Delivering Value and Building Customer Satisfaction Through Quality

1
Delivering Value and Building Customer
Satisfaction Through Quality

• Quality is the totality of product/service
  characteristics that bear on its ability to
  satisfy stated or implied needs.

2
Satisfaction

• Satisfaction A persons feelings of pleasure or
  disappointment resulting from comparing a
  products perceived performance (or outcome) in
  relation to his or her expectations.
• Setting expectations is key to insure buyer
  satisfaction
• Know your capabilities to set expectations
  accurately
• In some cases, exceeding expectations results in
  delighted customers -- but not in every case
• Sometimes satisfied customers defect (leave)

3
Benefits of Market Orientation

• Higher customer satisfaction
• In general, satisfied customers are more loyal
  buy more
• Spread favorable word-of-mouth
• Are more brand loyal (less price sensitive)
• Give feedback
• Reduce costs
• Higher profits (short-term and long-term)
• Greater value for customers
• You know them and their needs

4
Management Characteristics of a Market Oriented
Firm

• Customer focus
• Obsessed with understanding needs and delivering
  satisfaction
• Competitor orientation
• Continuous recognition of competitors sources of
  advantages, competitive position and strategies
• Team approach
• Cross-functional teams dedicated to developing
  and delivering customer solutions -- high morale
  commitment to excellence

5
Customer Satisfaction

• Customer satisfaction can lead to retention
• Customer retention leads to increased
  profitability
• Much cheaper to keep customers than to find new
  ones
• Cheaper to serve customers that you know
• Current customers know what to expect -- more
  likely to be satisfied
• Typically only delighted customers are safe
  from defection!
• Satisfaction metrics are often interpreted
  incorrectly!!

6
The Meaning of Customer Satisfaction

• Typically a skewed distribution of satisfaction
• Most dissatisfied customers do not complain --
  they just LEAVE!
• Encourage complaints
• Have clear policies on dealing with complaints
• Provide quick remedies when possible
• Complaint recovery is a source of customer
  satisfaction
• Can actually be an opportunity

7
Life-Time Value of the Customer

• Total Customer Value is based on
• Image Value, personnel, service and product value
• Total Customer Cost is based on
• Monetary cost, time cost, Energy and psychic cost
• A key metric is determining the value of
  satisfied customers
• Cadillac customer 350,000 over the lifetime of
  the customer!!
• Avoid customers with a record or profile of a
  switcher
• Avoid hard to serve customers when possible

8
Marketing Research

• Gathering information and measuring market demand

9
Steps in the Research Process

• Define the problem research objectives
• Develop the research plan
• Collect information
• Analyse the information
• Use findings to make a decision

10
Defining the Problem and Setting Research
Objectives

• Types of research
• Descriptive, exploratory, causal
• What do we want to know?
• Clearly specify needed results
• Are we examining a symptom or the problem?
• Can we study this issue or problem?

11
Developing the Research Plan

• Data sources
• Research approaches
• Research instruments
• survey, interview, computer scored, etc.
• Sampling plan
• Contact methods

12
Decision Making with Results

• First, dont shoot the messenger!
• What do the results tell us?
• Are these issues actionable
• Was this the correct research approach (helps
  guide future research)
• Can we trust these results
• Is there some form of unacceptable bias in the
  study design (post-hoc analysis)

13
Methods of Conducting Marketing Research
Inexpensively (cheaply)

• Talk to your customers
• Conduct research by walking around
• Customer comment cards
• Act on any consistent findings
• Focus groups of customers
• Talk about how they want to do business
• Business reviews with major customers