Customer Satisfaction

Chapter 3
Introduction
• The most important asset of any organization is its customers.
• An organization’s success depends on how many customers it has,
how much they buy, and how often they buy.
• Customers that are satisfied will increase in number, buy more, and
buy more frequently.
• Satisfied customers also pay their bills promptly, which greatly
improves cash flow—the lifeblood of any organization.
• The organizational diagram in Figure 3-1 best exemplifies just how
important the customer is to any organization.

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Figure 3-1 Customer Satisfaction Organizational Diagram

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Customer Satisfaction Organizational
Diagram
• The pyramid is used to determine the customer satisfaction as importance &
customer is at top & CEO is at the bottom.
• It depicted strong relationship between customer and CEO.
• A company never makes a product for its top management people, rather it
is meant for the customer.
• If we talk about front line employees are in direct contact with customer so
they are in a better position to understand a customer’s problems & queries.
• There is case of empowerment it is front line employee who should be
having more empowerment which will enable him to solve customer
problem directly on the spot.

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 Teboul Model of Customer Satisfaction
• There is always comparison going on between company’s offering & customer demand.
• You can’t predict what customer required because it depends upon the feelings, customer satisfaction
etc.
• Customer satisfaction seems simple enough, and yet it is far from simple.
• Customer satisfaction is not an objective statistic but more of a feeling or attitude.
• Although certain statistical patterns can be developed to represent customer satisfaction, it is best to
remember that people’s opinions and attitudes are subjective by nature.
• Because customer satisfaction is subjective, it is hard to measure.
• There are so many facets to a customer’s experience with a product or service that need to be measured
individually to get an accurate total picture of customer satisfaction.
• Whether or not a customer is satisfied cannot be classed as a yes or no answer. Errors can occur when
customer satisfaction is simplified too much
• Any product or service falling in this zone will be a surefire recipe for organization’s success.
• Finally, we conclude that customer satisfaction is not simple formula to understand or measure
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Figure 3-2 Customer Satisfaction Model

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Who is the customer? Customer Types
• External and Internal customers
• External – Current, Prospective and Lost Customers
• Internal – Every person in a process is a customer of the previous
operation. (Applies to design, manufacturing, sales, supplies etc.)
• [Each worker should see that the quality meets expectations of the
next person in the supplier-to-customer chain ]
• TQM is commitment to customer-focus - internal and external
customers.

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Customer/Supplier Chain
• Questions asked by people to their internal customers
• What do you need from me?
• What do you do with my output?
• Are there any gaps between what you need and what you get?
• Good team-work and inter-Departmental harmony is required.
• Also the leaders role in supervising the internal customer-supplier
chain.

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Customer Perception of Quality
• One of the basic concepts of the TQM philosophy is continuous process improvement.
• This concept implies that there is no acceptable quality level because the customer’s needs, values, and expectations are
constantly changing and becoming more demanding.
• TQM is quality management and management of quality – there is no full stop and no break in the chain!
• Continuous process (quality) improvement is all its about.
• Why? One important reason is the customer quality level is not static and his expectations keep changing and his demands
too!
• Also plant process dynamics- how to achieve maximum efficiency , optimizing cost and performance in the process
operations, minimizing waste etc.
• An American Society for Quality (ASQ) survey on end user perceptions of important factors that influenced purchases showed
the following ranking:
1. Performance
2. Feature
3. Service
4. Warranty
5. Price
6. Reputation
Note: The factors of performance, features, service, and warranty are part of the product or service quality; there- fore, it is evident that
product quality and service are more important than price. Although this information is based on the retail customer, it appears, to some
extent, to be true for the commercial customer also.

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 Customer Perceptions
• Performance: It involves “fitness for use” determine product feature
ready for customer usage.
• Features: It involves attributes of product/services for primary &
secondary nature depend upon psychological, time-oriented, contractual,
technological etc.
• Services: It related customer services part to give customer added value
considered as intangible features. Although there is difference between
better customer services then better quality of product.
• Warranty: It is considered as public promise backed by guarantee for
customer satisfaction. It gives customer for commitment. It generates
feedback about product’s features & services. It encourage to purchase
product & reduce risk level.
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 Customer Perceptions (cont.)
• Price: The perception of customer changed about pricing, they can pay
higher price to obtain value. The customers have trend to compare
multiple company’s product / services. If the company wants to retain
the customer they have to increase ongoing effort in terms of
identification, verification & update according to customer requirement.
• Reputation: It sometimes relates to the goodwill for an organization.
Total customer satisfaction gives an organization reputation . Customer
perception relates to purchase trusted brand name which gives cost
increase 5 times related to product. The strategy maker of an
organization consider the economical condition under consideration.

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Customer Feedback
• Customer feedback has to be continuously sought and monitored - not
one-time only! (Pro-active! Complaints are a reactive method of finding
out there is a problem)
• Customer feedback can be relayed to one time effort And ongoing and
active probing for the customer.
• Performance comparison with competitors can be known for new product
development
• Customers needs can be identified
• Relative priorities of quality can be obtained from the horses’ mouth!
• Areas for improvement can be noted.

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• Comment Card
• Customer survey with some general information and questionnaire
• Customer visits also determine in shaping about product.
• Customer focus groups plays an important role that gives direction to
the product.
• Quarterly reports also help customer as figure speaks itself.
• Toll-free phones E-mail, Internet, Newsgroups, Discussion forums
• Employee feedback

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 Comment Card Customer Questionnaire
• Low-cost method of obtaining • It is considered as one of the
feedback from customers most popular tool where
involves a comment card, which multiple
can be attached to the warranty
card and included with the • Questions asked by people
product at the time of purchase. regarding multiple opinion &
perception related to product /
• The intent of the card is to get
services.
simple information, such as
name, address, age, occupation, • These sort of survey helps an
and what influenced the organization’s management to
customer’s decision to buy the intact with customers also it
product. would help to meet customer
expectation.
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 Toll free telephone
Focus Group numbers
• A carefully planned discussion • It is a technique that is used to determine
customer complaint / feedback.
to obtain perceptions of a
defined interest area Where • The organization needs to respond
quickly because it’s the matter of
there is a permissive, non- customer’s retention.
threatening environment • It gives an idea to the customer that
• It sometimes use to determine whether to purchase product or not or
information about competitor’s product.
/ examine internal issues of an
• According to statistics it is considered as
organization. 50% organizations have toll free numbers
& this trend is increasing day by day.

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 Customer visit and report card
• Visit to a customer place of business is an effective way of collection
of an information.
• There is need of accurate information is required – People can see
first hand how the product is performing.
• The report card is effective way for gathering information which sent
each customer on quarterly basis. The report card is analysis tool for
area which needs to improve.

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References
• Total Quality Management - Dale H. Besterfield et al. ,Pearson
education LPE

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