1. CUSTOMER SATISFACTION Maaz Khan SEM IV – Total Quality Management

2. Agenda Introduction Customer Satisfaction
TQM relation to Customer Satisfaction

3. Introduction
Quality
Quality is excellence that is better than a minimum standard. It is conformance to standards and ‘fitness of purpose’
ISO 9000:2000 definition of quality - It is the degree to which a set of inherent characteristics fulfills or exceeds requirements(customer expectations).
Total Quality Management
TQM is the management approach of an organization, centered on quality, based on the participation of all its members and aiming at long term success through customer satisfaction and benefits to all members of the organization and society.
TQM is the integration of all functions and processes within an organization in order to achieve continuous improvement of the quality of goods and services. The goal is customer satisfaction.
Integrated Management approach towards quality
Customer Satisfaction
Customer satisfaction is a measure of how products and services supplied by a company meet or surpass customer expectation.
Customer define satisfaction in terms of their overall experience with the company.
Key performance indicator within business – directly linked to revenue and profitability
Not an objective statistics but more of a feeling or attitude.
Is not limited to the product alone, service connected with the product such as packaging, timely-accurate shipping, ability to meet deadline matters is also important

4. Customer Satisfaction
Who is the Customer
Customer Expectations
Customer Perception of Quality – Perceived Overall Quality
Customer Perceived Value – Perceived Value
Customer Complaints – Care/Feedback
Customer Loyalty – Retention
Measuring Customer Satisfaction – ACSI Score
Customer Satisfaction in Service Industry

5. Customer Satisfaction
Customer Perceived Quality is opinion of a product or brand’s ability to fulfill his or her expectations
Customer Perceived Value is The consumer's perceived value of a good or service affects the price that he or she is willing to pay for it
Customer Care/Service and Complaint mechanism form part of Feedback
Customer Expectation on the product’s Good Quality, Pricing, Functionality, Customer Service, Company reputation.
Customer satisfaction should lead to customer loyalty and customer retention.

6. Customer Satisfaction
Who is the Customer
Who is the final user of the product
Customer dictates the market trends and direction – Is the Boss/King.
Employers don’t pay wages but it is the customer who pays the wages! So take good care of your customers.
The entire organization must in effect revolve around the customer – whether the customer is being well served and if he is really pleased, contented and satisfied with the product/service you have to offer.
Customer Expectations
Good Quality, Pricing, Functionality, Customer Service, Company reputation.
Customer expectations keep changing along with demands
Customer Perception of Quality – Perceived Overall Quality
Customer’s opinion of a product or brand’s ability to fulfill his or her expectations. It may have little or nothing to do with the actual excellence of the product, and is based on the firm's (or brand's) current image, or past consumer's experience with the firm's other products, and the influence of the opinion leader’s, consumer's peer group, and others
Customer Perceived Value – Perceived Value
The worth that a product or service has in the mind of the consumer. The consumer's perceived value of a good or service affects the price that he or she is willing to pay for it. For the most part, consumers are unaware of the true cost of production for the products they buy. Instead, they simply have an internal feeling for how much certain products are worth to them. Thus, in order to obtain a higher price for their products, producers may pursue marketing strategies to create a higher perceived value for their products.

7. Customer Satisfaction
Customer Complaints – Care/Feedback
Feedback should be continuously sought and monitored - not one-time only
Pro-active approach should be adopted
Keep promises to customers, return customer calls promptly and professionally
Search for customer-related improvements continuously
Give every customer complete and personal attention.
Review and implement customer feedback and suggestions into current procedures when needed
Performance comparison with competitors can be known
Customers needs can be identified
Relative priorities of quality can be obtained from the horses’ mouth!
Areas for improvement can be noted.
Training and education to enhance job performance and commitment to customer care can be planned
Feedback methods
Comment cards enclosed with warranty card when product is purchased.
Customer survey and questionnaire
Customer visits
Customer focus groups
Quarterly reports
Toll-free phones
, Feedback section on website, newsgroups, discussion forums
Employee feedback
Mass communication

8. Customer Satisfaction
Customer Loyalty – Retention
This is the acid test for the bottom line- when the customer repeatedly comes back to you for repeat orders and to purchase new products by you. (In spite of stiff competition and multiple Suppliers
Customer satisfaction will lead to customer loyalty and customer retention.
Firm orders received or cash payments registered , market share, customer referrals and customer retention are an indication of your customer success and penetration .
It costs a company six times more to sell a product to a new customer than to sell to an existing one.
Loyal customers generate more revenue and are also cheaper to maintain.
Customer loyalty facilitates cross selling/ up selling of a company’s other products and services and also acts as an effective barrier to the entry of competition.
Measuring Customer Satisfaction - ACSI
ACSI stands for American Customer Satisfaction Index Score

9. Customer Satisfaction in Service
1) Organization
Identify each market segment
Write down the requirements
Communicate the requirements
Organize processes
Organize physical spaces
3) Communication
Optimize the trade-off between time and personal attention
Minimize the number of contact points
Provide pleasant, knowledgable and enthusiastic employees
Write documents in customer-friendly language
5) Leadership
Lead by example
Listen to the front-line people
Strive for continuous process improvement
2) Customer Care
Meet the customer’s expectations
Get the customer’s point of view
Deliver what is promised
Make the customer feel valued
Respond to all complaints
Over-respond to the customer
Provide a clean and comfortable customer reception area.
4) Front-line people
Hire people who like people
Challenge them to develop better methods
Give them the authority to solve problems
Serve them as internal customers
Be sure they are adequately trained
Recognize and reward performance

10. TQM relation to Customer Satisfaction
TQM Principles
TQM Principles alignment to Customer Satisfaction
TQM Advantages with respect to Customer Satisfaction
Measuring Customer Satisfaction
Indicators of Customer Satisfaction in TQM
Practical Example of TQM application – Kano Model

11. TQM principles TQM is a whole style of working.
TQM means satisfying customers first time, every time.
TQM is a whole style of working.
Do it right the first time
There is more than one route towards TQM.
Organize by process not by function
Customer at the center
Quality product
Quality service
Play role model
Implement TQM
Communicate
Remove road blocks
Suppliers as stakeholders
Improve input qualities through suppliers
Motivated employees
Team work
Employee empowerment
Establish performance measures
Data and analysis
Focus on process rather than function
Manufacturing and Service processes
Culture of continuous improvement at all levels
Defect prevention
Process, Suppliers, Customers, Employees, Continuous Improvement

12. Alignment of TQM to Customer Satisfaction
TQM Principle
Resulting Dependent Variable
Resulting Corelation
Customer focus
Cost of the product
Customer Satisfaction
Top management commitment – Leadership
Quality of product
Employee participation
Customer satisfaction
Process Approach
Quality of service
Systems Approach/Training
Variety of product/Product Differentiation
Continuous improvement
Competitiveness
Supplier relationship
Quality of inputs
Team work
Performance

13. TQM Advantages w.r.t Customer Satisfaction
Enabling your employees to solve problems
Enables employees to eliminate waste.
Results in good management.
Maintains customer focus consistently
Meets customer expectations by focusing on Quality
Defect Prevention leading to Defect reduction
Process for managing unsatisfied customers, make needed corrections
Motivate the workforce, happier employees automatically means happier customers
Reduced service calls
Greater productivity
Reduced cost of production and service
Creates innovation
When corporations start improving their own quality, they also expect better performance from their suppliers.
All of the above increases customer satisfaction

14. Measuring Customer Satisfaction
Steps
Develop key indicators that drive customer satisfaction.
Collect data regarding perception of quality received by customers
Key Indicators
For Physical Products
Reliability
Aesthetics
Adaptability
Usability
Functionality
Appropriateness
For Services
Friendliness/courteousness of employees
Safety/risk of service
Billing/invoicing procedure
Responsiveness to requests
Appearance of physical facilities
Approachability of the service provider
Willingness to listen to customer
Honesty and an ability to communicate in clear language

15. Indicators of Customer Satisfaction
Understanding customer requirements
Commitment to customers
Frontline empowerment
Excellent hiring, training, attitude and morale for front line employees
Proactive customer service system
Proactive management of relationship with customers
Use of all listening posts – touch points with customers
Quality requirements of market segment
Service standards meeting customers requirements
Greater customer loyalty
Market share improvement
Higher stock prices

16. Kano Model X axis – How well is the customer satisfied
Types of Customer Needs(Expectation)
Performance needs
Basic needs
Excitement needs
Improving Quality in these needs will appropriately increase Customer Satisfaction(ACSI)
Wow – Delightful – Company USPs only increases Customer Satisfaction
Y Axis – How well is the need executed
Not improving quality in these needs will dissatisfy the customer but improving will not increase customer satisfaction

17. Thank You
Q&A