Understand The Customer

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Understand The Customer
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Transform Enterprise Methodology
Develop Vision and Strategy
Plan for change
Create Desired Culture

• A Passion for
• Better
• Faster
• Cheaper

Improve and Integrate Enterprise
Develop Technology Solutions
3
Understand the Customer
Identify and Classify Customers
Set Goals For Future levels of Service
Determine Customer Needs
Evaluate Customer Satisfaction
Evaluate Competitors
4
Who Are your Customers?
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Why do your customers buy from you?
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Why do your customers buy from your competition?
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What are the demographics and categories of your
customers?
50 percent of our business is consumer 45 percent
of our business is industrial- commercial 5
percent of our business is Architectural.   My
estimated profile of the average consumer
customer would be   Age 26 - 35 years old
Education High School Grad or Some College
Occupation Various Income 35,000
Race 75 White Sex 80
Male   Most consumers shop the store once or
twice a month, while most commercial customers
shop weekly.   I estimate that two-thirds of our
consumer and commercial and consumer customers
come from a radius of 5 miles or less.
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We Wear Three Hats

• Customer

Processor
Supplier
Appreciate Your Customer
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Chain Of Customers
Customer
Distributor
Producer
External Suppliers
External Customers
Your Supplier
Your Process
Your Customer
Pilot Stewardess Baggage Handler Mechanic
Machine Shop
Aircraft Manufacturer
Airlines
Passenger
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Appreciation of Customer

• When it leaves the factory, its lipstick.
• But when it crosses the counter in the
• department store, its hope.
• Charles Revson
• CEO, Revlon

Output into Outcomes
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Understand the Customer
Identify and Classify Customers
Set Goals For Future levels of Service
Determine Customer Needs
Evaluate Customer Satisfaction
Evaluate Competitors
12
Determine Customer Needs

• What product/service attributes are considered
  important to your customers?
• What does your customer require (must have)?
• What does your customer want (would be nice to
  have)?
• Why is it important to determine customer needs?

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Kano Model
(Intangible)
(Tangible)
Performance
Satisfaction
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Intangible Wants

• Sense of well-being
• Securing attention
• Courteous treatment
• Prompt services
• Pleasant surrounding
• Sense of importance
• Dealt with honestly

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Kano Model

• Unanticipated
• Excitement
• Surprise

Unspoken
Performance
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Kano Model
(Intangible)

• Specified
• Required
• Desired

Performance
(Tangible)
Spoken
Satisfaction
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Kano Model
Performance

• Basic
• Essential
• Taken for granted

Unspoken
Satisfaction
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Kano Model

• Unanticipated
• Excitement
• Surprise

• Specified
• Required
• Desired

Unspoken
Performance

• Basic
• Essential
• Taken for granted

Spoken
Unspoken
Change
Satisfaction
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Hearing The Voice Of The Customer
Marketing
Laws Regulations
Innovative Ideas
Wants
Tribal Knowledge
Contracts
User Focus Groups
Competitive Analysis
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Customer Research
Be a customer
Simulate customer experience
Communicate with customers
Beyond conventional market research
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Customer Experience

• Appreciate how things look and feel to the
  customer
• Create the Moment of Truth
• What are some examples of a Moment of Truth?
• List moments of truth you encounter during a
  typical semester at Lamar
• List a strategy for over coming the gap between
  expected and actual customer service for each
  moment of truth

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Moment Of Truth

• Any episode in which the customer comes in
  contact with the organization
• Personal contact
• Telephone
• Mail
• Advertising
• Word of mouth
• Any event that forms a perception of the
  organization in the mind of the customer

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Customer Experience
Start
End
Contact
Contact

• The Customer Experience is a chain of contacts
  the customer undergoes in obtaining a product
• Each link represents a contact the customer has
  with the organization
• The total experience depends on the weakest link

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Example - Initiating A Loan
Enter loan office
Wait for loan officer
Park car
Discuss needs
Complete forms
Receive instructions
Leave office
Actual experiences can be compared to wants
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Estimate Wants
Basic
Customer Contact
Specified
Unanticipated
Park Car
Ample parking Marked spaces Paved lot Car safe
No parking available Missing borders Pot holes No
security guard
Protected parking Valet parking Close to building
Popcorn
Enter office
Clean Friendly
Long lines Noisy No directions
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Customer Wants
1st Level
Available

• Close to bank
• Parking space size
• Driving aisle
• Good Repair
• Safe
• Friendly
• Courteous
• Knowledgeable
• Short
• Reading material

Safety
Lot
Appearance
Receptionist
Wait
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Communicate With Customer

• Seek objective, honest feedback
• Attempt to understand customer viewpoint
• Expand sources of customer information
• Find the standard that differentiates competition

Beyond conventional market research
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Understand the Customer
Identify and Classify Customers
Set Goals For Future levels of Service
Determine Customer Needs
Evaluate Customer Satisfaction
Evaluate Competitors
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Customer-Driven Quality Cycle
Customer needs and expectations
(expected quality)
Identification of customer needs
Translation into product/service specifications
(design quality)
Output (actual quality)
Customer perceptions (perceived quality)

measurement and feedback
PERCEIVED QUALITY ACTUAL - EXPECTED
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Measuring Customer Satisfaction

• Discover customer perceptions of business
  effectiveness
• Compare companys performance relative to
  competitors
• Identify areas for improvement
• Track trends to determine if changes result in
  improvements

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Example The Olive Garden

• The Lobby
• Was the lobby staff friendly and did they welcome
  you to the restaurant?
• Were you seated in a timely, efficient manner?
• The Table Area
• Was your table area clean when you were seated?
• The Server
• Was your server attentive and there when you
  needed him/her?
• Was your server knowledgeable and able to answer
  your questions about our food and beverages?

• How was the pace of your meal?
• The Food
• How would you rate the taste of your food?
• Please rate the temperature of your food, hot
  food being piping hot.
• Please rate your visit on the value for the
  money.
• Overall, how would you rate your visit
• Would you recommend this Olive Garden to a close
  friend or relative?

Scale 1 poor .5 excellent
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Example The Olive Garden

• Open-ended questions
• What one thing did you like most about your
  visit?
• What one thing could we do to improve your
  experience at The Olive Garden?
• Survey form provides address, 800 number, FAX,
  and TDD number for hearing impaired

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Performance-Importance Analysis
Performance
Low High
Who cares?
Overkill
Low High
Importance
Strengths
Vulnerable
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House Of Quality

• Structured method converting what the customer
  wants into how they are to be satisfied
  throughout the organization

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House of Quality
Correlations
Product Characteristics
Relationships
Customer Wants
Competitive Analysis
Performance Targets
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Competitive Analysis
Satisfaction Targets
Competition Performance
Company Performance
Importance
Parking Available Courteous Receptionist Immediate
Service Ease of Application Options Available
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Competitive Analysis
Satisfaction Targets
Competition Performance
Company Performance
Importance
3 1 4 5 3
1 5 1 2 5
4 3 2 3 1
2 5 2 4 5
Parking Available Courteous Receptionist Immediate
Service Ease of Application Options Available
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Team Activity 1

• Determine a leader and a recorder
• Using the round robin technique
• Define customer satisfaction
• List customer wants (use separate page, please
  print)
• Even number teams write list on board
• Turn list of wants into me with all team members
  present listed

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Team Activity 2

• Determine a leader and a recorder
• Complete Discussion Questions 4.15 and 4.16
• Odd number teams write list on board
• Turn list of wants into me with all team members
  present listed

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Data Interpretation.
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Problem 4.15
Percentage Importance Score/4
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Problem 4.15
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Performance-Importance Analysis Discussion
Question 4.15
Performance
Low High
Overkill
Who cares?
Low High
Importance
Strengths
Vulnerable

• Vulnerable areas to improve
• ?

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Discussion Question 4.15 Solutions as provided
by Evans and Lindsay 5th Edition

• On the importance ratings, it appears that the
  three top items are mechanical condition, car
  cleanliness and staff friendliness. Check-out and
  check-in speed and getting reserved car or better
  are moderately important. All others are
  relatively unimportant.
• Regarding customer ratings of performance, there
  is some significant perceived differences between
  business users and personal users of the rental
  cars. In general, the business users give lower
  marks than the personal users on all categories,
  except getting reserved car or better and
  employee appearance. For the top items, business
  users rate the mechanical condition highest of
  all the items (tied with check-in
  speed/efficiency), while personal users rate it
  the second lowest of all categories. Staff
  friendliness is rated highest of all categories
  by the personal users, while being seen as
  somewhat lower by the business users.
  Interestingly, cleanliness of the vehicle and the
  facilities, seen as very important or important
  as attributes, is viewed as being on opposite
  ends of the scale on performance by the personal
  versus business users. The personal users rate
  cleanliness of both at second from the top, while
  the business users rate it as the bottom two
  items in performance.
• This survey shows that customers are generally
  well-satisfied on overall performance, with a 4.5
  out of 5 being the lowest rating. However the
  survey also indicates what the car agency may do
  to improve their customers satisfaction even
  more. True or not, personal users perceive that
  the mechanical condition of their cars is not as
  high as most other factors. Mechanical standards
  for both groups should meet or exceed customer
  requirements and there should be no differences
  between the conditions of car. Work also needs to
  be done to ensure that cleanliness of vehicles
  and facilities is improved and then maintained at
  a high level. Finally, a goal should be set to
  improve the attitudes of business users about
  staff friendliness. Staff should be informed,
  during training, about survey results showing
  that business customers are pickier than
  personal users.

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Problem 4.16
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Problem 4.16

• How do we place these performance criteria on the
  Performance Vs. Importance chart?
• Convert the importance ratings to a percentage
  scale
• Score/Scale
• For example score of 4.83 on a 5 point scale
  4.83/5.00 .966
• Determine the range High - Low Range
• .98 - .72 .26
• Determine Midpoint of range Range/2 Low
  Midpoint
• .26/2 .72 .85
• Those criteria in the top half of range are
  considered to be high importance and those in
  the bottom half are considered to be low
  importance
• .98 to .85 are considered High Importance
• .85 to .72 are considered Low Importance
• Repeat steps 1-4 for the performance ratings

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Problem 4.16

• Performance
• Convert the importance ratings to a percentage
  scale
• Score/Scale
• For example score of 4.80 on a 5 point scale
  4.80/5.00 .960
• Determine the range High - Low Range
• .98 - .77 .21
• Determine Midpoint of range Range/2 Low
  Midpoint
• .21/2 .77 .875
• Those criteria in the top half of range are
  considered to be high importance and those in
  the bottom half are considered to be low
  importance
• .98 to .875 are considered High Importance
• .875 to .77 are considered Low Importance
• Repeat steps 1-4 for the performance ratings

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Performance-Importance Analysis Discussion
Question 4.16
Performance
Low High
Overkill 5,7,9,12
Who cares?
Low High
Importance
Strengths 1,2,3,4, 6, 11
Vulnerable 8,10

• Vulnerable areas to improve
• Drinks should not be watered.
• Service rate.
• Increase the variety of food.
• Availability of children's menu.

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Discussion Questions 4.16 Solutions as provided
by Evans and Lindsay 5th Edition

• The importance ratings show that the top three
  items are fast service, clean tables, and drinks
  that are not watery. Next are crisp fries, fresh
  buns, and availability of a childrens menu.
  Overall performance ratings appear to be good,
  with only one item below 4 on a 5 point scale.
  Highest ratings for the six important items are
  for clean tables, fresh buns, and crisp fries.
  Work may be needed to provide a childrens menu,
  make service faster, and ensure that drinks are
  not watery. Efforts should be made to increase
  food variety. Food variety was not in the top six
  items in importance, but there seems to be a
  substantial gap between importance and
  performance ratings