Total Quality Management

Chapter 2 – Customer Focus

Gathering the Voice of the Customer

Designing satisfaction surveys

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