Q8 IM05 Final

CHAPTER 5
Focusing on Customers
Teaching Notes
This chapter focuses on customer satisfaction. Until a few years ago, this was a topic that was
thought to be only a marketing activity and out of the area of responsibility of quality, human
resources, or production and operations managers. Things changed when the TQ movement got
underway. What was formerly reserved for a few specialists in "consumer behavior" within the
"marketing research" discipline became a topic of concern to quality professionals and managers
at every level. The focus on TQ has helped to change the former attitude. Students who are not
marketing majors need to be made aware of this important refocusing of management's attention.
Objectives of this chapter should be to:
Raise students' awareness of the concept that satisfying customers is perhaps the most
important competitive goal of any business. To achieve customer satisfaction, an
organization must identify customers' needs (the consumer benefit package), design the
production and service systems to meet or exceed customer expectations, continually
improve the consumer benefit package, improve the quality of internal operations and
build good relationships.
Learn that key customer-focused practices for performance excellence include identifying
the most important customer groups and market segments; understanding the voice of the
customer through effective listening and learning strategies; understanding the linkages
between customer needs and design/production/delivery processes; creating a customerfocused culture that contributes to customer engagement; managing and resolving
complaints effectively, and measuring customer satisfaction, engagement, and
dissatisfaction, and acting on the results to improve organizational processes.
Develop an appreciation for customer engagement, which refers to customers investment

in, or commitment to, a brand and product offerings. Characteristics of customer
engagement include customer retention and loyalty, customers willingness to make an
effort to do business with the organization, and customers willingness to actively advocate
for and recommend the brand and product offerings.
Define the customer benefit package as the total package of products and services that a
business offers, and includes the physical product and its quality dimensions; pre-sale
support, such as ease of ordering; rapid, on-time, and accurate delivery; and post-sale
support, such as field service, warranties, and technical support. The customer benefit
package influences perceptions of quality.
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Introduce the American Customer Satisfaction Index (ACSI) - a national measure of

customer satisfaction and a type of benchmark that can be useful to firms, industries, and
consumers.
Define product quality dimensions including performance, features, reliability,

conformance, durability, serviceability, and aesthetics. Service quality dimensions are
reliability, assurance, tangibles, empathy, and responsiveness
Study the Kano model, which segments customer requirements into dissatisfiers, satisfiers,
and exciters/delighters. As customers become familiar with them, exciters/delighters
become satisfiers over time. Eventually, satisfiers become dissatisfiers. Companies must
take special efforts to develop products and services that truly excite/delight customers.
Know that gathering customer information is performed by various methods, or listening

posts, including comment cards and formal surveys, focus groups, direct customer
contact, field intelligence, and complaint analysis. Customers needs are expressed in the
voice of the customer Profitability can be measured based on a net present value of the
customer calculation. Affinity diagrams and tree diagrams are helpful tools for classifying
customer requirements.
Learn that there are differences between consumers, who are end users of products and
services; External customers who are outside organizations and fall between the
organization and the consumer, and who have distinct needs and expectations; and
Internal customers who are people, departments, or processes that depend on others to
serve consumers and external customers.
Help students understand that customers form perceptions (perceived quality) of the
quality of goods and services by comparing their expectations (expected quality) with
outcomes they receive (actual quality). It is essential that careful attention be paid to
design and production processes, as well as customer feedback, since positive perceptual
differences can lead to satisfaction while negative ones can lead to dissatisfaction.
Appreciate that good customer satisfaction measures must be designed scientifically and
include performance and importance measures. A good measurement process (often called
a Customer Relationship Management [CRM] system) will provide actionable information
to improve a company's operations and products to further satisfy its customers. Many
customer satisfaction efforts fail due to poor measurement, useless questions, lack of
proper focus, no comparative data, inattention to potential and former customers, and
confusing satisfaction with loyalty.
Customer perceived value (CPV) is an alternative to traditional satisfaction measurement,

and measures how customers assess benefits such as product performance, ease of use,
or time savings against costs such as purchase price, installation cost or time, and so
on, in making purchase decisions. CPV methodology identifies the most important
product attributes that prospective customers use to compare one offering against another
and provides a basis for strategic decisions.
Study how customer focus plays a vital role in each of the three major quality frameworks,
the Baldrige process, ISO 9000, and Six Sigma, although they are treated in different ways
within each system. The Baldrige includes Category 3, Customer and Market Focus, as
well as strategic planning and deployment in goal setting and business results. In ISO
9000, the responsibility for customer focus is on senior leadership. In the Product
Realization section, the standards require that the organization determine customer
requirements, including delivery and post-delivery activities, and any requirements not
stated by the customer but necessary for specified or intended use. The organization must
also establish procedures for communicating with customers about product information
and other inquiries, and for obtaining feedback, including complaints. In the Measurement,
Analysis, and Improvement section, the standards require that the organization monitor
customer perceptions as to whether the organization as met customer requirements; that
is, customer satisfaction. In Six Sigma processes, customers are sometimes hidden
because the focus tends to be on the improvement projects and measurement issues.
However, a focus on the customer is vital at every DMAIC stage of Six Sigma projects. A
fundamental aspect of Six Sigma methodology is identification of critical to quality
(CTQ) characteristics that are vital to customer satisfaction.
The Instructors Resource materials also contain Baldrige video clips that can be used to
supplement lectures. One of those, presenting Baldrige award recipient, Pals Sudden Service, has
a number of scenes that show how a quick service restaurant can be customer focused.
ANSWERS TO QUALITY IN PRACTICE KEY ISSUES
Understanding the Voice of the Customer at LaRosas Pizzerias
1.
The in-depth interviews required by the VOC methodology have strengths and limitations,
just as any consumer research technique does. It is a form of focus group. As pointed out
in the chapter, a focus group is a panel of individuals (customers or non-customers) who
answer questions about a company's products and services as well as those of competitors.
Focus groups offer a substantial advantage by providing the direct voice of the customer
to an organization. A disadvantage of focus groups is their higher cost of implementation
compared to other approaches. Also, the limited sample of customers means that some
important aspects of the product and/or service may not be picked up on from the VOC
group, but would be noticed in a broader survey.
2.
LaRosas was able to identify and prioritize the most important customer requirements. In
addition the perspective was changed from a product-out to a market-in mentality,
forming the basis for a decision to pursue a directly related growth strategy. Three years of
effort had been required to settle on a growth strategy that could be agreed on by top
management. Finally, radical design changes in the new restaurant facilities were
incorporated as a result of the VOC information that was collected.
3.
Conducting a mock VOC study will be an interesting exercise that can help students
understand the difficulties and benefits of action research in order to listen to, and obtain
information from actual customers and consumers.
Customer Focus at Amazon.com
1.
Amazons CRM software helps in multiple ways to gain market share and maintain
competitive advantage over their rivals. The list of the characteristics that make up their
vision of customer service points to numerous features that are hard to duplicate in
conventional websites or store chains. For instance, Amazon:
has deep selection that is unconstrained by shelf space.

turns their inventory 19 times in a year.
personalizes the store for every customer.
trades real estate for technology
displays customer reviews critical of their products.
allows customers can make a purchase with a few seconds and one click.
puts used products next to new ones so customers can choose.
shares their prime real estate, their product detail pages, with third parties, and, if
they can offer better value, they let them
adopts leading-edge technology for the companys website
has served customer needs by being one of the early pioneers to develop software
for collaborative filtering of customer data
Thus, the firm demonstrates the advantages of their CRM approach through exploiting
technology, as characterized in the text:
Segmenting markets based on demographic and behavioral characteristics,

Tracking sales trends and advertising effectiveness by customer and market
segment,
Identifying which customers should be the focus of targeted marketing initiatives
with predicted high customer response rates,
Forecasting customer retention (and defection) rates and provides feedback as to
why customers leave a company,
Studying which goods and services are purchased together, leading to good ways
to bundle them, and
Studying and predicting what Web characteristics are most attractive to customers
and how the Web site might be improved,
2.
Amazon.coms operating efficiencies in order fulfillment activities are almost bound to

improve over time. The capabilities of its high-tech warehouses, such as its nearly perfect
process for sorting multiple item orders, create a built-in method for driving out
unnecessary costs. As it expands its offerings and adds more retail partners, Amazon's
fulfillment capabilities pay dividends to its partners, as well as adding revenues to Amazon.
3.
Customer privacy risks, besides the ones mentioned in the case, that Amazon.com must
guard against include an increasing number of threats in order to continue to grow its
business. These include the growing sophistication of computer hackers, the
uncertainties about government surveillance, and the temptations to make potentially
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lucrative deals to share their database with partners. Hackers have already broken into
some very secure e-commerce systems and stolen large numbers of credit card numbers
and records. Expanded authority for government surveillance of on-line transactions may
require some difficult decisions to be made about the amount of privacy that can be
guaranteed to customers. The temptation of partners who may want access to
Amazon.coms database, but where Amazon.com cannot guarantee privacy its customers
is a troublesome prospect.
ANSWERS TO REVIEW QUESTIONS

1.
Key customer-focused practices for performance excellence include identifying the most
important customer groups and market segments; understanding the voice of the customer
through effective listening and learning strategies; understanding the linkages between
customer needs and design/production/delivery processes; creating a customer-focused
culture that contributes to customer engagement; managing and resolving complaints
effectively, and measuring customer satisfaction, engagement, and dissatisfaction, and
acting on the results to improve organizational processes. In a sense, Park Place Lexus and
Mercy Health Systems reflect all of these practices. However, Park Place Lexus has
excelled in measuring customer satisfaction, engagement and dissatisfaction and acting on
results to improve organizational processes. Mercy Health Systems is particularly adept at
understanding the linkages between customer needs and design/production/delivery
processes.
2.
Customer satisfaction occurs when products and services meet or exceed customer
expectations. Loyal customers spend more, refer new clients, and are less costly to do
business with. Poor quality products and services, on the other hand, lead to customer
dissatisfaction in the form of complaints, returns, and unfavorable word-of-mouth
publicity. Dissatisfied customers purchase from competitors.
3.
Customer engagement refers to customers investment in or commitment to a brand and

product offerings. Characteristics of customer engagement include customer retention and
loyalty, customers willingness to make an effort to do business with the organization, and
customers willingness to actively advocate for and recommend the brand and product
offerings. Customer satisfaction, according to research leading to the development of the
ACSI, is determined by: customer expectations, perceived quality, and perceived value.
Thus, customers may be satisfied, but not engaged, or loyal to a particular organization or
brand.
4.
The consumer benefit package is the total package of products and services that a
business offers, and is based on a comparison of price and features with competitive
offerings. The consumer benefit package influences the perception of quality and includes
the physical product and its quality dimensions; pre-sale support, such as ease of ordering;
rapid, on-time, and accurate delivery; and post-sale support, such as field service,
warranties, and technical support.
5.
The American Customer Satisfaction Index is a national measure of customer satisfaction,

linking expectations, perceived quality, and perceived value to customer satisfaction,
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which in turn is linked to customer loyalty and profitability. The econometric model used
to produce ACSI links customer satisfaction to its determinants: customer expectations,
perceived quality, and perceived value. Customer satisfaction, in turn, is linked to
customer loyalty, which has an impact on profitability. You may want to review an
excellent article in Fortune magazine relating the history and development of the ACSI
and its impact [Wilton Woods. After All Youve Done for Your Customers, Why are They
Still Not Happy? Fortune, December 11, 1995, 178-182]. This was the first crossindustry benchmark in the United States to measure customer satisfaction. In January
1998 it was announced that the Arthur Andersen consulting firm would join the earlier
sponsors in funding and marketing the index. Similar indices had previously existed in
Sweden and Germany, and in April, 2000, a new European Customer Satisfaction Model
was announced. Both European Community and Non European Community companies
that have substantial European Market Share base it on customer evaluations of the
quality of goods and services that are purchased in Europe and produced.
As pointed out in the article: A test: if you cant demonstrate the link between increased
customer satisfaction and improved financial results, youre not measuring customer
satisfaction correctly. Happy customers should exhibit at least one of three measurable
characteristics: loyalty (retention rates), increased business (share of wallet), and lack of
susceptibility to your rivals blandishments (price tolerance). See ACSIs web site at
http://www.theacsi.org for most recent data.
6.
A company can expect to encounter external customers at the organizational level, who, as
previously mentioned, may include both consumers and other companies within the "chain
of customers." At the process level, internal customers or divisions within the company
who receive products or services from suppliers within the company must be recognized
and satisfied or delighted. If an organization remembers that its customers include both its
employees as well as the public, then it will seek to consciously maintain a customerfocused work environment at the performer level, where each employee receives inputs
from others and produces some output for individual internal customers.
7.
In AT&T's customer-supplier model, your suppliers provide inputs into your process.
The process then provides outputs to your customers. The customers provide
requirements & feedback on your process, and you, in turn, provide requirements &
feedback to your suppliers.
8.
Customers should be segmented because of, and according to, their different requirements
and expectations. A company usually cannot satisfy all customers with the same products
or services. Customer segmentation might be based on geography, demographic factors,
ways in which products are used, volumes, or expected levels of service.
9.
The dimensions of quality defined by Garvin are:

a)
b)
Performance: a products primary operating characteristics. Using an automobile as

an example, these would include such things as acceleration, braking distance,
steering, and handling.
Features: the bells and whistles of a product. A car may have power options, a tape
or CD deck, antilock brakes, and reclining seats.
c)
d)
e)
f)
g)
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Reliability: the probability of a products surviving over a specified period of time
under stated conditions of use. A cars ability to start on cold days and frequency of
failures are reliability factors.
Conformance: the degree to which physical and performance characteristics of a
product match pre-established standards. A cars fit and finish and freedom from
noises and squeaks can reflect this.
Durability: the amount of use one gets from a product before it physically
deteriorates or until replacement is preferable. For a car this might include corrosion
resistance and the long wear of upholstery fabric.
Serviceability: the speed, courtesy, and competence of repair work. An automobile
owner might be concerned with access to spare parts, the number of miles between
major maintenance services, and the expense of service.
Aesthetics: how a product looks, feels, sounds, tastes, or smells. A cars color,
instrument panel design, control placement, and feel of the road, for example, may
make it aesthetically pleasing.
The key dimensions of service quality include:
1. Reliability: the ability to provide what was promised, dependably and accurately.
Examples include customer service representatives responding in the promised time,
following customer instructions, providing error-free invoices and statements, and
making repairs correctly the first time.
2. Assurance: the knowledge and courtesy of employees, and their ability to convey trust
and confidence. Examples include the ability to answer questions, having the
capabilities to do the necessary work, monitoring credit card transactions to avoid
possible fraud, and being polite and pleasant during customer transactions.
3. Tangibles: the physical facilities and equipment, and the appearance of personnel.
Tangibles include attractive facilities, appropriately dressed employees, and welldesigned forms that are easy to read and interpret.
4. Empathy: the degree of caring and individual attention provided to customers. Some
examples might be the willingness to schedule deliveries at the customers
convenience, explaining technical jargon in laypersons language, and recognizing
regular customers by name.
5. Responsiveness: the willingness to help customers and provide prompt service.
Examples include acting quickly to resolve problems, promptly crediting returned
merchandise, and rapidly replacing defective products.
Similarities are that they both require identification of the voice of the customer and
translation of customer needs into product/service specifications to be met or exceeded.
The differences revolve around the fact that Garvins dimensions were developed primarily
for tangible products. Therefore, they emphasize characteristics that are subject to direct,
tangible measurements, such as conformance, reliability, and durability. The service
dimensions emphasize attitudes and feelings about the services received, such as
assurance, empathy and responsiveness. Although they are real they are more difficult to
measure.
10.
Noriaki Kano, a Japanese professor, has suggested three classes of customer requirements:
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DissatisfiersRequirements that are expected in a product or service. If these
features are not present, the customer is dissatisfied.
SatisfiersRequirements that customers say they want, but secretly do not expect.
Fulfilling these requirements creates satisfaction.
Exciters/delightersNew or innovative features that customers do not expect. The
presence of unexpected features leads to high perceptions of quality.
The focus, then, of quality management is to continually research and determine these
requirements and develop them to their fullest extent.
11.
As suggested in answer 9 above, the voice of the customer is an expression of the

product or service characteristics that are considered important by customers. They are
often expressed in laymans terms and must be translated into product specifications
that can be used in design, manufacture, and delivery of the product or service.
12.
The major listening and learning approaches to gather customer information include:
13.
Comment cards and formal surveys--These are easy ways to solicit information on
customer satisfaction and perceptions of the importance of various quality dimensions.
However, only a small percentage of customers regularly respond to such surveys.
Focus groups--A focus group is a panel of individuals (customers or non-customers)

who answer questions about a company's products and services as well as those of
competitors. Focus groups offer a substantial advantage by providing the direct voice
of the customer to an organization. A disadvantage of focus groups is their higher cost
of implementation compared to other approaches.
Direct customer contact--In customer-driven companies, top executives commonly

visit with customers personally. This approach also works well with the rank-and-file
employees.
Field intelligence--Any employee who comes in direct contact with customers can
obtain information simply by engaging in conversation, observing, and listening to
customers. The effectiveness of this method depends on a culture that encourages
open communications with superiors.
Study complaints--These allow companies to learn about product failures and service
problems. The downside, of course, is that you hear of customer dissatisfaction only
after the fact.
Affinity diagrams and tree diagrams (see Chapter 5 Bonus materials on the Premium
website for additional details on the 7 Management Tools) are used to organize customer
requirements into logical categories. An affinity diagram allows teams to sift through large
volumes of information, and identify key quality issues and their elements. Tree diagrams,
showing hierarchical structures of facts and ideas, are used in designing implementation
plans for projects.
14.
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The customer-driven quality cycle involves the interaction between expected quality,
actual quality and perceived quality. Expected quality includes true customer needs and
expectations, that is, what the customer assumes will be received from the product. Actual
quality is the outcome of the process and what is delivered to the customer. Perceived
quality is actual quality minus expected quality. If the amount of actual quality provided is
equal to or more than the expected quality, the customer perceives positive satisfaction. If
the amount of actual quality provided is less than the expected quality, the customer
perceives negative or dis-satisfaction.
In the customer-driven quality cycle, (1) expected quality is identified, and (2) translated
into product/service specifications (design quality) to produce (3) output. Customer
perceptions concerning the output (perceived quality) are then measured as being positive
or negative, and necessary improvements are continually built into the first three steps of
the process.
15.
A "moment of truth," in a service industry, is the moment when a customer comes in

contact, either directly (i.e. face-to-face, by telephone) or indirectly (i.e. by letter or fax),
with an employee of the company. This is the make-or-break moment for customer
satisfaction. Problems result from unkept promises, failure to provide full service, service
not provided when needed, incorrectly or incompletely performed service, or failure to
convey the correct information.
16.
Accessibility and commitments are needed in order to build strong customer relationships.
Organizations that truly believe in the quality of their products make sincere commitments
to their customers. Effective commitments address the principal concerns of customers,
are free from conditions that might weaken customers trust and confidence, and are
communicated clearly and simply to customers. A customer commitment might guarantee
that calls or e-mail inquiries will be returned promptly, provide explicit guarantees and
warranties, or give extraordinary guarantees that promise exceptional, uncompromising
quality and customer satisfaction, and back that promise with a payout with few, if any,
strings attached. For example, L.L. Beans guarantee is: Everything we sell is backed by a
100 percent unconditional guarantee. We do not want you to have anything from L.L.
Bean that is not completely satisfactory. Return anything you buy from us at any time for
any reason it proves otherwise.
Customer-focused organizations make it easy for customers to do business. Many, like
Procter & Gamble, install a toll-free number for its products, or use e-mail and website
access are the media of choice for many consumers. Premier, Inc. provides a wide variety
of avenues for customers to seek assistance, conduct business, and make complaints or
suggestions. These include toll-free telephone, Internet, a Customer Solution Center,
customer advisory committee meetings, product user group meetings, field staff site visits,
technical assistance fax, regional performance improvement forums, and product support
centers. The City of Coral Springs provides a website, CityTV, CityRadio, CityBlog,
Customer Care Center, a quarterly mangaine, annual report, neighborhood and business
meetings, and advisory boards and committees.
17.
Customer contact employees are the face of the company to customers. This group may
include any employee who comes in direct contact with customers, such as salespeople,
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repair technicians, telephone operators, and receptionists. They are critical because, not
only do they take customer orders, field inquiries and complaints, and often deliver the
product or service, but they can also obtain useful information that helps translate the
voice of the customer simply by engaging in conversation and listening to customers. The
effectiveness of this method depends upon a culture that encourages open communication
with superiors.
18.
Good customer relationship management depends on the quality of training of customercontact personnel. Many companies begin with the recruiting process, selecting those
employees who show the ability and desire to develop good customer relationships.
Companies committed to customer relationship management ensure that customer-contact
employees understand the products and services well enough to answer any question,
develop good listening and problem recovery skills, and feel able to handle problems. As
mentioned several time, The Ritz-Carlton Hotel Company, L.L.C. is one of the
benchmark organizations for training customer contact employees. Empowering
employees allows them to make decisions on their own to satisfy customers, who dislike
being transferred to a seemingly endless number of employees to obtain information or
resolve a problem.
19.
Customer contact requirements are measurable performance levels or expectations that

define the quality of customer contact with representatives of an organization. These might
include technical requirements such as response time (answering the telephone within two
rings), or behavioral requirements (using a customers name whenever possible).
Customer needs and expectations form the basis of measurable contact requirements. They
are important because companies must communicate these requirements to all customercontact employees, they must then be used to maintain the consistency and effectiveness of
their standards, and companies must continually reinforce their standards. Additionally,
many customer-contact employees depend on internal customers for support, who also
must understand the role they play in meeting the requirements. Finally, companies must
generally implement a process for tracking adherence to the requirements and providing
feedback to the employees to improve their performance.
20.
Companies should make it easy for customers to complain both for short-run customer
satisfaction and for long-run process/product improvement reasons. By listening to, and
resolving complaints quickly, companies may retain dissatisfied customers. Furthermore it
may cut down the negative word-of-mouth advertising about the problem. Complaints
also provide a valuable source of product and process improvement ideas. A generic
complaint management process similar to that used by BI (Figure 5.7) could be developed.
Steps include: a) apologize; b) listen, empathize, clarify; c) solve problem quickly; d) offer
atonement; e) keep the promise; f) follow up; g) prevent reoccurrence.
21.
Service recovery is very important, according to recent research. Studies in the service
management literature suggest that customers who rated service quality highly also had
the highest expectations for service recovery. Loyal customers are most likely to lose
loyalty when problems are not resolved, but are most likely to increase or maintain loyalty
whenever the problem is deemed to have been resolved successfully. However, non-loyal
customers show the greatest likelihood of decreasing their loyalty even when a failure is
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resolved. This suggests that there is much to gain from responding to service failures to
non-loyal customers, but it also highlights how difficult this may be to accomplish.
22.
Strategic partnerships and alliances are useful to organizations because it permits them to
look outside their organization for assistance with non-critical support process, thus
allowing more time to focus on improving their own core competencies. In addition, the
organization can often obtain access to technology or distribution channels not available to
them internally, share risks in new investment and product development, improve products
based on supplier capability, and reduce costs through better communications.
23.
There are several issues associated with customer focus in e-commerce. In many cases,
customer service and understanding of the voice of the customer has not kept up with the
expanding technological capabilities to advertise and deliver products. Thus, customers
who are hoping to experience quick, easy, reliable transactions that will reduce stress and
save time and money, are finding that the opposite is happening. Recent studies have
shown the importance of customer focus and the limitations of poor website design and
inadequate service to these customers.
24.
CRM software is designed to help companies increase customer loyalty, target their most
profitable customers, and streamline customer communication processes. A typical CRM
system includes market segmentation and analysis, customer service and relationship
building, effective complaint resolution, cross-selling goods and services, order
processing, and field service. CRM helps firms gain and maintain competitive advantage
by:
25.
Segmenting markets based on demographic and behavioral characteristics

segment
with predicted high customer response rates
Forecasting customer retention (and defection) rates and provides feedback as to
why customers leave a company
to bundle them
Studying and predicting what Web characteristics are most attractive to customers
and how the Web site might be improved
By measuring customer satisfaction, a company can learn how pleased or dissatisfied its
customers are with products or services. It can discover customer perceptions of how well
the business is doing in meeting customer needs, discover areas for improvement, and also
track trends to determine if changes actually result in improvements. Steps in designing
effective customer surveys include:
Determine the purpose

Address who should conduct the survey
Define the sample frame
Select the appropriate survey instrument
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Design proper questions with proper wording
Develop measurable service characteristics (when applicable)
Design a reporting format and data entry methods
26.
Customer satisfaction survey questions must be properly worded to achieve actionable

results. Actionable results mean that responses are tied directly to key business processes,
so that what needs to be improved is clear; and information can be translated into
cost/revenue implications to support the setting of improvement priorities.
27.
Typically, only firms that are more customer-sensitive than most recognize the need to
analyze their customer satisfaction surveys to determine the relationship between
importance and performance (the FP&L Quality in Practice incident in the Bonus
Materials is an excellent example). The concept simply recognizes that certain key quality
characteristics are of major significance to customers, while others are of little or no
interest. If companies do not perform well on the significant characteristics, customers
perceive that the organization has poor quality, even if they perform very well on other
dimensions.
28.
Many customer satisfaction efforts fail due to poor measurement, useless questions, lack
of proper focus, no comparative data, inattention to potential and former customers, and
confusing satisfaction with loyalty.
29.
Customer perceived value measures how customers assess benefitssuch as product

performance, ease of use, or time savingsagainst costs, such as purchase price,
installation cost or time, and so on, in making purchase decisions. Organizations can
benefit from measuring it because it provides an alternative to traditional customer
satisfaction measurement that focuses more on customer loyalty than on satisfaction. For
example, sellers that provide the greatest CPV at the time of the purchasing decision
always win the sale. CPV measurement includes potential buyers rather than just existing
customers, is forward-looking rather than retrospective, and examines choices relative to
alternatives rather than relative to expectations. Typical questions that are asked include
What benefits are important to you? and How well do you believe that each product or
supplier will deliver those benefits? and focus on perceptions of future value rather than
past experiences. CPV methodology identifies the most important product attributes that
prospective customers use to compare one offering against another, and their relative
importance and performance.
30.
In the Baldrige Award Criteria, Item 3.1, Customer Engagement, examines an

organizations processes for determining product offerings and mechanisms for customer
support, and how an organization builds a customer-focused culture. The criteria ask the
key question of: How do you engage customers to serve their needs and build
relationships? The item also asks how an organization creates a customer-focused culture
that contributes to customer engagement and builds and manages customer relationships
and engagement. Finally, the item asks how an organization improves its customer-focused
approaches so that it can keep current with changing business needs and directions.
Continuous improvement of business processes is a core concept of the Baldrige criteria.
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Baldrige Award Criteria Item 3.2, Voice of the Customer, examines an organizations
processes for listening to customers and acquiring satisfaction and dissatisfaction
information, and using this information to improve marketplace success. It asks the key
question: How do you obtain and use information from your customers? It addresses how
organizations listen to customers to obtain actionable feedback, management complaints
and service recovery processes, determine customer satisfaction and engagement and
compare results with competitors and industry benchmarks, and measure customer
dissatisfaction for use in improvement.
Customer focus is a key requirement of ISO 9000:2000. For example, in the Management
Responsibility section, one requirement is Top management shall ensure that customer
requirements are determined and are met with the aim of enhancing customer
satisfaction. This puts the responsibility for customer focus on senior leadership. In the
Product Realization section, the standards require that the organization determine
customer requirements, including delivery and post-delivery activities, and any
requirements not stated by the customer but necessary for specified or intended use. In
addition, the organization must establish procedures for communicating with customers
about product information and other inquiries, and for obtaining feedback, including
complaints. In the Measurement, Analysis, and Improvement sections, the standards
require that the organization monitor customer perceptions as to whether the organization
has met customer requirements; that is, customer satisfaction. Note that even though some
basic customer-focused processes are required, the scope is not as broad as in Baldrige.
Customers are sometimes a hidden part of Six Sigma efforts, because the focus tends to
be on the improvement projects and measurement issues. However, a focus on the
customer is vital at every stage of Six Sigma projects. For instance, product design (and
design of associated manufacturing or service delivery processes) will be far more
successful if the voice of the customer, is included. A fundamental aspect of Six Sigma
methodology is identification of critical to quality (CTQ) characteristics that are vital to
customer satisfaction.
During the process of producing a product or service, it is important to gather information
needed by internal customers for process control activities to ensure that the product is
meeting the CTQs. If the CTQs are not being met, then the organization needs to develop
a better measurement and control system. Often, internal data that can improve control
processessuch as whether materials arrived on time, how often an accounting report had
incorrect data, or how many employees were absent from workare kept in departmental
records, where they are difficult to access. The solution may require a Six Sigma study to
determine the types of data and information that are needed to provide necessary
monitoring and control, and how the information gap (if one exists) can be closed. Finally,
at the delivery stage, customer satisfaction measures can provide clear information about
the success of Six Sigma efforts. In fact, many common Six Sigma projects revolve around
developing appropriate customer satisfaction measurement processes, as well as trying to
improve the design and delivery of CTQs identified through voice of the customer
processes.
The focus for Baldrige, ISO 9000 and Six Sigma is on obtaining actionable information
from customers. Thus, an organization should be able to tie the information to key
business processes, and should be able to determine cost/revenue implications for
14
improvement priority setting. Complaint aggregation, analysis, and root cause
determination should lead to effective elimination of the causes of complaints and to
priority setting for process, product, and service improvements. Successful outcomes
require effective deployment of information throughout the organization.
A key aspect of customer satisfaction determination is satisfaction relative to competitors
and competing or alternative offerings. Such information might be derived from
comparative studies or from independent studies. The factors that lead to customer
preference are of critical importance in understanding factors that drive markets and
potentially affect longer-term competitiveness.
ANSWERS TO DISCUSSION QUESTIONS

1.
One customer-focused organization with which this author has done business is (believe it
or not) a doctors office! This cardiologist effectively uses his front-office staff, medical
assistant, and physiotherapists to give the patient the best possible experience under
sometimes-extreme medical conditions. The front-office staff has a modern computer
system, so records are almost never lost or mixed up. Reminders are delivered via
telephone a few days prior to appointments. The medical assistant is trained to use the
computer system so that she has full information on each patient, is able to set up future
appointments without handing the patient off to the front office staff, explains the
medical procedure after the doctor has examined the patient, and handles prescription refill
requests directly for the patient. The physiotherapist phones to explain what is required
during the test (such as a stress test), and what follow-up exercises (if any) should be done
after the test. The cardiologist is rarely more than 10 minutes late taking a patient for a
scheduled appointment, and even then, apologizes for running that far behind on his
schedule!
The aspects that impress patients most are the empathy for patients, the scheduling
efficiency (reliability), and the obvious skill and trustworthiness (assurance) of the
empowered team in the organization.
2.
The No Waivers, No Favors, approach was probably instituted by management as a

result of losing revenues and profits, and possibly because of employee abuses of the
system. It is the unbending, bureaucratic approach that generally causes an organization to
experience a downward spiral of customer dissatisfaction, losses, and employee stress.
External customers who are affected will probably take their business to another airline, if
the route structure permits them a choice. Internal customers (the employees) will
probably continue to be in a state of fear and doubt and be less effective in doing their
jobs, and in treating their customers as they should be treated.
3.
Until faced with a crisis, firms may fail to recognize the importance of customers for
various reasons -- long running success in the marketplace, a dominant market share,
seeing the product from an "internal" perspective, failure to train employees to be sensitive
to customers, lack of in-depth knowledge of the product or the systems for producing it,
and failure to heed warnings of quality declines or competitive threats.
4.
15
This list of names for customer will vary depending on the experience and imagination
of the student. Some might include: patient, student, plaintiff, taxpayer, patron, applicant,
subject, passenger, complainant, insured, visitor, camper, investor, trainee, taxpayer, fan,
guest, buyer, client, and inmate (!).
5.
The chain of customers for a prescription may include the patient, the pharmacist, the
drugstore chain, a distributor, the manufacturer, and the raw materials suppliers and
processors. In the case of an Internet fulfillment process (for those who wish to use it), the
patient, the Web site designer, the pharmacist, the distributor, the manufacturer, and the
raw materials suppliers and processors would make up the chain.
6.
The answers will vary here, depending on students' perspectives. A starting point would be
to look at the types of bank services that the customer uses. For a rough-cut estimate,
the analyst might summarize customers by type (individuals, business, institutional) to
determine what their average fees were and how frequently they purchased various
services, such as checking, stock, mortgages, personal loans, etc. In addition, an analyst
might try to measure the amount of business that was received each year from word of
mouth referrals. From this a rough multiplier might be determined to say that each
loyal customer brought in 0.1 new customer per year, for example.
A more sophisticated approach was presented in a sidebar to the Fortune article about the
ACSI, cited in the chapter. It consisted of the following steps:
Decide on a meaningful period of time over which to do calculations (months, years,

decades), depending on the type of business.
Calculate the profit (net cash flow) per customer per year, segmented by age, income,
sales channel, etc.
Chart customer life expectancy by segment (what percent of older customers versus
new ones leave?)
Calculate net present value of each customer group for each year into the future, using
the desired return on assets as a discount rate.
According to the author, these figures can be used to do such what if calculations as
how much should be spent to attract customers, how much you should spend to retain
customers, etc.
7.
This question should generate a great deal of discussion about who are the "customers" in
a university setting. Customers will certainly include students (But the discussion here
should also bring in the difference between customers and clients. The latter go to an
expert, such as a lawyer, tax accountant, MD or professor, for their professional advice,
which must be followed, if satisfactory outcomes are to result). It will also include parents,
employers, alumni, business and non-profit organizations, taxpayers, the state government
administrators, and the general public. The customer-driven quality cycle may be seen as
applying to anything from registration processes to program and course design to
executive development courses to student athletics.
8.
This is a "hands on" exercise, based on students organizational involvement. Answers will
vary, depending on the organization chosen. For example, a fraternity would see members,
16
alumni, campus student affairs administrators, parents, charitable organizations for whom
projects are done, and the general public as customers.
9.
Once again, the question of "who is a customer?" must be addressed. The publics with
which a college or university interacts are important input for this discussion. They include
students, employers, faculty, administrators, parents, the state and federal government,
public and private organizations, and the general public. They would have various needs
that often overlap, but many are unique. For example students may need detailed
information about course schedules each term, but employers would only need information
about what classes were completed by candidates (and perhaps the grades received). The
employers generally would not need specific course schedules, unless courses were offered
on the employers premises.
10.
Best Buys segmentation of its customer base into fictitious people: Barryan affluent
tech enthusiast, Jilla busy suburban mom, Buzza young gadget fiend, Raya priceconscious family guy, and Mr. Storefronta small business owner, might all help the
company to better design its stores and train its employees. Customer focus requires
customer relationship management principles to be applied to both facilities and employee
training. Things that the company might do to customize its stores and service to these
customer segments include using CRM principles, such as:
Segmenting markets based on demographic and behavioral characteristics

segments
with predicted high customer response rates
Forecasting customer retention (and defection) rates and providing feedback as to
why customers leave a company
to bundle them (including training of customer service representatives)
Studying and predicting what Web (and store) characteristics are most attractive to
customers and how the Web site (or store) might be improved
The article shows what some of the impacts of applying these principles were for Best
Buy, as they developed the concept of centricity.
In late 2002 Best Buys CEO, Brad Anderson, started preaching the gospel of centricity to
upper management. Here's how it works: Figure out which customers make you the most
money, segment them carefully, then realign your stores and empower employees to target
those favored shoppers with products and services that will encourage them to spend
more and come back often. Then, test it out in stores.
Best Buy's researchers used sales and demographic data to determine whether a particular
location should be tailored to Ray or Buzz or one of the other archetypes. Nearly 40
percent of the 300 stores that have been redone aim at Barry -- containing a separate
department of home-theater systems, expert salesmen, and specialists in mobile
electronics.
17
Jill stores feature personal shopping assistants (PSAs) who know how to steer a
homemaker to the right digital camera for her family. Buzz stores have broad assortments
of video games. Stores can target more than one segment -- Jill and Barry departments
often share a location -- and a handful of Best Buys, like the one in the Dallas suburb of
Frisco, have all five segments going at once.
"Centrizing" a store is a big investment -- a typical Barry department alone requires as
much as $600,000 for lighting and fixtures. Best Buy also invests in schooling employees
in financial metrics such as return on invested capital so that they can gauge for themselves
the effectiveness of merchandising displays. (Recent example: Buzz departments have an
area where kids can try out Dance Pads, a video game accessory you activate with your
feet.) Specialized salespeople, such as PSAs and home-theater experts, get additional
training that may last weeks.
11.
Garvins manufacturing-oriented dimensions of performance, features, reliability,

conformance, durability, serviceability, and aesthetics may be used to assess quality of
tangible products, such as an electronic game, like a Wii. However for service products,
such as an Internet service provider, Garvins dimensions might need to be related to the 5
dimensions of reliability, assurance, tangibles, empathy and responsiveness in many ways.
It might be argued that it is difficult to fit customer personal service characteristics of
assurance, empathy, and responsiveness, from the second list, into more tangible
definitions of performance, conformance and durability.
12.
For each of the retail banking characteristics, we can see that:

a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
k)
l)
13.
Following through on promises -- reliability

Offering convenient banking hours -- responsiveness
Providing prompt customer service -- responsiveness
Properly handling any problems that arise -- responsiveness
Maintaining clean and pleasant branch office facilities -- tangibles
Demonstrating knowledge of bank products and services -- assurance
Giving undivided attention to the customer -- empathy
Never being too busy to respond to customer requests -- responsiveness
Charging reasonable service fees -- reliability
Maintaining a professional appearance -- tangibles
Providing error-free bank statements -- assurance
Keeping customer transactions confidential -- assurance
Deer Valley Resort exemplifies many of the dimensions of quality defined by Garvin such
as:
a)
b)
Performance: a products primary operating characteristics. Personnel mountain

hosts, friendly cafeteria workers; capacity - limited number of skiers on the
slopes.
Features: the bells and whistles of a product. Curbside ski valet services, heated
walkways, place to store skis without charge.
c)
d)
e)
f)
g)
18
Reliability: the probability of a products surviving over a specified period of time
under stated conditions of use. Complementary mountain tours (ensures that both
expert and intermediate skiers wont get lost or risk injury due to unknown
mountain terrain.)
Conformance: the degree to which physical and performance characteristics of a
product match pre-established standards. Food is consistently rated number one by
ski enthusiasts magazines.
Durability: the amount of use one gets from a product before it physically
deteriorates or until replacement is preferable. Ski storage to prevent equipment
damage.
Serviceability: the speed, courtesy, and competence of repair work. Well-designed
and spacious central gathering area by base lifts to speed access.
Aesthetics: how a product looks, feels, sounds, tastes, or smells. Over lodge,
parking, and ski slopes appear to be aesthetically pleasing.
Other key dimensions of service quality include:

1.
2.
3.
4.
14.
Assurance: the knowledge and courtesy of employees, and their ability to convey
trust and confidence. Examples include mountain hosts, tour guides, and ski
instructors
Tangibles: the physical facilities and equipment, and the appearance of personnel.
Tangibles include attractive facilities, and well-designed gathering areas for skiers.
Empathy: the degree of caring and individual attention provided to customers.
Some examples are the attitude of Bob Wheaton, VP and general manager, we
want our guests to know that they come first.
Responsiveness: the willingness to help customers and provide prompt service. No
specific examples were given, but it is likely that all personnel are trained to act
quickly to resolve problems.
Professors Kanos definitions, listed below, can form a starting point from which to begin
the discussion. Kano suggested three classes of customer requirements:
Dissatisfiers: requirements that are expected in a product or service. In an automobile,
a radio, heater, and required safety features are examples, which are generally not
stated by customers but assumed as given. If these features are not present, the
customer is dissatisfied.
Satisfiers: requirements that customers say they want. Many car buyers want a
sunroof, power windows, or anti-lock brakes. Although these requirements are
generally not expected, fulfilling them creates satisfaction.
Exciters/delighters: new or innovative features that customers do not expect. The
presence of unexpected features, such as a weather channel button on the radio or
separate rear-seat audio controls that allow children to listen to different music than
their parents, leads to high perceptions of quality.
15.
Several of these items are open to variations in individual opinion. For example, as more
and more fast food restaurants have play areas for children, it may become merely a
19
satisfier, rather than an exciter/delighter. Using Kanos model, the following may be seen
for items a through j:
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
Satisfier
Dissatisfier
Dissatisfier
Dissatisfier
Dissatisfier
Exciter/delighter
Dissatisfier
Dissatisfier
Satisfier
Exciter/delighter
16.
Freshness might be classified by considering the appearance, smell, feel, taste, and texture
of items. This could be expanded on in an affinity diagram. To measure satisfaction, a
questionnaire might be developed, or a focus group might be convened.
17.
Colleges and universities might use the customer-driven quality cycle in improving
processes such as online registration. Customer needs and expectations might include ease
of entry of data, easy correction of errors, ability to drop/add a course before a certain
deadline, and ease of payment. The university might identify these customer needs through
an online survey and/or a focus group. After software designers translated the voice of
the customer into product/service specifications for the online registration module,
various ways of testing the proposed design would have to be developed. Once the design
testing was done, the actual output could be tested (perhaps using the same focus group
as before). Finally, after the registration system went live, student users could then be
asked to respond to a satisfaction survey to assess whether improvements were needed,
for the measurement and feedback phase.
18.
The answers will vary here, depending on students' perspectives. Some examples of
moments of truth in universities may be seen when registering for classes; paying fees;
coming in contact with advisors, food service, or housing personnel; and day-to-day
contacts with professors in the classroom.
19.
A customer satisfaction policy might be the following: Our employees are dedicated to
doing everything possible to ensure that our customers are delighted, not just satisfied,
with our products and services. To achieve this high level of product and service delivery,
we promise to:
a. Treat customers with respect
b. Provide knowledgeable service
c. Replace any defective product, regardless of reason, within the first year after it is
purchased
d. Match any legitimate price of a competitor for the same or equal product
e. Measure the level of customer satisfaction that we have and constantly strive to
improve it
20.
20
What lessons can organizations learn about customers from the following experiences?
In shopping for a cell phone, a customer met a salesperson who introduced herself,
asked her name, went through the features that related to her needs, and didnt try
to sell her the most expensive phone.
A woman encountered a sales person in a home improvement store who
commented, Oh, shopping for your husband?
A couple stranded in a restaurant booth with no waiter or silverware made eye
contact with a waitress who quickly replied, Your waiter is late. I cant take your
order because this isnt my station.
While shopping for a TV antenna, a customer asked the difference between various
models. The salesperson replied, Some cost more because they look better.
As pointed out in the article, the main lessons to learn are to train customer contact people
(CCPs) to focus on the basics of courtesy and product knowledge. The above responses
were a few of those experienced by authors Cindy Lewis and Marian Brzykcy last summer
, who decided to channel their own mounting dissatisfaction as customers into a full-flung
survey of almost 500 retailers. At home-improvement stores, gas stations, and fast-food
restaurants, the sisters shopped, spent money, and took careful notes. Their bottom line,
after a three-month, unscientific $5,000 shopping spree, was a sad conclusion: Only 3% of
their store visits had left them "very satisfied." The remaining 97% failed. Their advice to
CCPs:
The consultants offered these lessons learned to CCPs who want to be successful:
Make It A Relationship (as did the salesperson in point 1, above)
Listen Carefully. (As a salesman Lewis encountered in a home-improvement store didn't
bother to do in point number 2. The [expensive] power tool that she had come in to buy
stayed comfortably on its shelf.
Embrace Positivity. "Shouldn't," "can't," "not my department"-- have no place in
customer service as the waitress in situation 3 had failed to learn.
Assume All Customers Are Royalty. Any customer can make your day--so treat every
customer like they're the one. Dressed in casual garb, Brzykcy walked in expecting to
open up an account for her aunt. After being "treated like an unwelcome guest" she
decided to take her aunt's money-market accounts and investments elsewhere.
Do Your Homework. Product knowledge and common courtesy will go a long way
towards making the sale (which escaped the attention and/or training of the salesperson
in situation number 4)."Ask yourself," Lewis says, "is the way you treated your last
customer the way you'd treat your mother? If the answer is 'I don't know,' you need a few
tips."
21.
This is a "hands on" applied exercise for the student group. For example for the employees
who take phone orders, it should be specified that the employee obtain information on the
name, address, phone number; directions to location, if not easily found; pizza type,
including crust, toppings, and size; side items; enter the order into the register or
computer; relay the total cost to the customer; relay the order to the kitchen; provide any
21
special instructions, as needed to cooks or delivery people. Training could take the form of
a process checklist, watching an experienced employee, and supervised order taking for a
specified time period until the process is well demonstrated.
22.
Answers will vary, depending on the e-commerce business that is chosen. One of the case
studies on Amazon.com provides a benchmark for how customer-focused such a
business can be.
23.
The experience of the student who asked for the satisfaction survey and then received
better service indicates that the company is using the customer satisfaction survey to
control, rather than to continuously improve, customer service. This is similar to a
manufacturer who tries to use quality control to weed out defective product at the end
of the production process. In this case, the company is trying to weed out poor service
by reviewing the comment cards after the customer is gone, then asking, What could we
have done to improve service? Also, employees who fear that they will be punished for
bad comments on the survey will do as this employee did, or else try to find a way to hide
or destroy the unfavorable comment cards.
24.
As pointed out in the text: Customer satisfaction measures may include product attributes
such as product quality, product performance, usability, and maintainability; service
attributes such as attitude, service time, on-time delivery, exception handling,
accountability, and technical support; image attributes such as reliability and price; and
overall satisfaction measures. Thus, to design satisfaction surveys for high school students
on behalf of colleges where they attend, or businesses who might hire them directly out of
high school, questions relating to recruitment and enrollment at the college or recruitment
and hiring at the business would be appropriate. Specifically, satisfaction with the colleges
or business application form (ease of use, relevant questions, etc.) could be probed. The
satisfaction survey could also ask for responses on degree of empathetic interactions with
counselors or job interviewers, amount of waiting time versus service time experienced,
and comfort level of surroundings. Of course, a measure of overall satisfaction would also
be a must item on such satisfaction surveys.
25.
There are a number of problems with the design of the questions for this survey:
a.
b.
c.
d.
e.
What does professional mean -- well dressed, knowledgeable, polite?

Whats an ETA -- estimated time of arrival, electronic transmission act?
What does reasonable mean -- five minutes, 30 minutes, an hour?
Is food safety ever not important? This is an obvious answer!
Besides not specifying the meanings of friendly and helpful this question asks
the respondent to lump the two characteristics together. How should one
respond if the representative was friendly but not helpful, helpful but not friendly,
both, or neither?
Also, questions that are not asked correctly can provide little or no information because
they may be ambiguous, loaded, too complex, filled with acronyms, or self-evident.
26.
22
On the importance ratings, it appears that the three top items are mechanical condition, car
cleanliness and staff friendliness. Checkout and check-in speed and getting reserved car or
better are moderately important. All others are relatively unimportant.
Regarding customer ratings of performance, there are 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.
27.
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 5point 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.
28.
This is probably the most challenging question of all, for a business. It would be
particularly hard to come up with a single verifiable figure or average value per customer.
A bank might attempt to quantify the value of a customer by determining the revenue
generated by various classes of customers (individual account holders, small businesses,
and large businesses). Then, the number of years that the average customer in each class
remained a customer would have to be researched. Finally, a discount factor (for
discounted present value calculations) might have to be chosen and used for comparison
purposes. As Deming pointed out, the impact of poor or good word-of-mouth
concerning the quality of the banking experience and how that may result in friends and
family members lost or gained as customers can never be estimated with any accuracy.
29.
23
As pointed out earlier (see review question 28), customer satisfaction efforts fail due to
poor measurement, useless questions, lack of proper focus, no comparative data,
inattention to potential and former customers, and confusing satisfaction with loyalty. The
Baldrige criteria (see review question 30) deal with some of the questions of why
customer satisfaction efforts fail by examining how a company determines requirements,
expectations, and preferences for customers and markets, and how it builds relationships
with customers and determines their satisfaction.
SUGGESTIONS FOR PROJECTS, ETC.

1.
The ACSI uses a proprietary survey technique, where fee-paying subscribers provide data
about themselves and their industry to surveyors and receive comparative information and
the very latest survey results. The broad ACSI results are published after-the fact each
year. See the source in Review Question 5, above. For the most recent information on the
ACSI, consult their web site at http://www.theacsi.org
2.
This project can provide some interesting insight into students perceptions of how
customer satisfaction may be measured beyond traditional course evaluations. Some
possibilities might include fast feedback forms at the end of each class, anonymous
Internet messaging, used of discussion boards on the class web site, etc.
3.
Some characteristics that are brainstormed may include location of the store, store hours,
layout of the store, knowledge of sales staff, friendliness of personnel, variety of
selections, price, up-to-date merchandise, policies and procedures for purchase returns and
availability of technical support and service. Review Question 24 can be used as a guide to
developing an appropriate survey.
4.
Western American Airlines

a.
An affinity diagram could be constructed by putting each of the customer service

requirements on a 3" x 5" card and clustering items that were similar to each other
under a category heading. Category headings might include: reservations, baggage
handling, facilities and preflight service, aircraft, amenities, food service, and in
flight service. See diagram below, where customer service items are matched with
categories.
b.
Once the Affinity Diagram has been developed, the design of a customer survey
questionnaire would be straightforward. Sections could be included for each of the
designated categories of: reservations, baggage handling, facilities and preflight
service, aircraft, amenities, food service, and in flight service. Questions could be
constructed on a scale of 1-7 or 1-10, with 1 = Very poor and 7 = Outstanding.
For example, in baggage handling, the questions might include:
Very Poor
Convenience of baggage check-in
Outstanding
1
2
3
4
5
6
7
+-----+-----+-----+-----+-----+-----+
24
Timely baggage claim on arrival
1
2
3
4
5
6
7
+-----+-----+-----+-----+-----+-----+
Responsiveness/ability to solve
problems & answer questions
1
2
3
4
5
6
7
+-----+-----+-----+-----+-----+-----+
Overall quality of service provided
1
2
3
4
5
6
7
+-----+-----+-----+-----+-----+-----+
Note that questions on overall satisfaction might be appropriate for each of the categories.
Also, questions about service personnel courtesy might be appropriate in any category
where there is face-to-face contact of employees with customers.
25
AFFINITY DIAGRAM FOR WESTERN AMERICA AIRLINES
Reservations
courteous reservation personnel
reservation calls
answered promptly
correct explanation
of fares and
schedules
ability of
reservation agents
to answer questions
Baggage handling
convenient
baggage check-in
timely baggage
claim upon arrival
ability to solve
baggage claim
problems
Facilities and
Preflight Service
timely & accurate
communication of
pre- boarding
information
Food Service
quality food
good beverage
selection
efficient ticket line

& waiting
procedures
sufficient quantity of food
convenient ground
transportation
Amenities
courteous, efficient
gate personnel
efficient seat
selection process
courteous, efficient
sky cap
provide assistance
for passengers with
special needs
courtesy of ticket
counter personnel
convenient parking
close to terminal
good selection
magazines and
newspapers
interesting
Western American
in-flight
magazine
good variety of
audio/visual
programming
Aircraft
appealing interior
appearance
seats in good
condition
clean lavatories
Aircraft
(Continued)
good quality audio
/visual system
in-flight telephone
access
comfortable seating
and leg room
quality public
address system inflight
Inflight Service
ability to solve
problems, answer
questions in flight
efficient, attentive
attendants
flight attendants
with good attitudes
flight attendants
know airline
programs &
policies
timely, accurate
flight information
(in-flight)
5.
Answers will vary, depending on the sophistication of the business in complaint handling.
Many small businesses will ensure that making restitution, or providing perks satisfies
the complaining customer. Not many will gather and analyze data over an extended period
in order to categorize and make improvement in the process.
6.
Answers will vary, depending on the type of business and the web sites involved. There are
sites that have won awards that may be looked at for some ideas on best practices
7.
Answers will vary, depending on the cards that are gathered and who designed them.
8.
This is a hands-on exercise to provide practice in developing an affinity diagram.
9.
This is a hands-on exercise in designing a questionnaire and testing it out.
10.
26
This is also a hands-on exercise in designing a questionnaire. This type of questionnaire

might be useful for the college or university, because it could reveal aspects of the campus
tour that students are very interested in and those that they could care less about. More
time might be spent on the former stops on the tour, while the latter features of the tour
might be reduced or eliminated.
ANSWERS TO CASE QUESTIONS

I. Paulis Restaurant and Microbrewery
This is an actual author experience. One of the authors had sent the email to the restaurants
corporate office in another city, and the next day received this reply from the general manager of
the restaurant:
I would like to take this opportunity to thank you for your comments regarding your
unacceptable experience at [our restaurant] on Saturday. I cannot begin to apologize
enough or to express how disappointed I am that we failed to deliver you the exceptional
service experience that you and your guests deserve. I truly appreciate that you brought
your guests here before going to the theater and I know that when you have tickets to a
show, the last thing you need is to have to rush through your dining experience to avoid
being late. If you will allow me, I would like to invite you, your wife, and your friends
back to our restaurant as my personal guests. Please call me xxx-xxxx or contact me via
e-mail so that I may confirm a reservation. I look forward to hearing from you so I may
have the opportunity to make this right for you and your guests.
Most students will probably create a similar response. Good service recovery is prompt,
empathetic, and provides some way to entice the customer to return and make up for the upset.
Needless to say, this restaurant made a customer for life.
II. First Internet Reliable Bank
1. The closed-ended and open-ended questions provided different perspectives on customer needs
for FIRs leadership team. The closed ended responses, when matched with customer
demographics, confirmed that FIR customers were generally typical of Internet banking
customers, as suggested by the Pew survey. Most had high-speed Internet connections, were men,
and were in medium to high socio-economic categories. As might be expected, because of their
location in the northwest U.S., approximately 50% of their customers were in technical
occupations.
One of the most important (open-ended) questions involved customer service perceptions.
Customers were asked to name the dimension of customer service that gave them the most
satisfaction. Interestingly, these responses centered on personal contact with customer service
representatives. The top responses included: the accessibility provided by FIR to discuss problems
with customer service representatives (CSRs) (16 percent); the relatively short time it takes to
resolve most problems (15 percent); the quality of the response provided by CSRs (14 percent);
and the manner and approach of CSRs (11 percent).
27
2. FIR is targeting customer segments that include both individual and commercial accounts. On
individual accounts, bill-paying and various types of loans, such as mortgage and home equity
credit lines seemed to be the most important services. Commercial customers are using the bank
for loans, credit lines, and national and international money transfers. The issues that were
brought out in the open-ended questions point to the need for improvements. Customers
perceived the need to have access to cash, and perhaps to make deposits, via an ATM, and for the
bank to provide more security features. Commercial customers also saw an added need for risk
protection when/if hackers accessed their accounts.
3. FIR might consider some specific activities and practices to address these issues, such as:
Partnering with another bank to provide ATM access. If this partner could also handle
deposits, that would alleviate two of the issues mentioned in the survey
Developing processes to prevent hacking and to educate customers on how to avoid
identity theft
Develop a way to insure against losses from hackers for commercial customers, perhaps
by providing low-cost insurance policies
III. Gold Star Chili (A)
1.
Some moments of truth in Gold Stars environment start with the corporate franchisee
relationship, where: corporate managers have signed a pledge guaranteeing to return calls
within 24 hours. The moment of truth is whether those calls are consistently received
within that time frame. Another moment of truth opportunity relates to franchisees
reporting any problem with product quality, and whether Gold Star will follow up by
hand-delivering replacement product the same day. There is an excellent moment of truth
opportunity for the many franchisees who strive to build relationships through local store
marketing. They, and the owner/managers who are active in the community with
sponsorships of teams, school programs, and school achievement awards must follow
through to ensure that the moment of truth in delivering what was promised is realized.
2.
Gold Star Chili defines two key customer groups: direct customers who use Gold Star
products and services, and indirect customers with whom Gold Star has other
relationships. Direct customers are divided into six customer segments, determined by
product use: restaurant customers, franchisees, franchise applicants, retail customers, retail
wholesalers, and mail-order customers. Indirect customers include product suppliers,
service suppliers, co-packers, brokers/consultants, shareholders, and regulatory agencies.
Each of the key customer groups and the segments within them must have their own
customer-focused practices. For example data on customer satisfaction, complaints and
complaint resolution, and product wants and needs must be tailored to each group and
segment. One size fits all wont.
3.
Gold Star could collect direct data from franchisees, retailers and wholesalers on
complaints, product movement, and what works well, or not so well, through frequent
personal contact between company franchise coordinators and franchisees. For suppliers,
methods of supply, billing problems, etc. could be areas in which Gold Star could listen
and learn from these customer groups. From restaurant customers, satisfaction surveys
and focus groups could be used.
28
For franchisees, wholesalers and retailers effective listening and learning could take place
using formal surveys and focus groups, as well as informal determination of product and
service features through quarterly and semiannual meetings, daily and weekly phone calls
to franchise service representatives (FSRs), and discussions with delivery personnel. For
restaurant customers, in addition to the traditional satisfaction surveys, customer comment
cards, and complaint monitoring, use of store managers contacts and discussion with
regular customers could be another very effective method for listening and learning.
4.
5.
It would seem that customer loyalty is an important requirement for success in Gold Stars
competitive retail business environment. Thus questions relating to loyalty would be
desirable, such as measures of:
Overall satisfaction.
Likelihood of a first-time purchaser to return to the restaurant.
Likelihood to recommend.
Likelihood to continue purchasing the same products from the menu.
Likelihood to purchase different products.
Likelihood to increase frequency of visits to the restaurant.
Likelihood to switch to a different restaurant or chain.
For franchisees (who are customers of the corporation), survey questions relating to
franchise service to the franchisee would need to be asked. For example, franchisee
satisfaction with:
- Geo-demographic analysis of locations prior to building
- Reliability, empathy, accuracy, responsiveness, etc. of service from FSRs who are
responsible for staying in touch with franchisees and meeting their needs when placing
orders
- Opportunities to listen, learn, and trade ideas through regular franchise meeting and
training sessions
- Quality of competitive data available from Gold Star, such as might be obtained using
mystery shoppers who visit Gold Star and competitor locations
IV. Novel Connect Customer Focus
Although not required for this exercise, the feedback report comments for this case, based on the
2008 Baldrige criteria, are enlightening and serve the purpose of addressing the issues of the
Category 3 response of Novel Connect. The companys response in their application will not be
duplicated here. See the Novel Connect case materials in the Baldrige Materials folder.
3.1 Customer and Market Knowledge
STRENGTHS
During the SPP, the Marketing and Public Relations Team reviews existing market
segments and identifies new segments. The team has identified seven key niche customer
29
groups (Figure 3.1-1) that are subsegments of the three main market segments (personal,
business, and government consumers). Market data and information are provided to Novel
Connects Product Engineering and Design Team to develop new products/features. A
cycle of improvement resulted in reversing the sequence of incorporating customer input
into the process; information from customers and potential customers is now considered
before identifying potential products and product features.
To gather information on customer requirements, needs, and changing expectations, Novel

Connect has established Five Voices of the Customer (VOC, Figure 3.1-2): customer
complaints, market research, customer surveys, customer relationship management, and
customer advisory group communications. These mechanisms vary in their methods,
locations, and frequency of use.
VOC data are available to all employees in the MAP database for use in process
improvements and are provided to the Customer Service Team, which oversees the call
center. VOC data are sent to retailers and the carrier on a quarterly basis. All customer
data and information are analyzed and used as inputs to the SPP and to the Product,
Feature, and Process Development (PFPD) Process.
To help keep its VOC methods current, the Marketing and Public Relations Team reviews
them annually during the PIP that precedes the SPP. In addition, the Allegiance Survey,
which is reviewed at the annual Improvement Day, includes a question about ways to
improve listening and learning methods.
OPPORTUNITIES FOR IMPROVEMENT
While plans are in place to seek information from customers of competitors, it is unclear
how Novel Connect currently includes customers of competitors and other potential
customers and markets in its determination of customer groups and market segments.
Without considering the requirements and expectations of all customer groups, Novel
Connect may not succeed in fulfilling the requirements of all of its target customers and
markets and may miss opportunities to penetrate new niche markets with innovative
products.
While Novel Connect uses the Five Voices of the Customer (Figure 3.1-2) to gather
information from and about customers, a systematic process is not described for
using this information to determine customer requirements, needs, and expectations
or to determine needed improvements in its work systems and processes. Without
such a systematic process, Novel Connect may not be able to fully understand its
customers purchasing decisions, achieve customer loyalty, or build customer
relationships.
It is not clear how Novel Connects listening and learning methods include former
customers or vary for its customers, customer groups, and market segments. The
absence of a systematic process to tailor its listening and learning methods for its
diverse customers (which range from preteens to the Department of Homeland
Security) or to most effectively use the information gathered from its numerous
30
sources may make it difficult for Novel Connect to address customer requirements
and achieve its vision to be the most innovative company for mobile communication
in the world.
In general, it appears that Novel Connect is in need of systematic processes in order to
receive maximum advantage from analysis of the Five VOC framework. Specifically, they
need to survey customers of competitors and potential customers to determine
requirements and expectations. In addition, they must develop a systematic process for
analyzing and understanding customers purchasing decisions and factors that lead to
increased customer loyalty and better customer relationships. Finally, work needs to be
done to tailor its listening and learning methods to diverse customer segments. The
company has a good complement of tools in its Five VOC framework, including customer
complaints, market research, customer surveys, customer relationship management, and
customer advisory group communications. It needs to systematically apply these tools,
plus use more effective statistical analysis, perhaps using the Key Customer Focused
Practices for Performance Excellence in Table 5.1 as a guide.
BONUS MATERIALS
Quality in Practice - Waiting Time and Customer Satisfaction at Florida Power and Light
1.
People who are waiting almost invariably overestimate the time that they have waited
when they have no objective means of measurement. As FP&L found, People were willing
to wait longer and more patiently when they had an estimate of the required waiting time.
For organizations that are trying to set standards, two conclusions may be drawn: a)
people don't like to be made to wait, so try to minimize waiting time, and b) if waiting
time is inevitable, try to provide an estimate of the length of the wait for customers.
2.
FP&L's analysis went beyond the "rules of thumb" given above and classified the
interactions between waiting times and customer satisfaction. In summary, they found:
Customer satisfaction generally decreased as the length of wait increased.

Customers were generally willing to wait longer if they had an estimate of the
amount of time that they would have to wait.
If customers were given a choice of waiting or calling back later, they had higher
levels of satisfaction.
Customers expected to wait different lengths of time, depending on the type of
service that they were trying to receive.
With analysis to "tailor" to these findings to specific firms, these general ideas might be
tested and used in any business where people place orders over the telephone.
Quality in Practice - Improving Customer Satisfaction at a Software Support Call Center
1.
The case suggests that it is often difficult to understand customers true needs and
expectations. The study required an iterative process to get past the obvious
conclusions, develop a workable hypothesis, and test it out. The case also shows that it is
31
often necessary to bring the perspectives of diverse groups to bear on a problem, rather
than depend on the analysis and insights of only one or two people. Finally, the case shows
that it is possible to train individuals to combine technical skills with human skills in order
to be effective in service delivery situations.
2.
The transparency principle is a 3-stage process that involves:
Immediate establishment of the engineer as a problem solver and expert

Initiating the troubleshooting
Open admission of a wrong hypothesis (if required)
These three steps appear to be extremely simple and almost intuitive. However, it took
considerable research effort to develop them. The implications of this are that it takes
more than technical expertise to satisfy/delight the customer in service delivery (as well as
in providing more tangible products). The voice of the customer must be sought out and
listened to. The difficult work of translating the voice of the customer into technical
requirements must be done. Finally, thorough, effective training is required so that
customer service personnel know their roles and can deliver the expected service.
3.
The learning from this case could be applied to similar technical situation, but might
extend even further than the high tech applications in which it was first developed. In
similar high tech areas, the transparency principle could certainly be applied to a number
of different technical products, such as computer hardware, printers, VCRs, fax machines,
etc. It might also be applied to other customer service situations, such as a travel agency,
parts distribution center, etc.
BONUS CASES
Case - American Parkinson Disease Association Center
1.
The American Parkinson Disease Association Center (APDAC) has patients and their
caregivers who may come to them from neurologists, or perhaps directly, based on patient
contacts. Since the purpose of the center is to support, educate and counsel, a variety of
delivery methods must be used. Some of those were telephone, mail Internet, person-toperson contact, support groups, chapter work, and an annual symposium.
2.
To build relationships with customers and suppliers, they must be seen as completely
professional and having the latest up-to-date information and resources. The center needs
to be very customer focused, using the latest technology to keep up with clients, doctors,
and advances in the field.
3.
To develop a TQ organization, they need a very good database and computer system. This
would allow them to personalize information from all clients, doctors, and research
facilities where they send information to, or gather information from. Regular follow-up
with all clients, customer and supplier satisfaction surveys, and regular training for front
line customer contact people would be essential.
32
Case - Cincinnati Veterans Administration Medical Center
1.
The CVAMC offers a wide range of services to veterans, who comprise their major patient
category. They include primary and internal medical care, with several sub-specialties;
general surgery, with several sub-specialties; mental health, with psychiatric and
psychological support care including several disorders; neurology, and physical medicine
and rehabilitation services. In addition they support trainee education and pursuit of new
knowledge through research. Other customers include the families of veteran patients, the
veterans support organizations (VSO), the trainees including residents and medical
students, and the staff at the other VISN facilities. There is a special relationship with the
University of Cincinnati. This involves all three major missions of this medical center. The
majority of the staff physicians have joint appointments with the University. Some
specialized care is provided through sharing agreements with the University, including
radiation therapy, special radiological studies, and cardiac surgery. The CVAMC is a
major teaching center for many of the University's residents and medical students. The
CVAMC also supports researchers with joint appointments at the University. There is a
partnership between the unions and the Medical Center. Finally, there is a partnership
between the Medical Center and a local elementary school.
To achieve its vision of being truly customer focused, the CVAMC should develop a
number of approaches to understand customer expectations, deploy short-term and longterm requirements, ensure relevance of current products/services, and develop new
opportunities.
2.
It should determine which of its services are the strongest in meeting current customer
needs, which have opportunities for improvement, and what factors contribute to each.
For example, how could it build on its strength in having ties to a research facility (the
University of Cincinnati), its ability to purchase materials at low cost through a buying
network, the vertically integrated health care delivery system that it has built, and
specialties in areas of use to an aging population of health care customers?
It should determine market needs of current customers that are well served versus
those that are under-served and consider ways to extend services to the under-served.
Using targeted surveys or focus groups to investigate needs could do this.
It should determine the factors that competitors use to appeal to potential customers
who might switch to CVAMC if those factors were available. For example, how might
veterans who receive Medicaid support be served by CVAMC?
It should determine areas of possible growth of products or services. For example,
could outreach programs be established in other areas, similar to those in Kentucky?
The VA Survey appears to have broad coverage, but has some opportunities for
improvement, as well. The following is a brief case analysis according to the dimensions of
service quality developed earlier in the chapter.
Analysis
Introduction
33
The focus of a customer satisfaction survey, such as developed by the CVAMC, should be
to obtain actionable information from customers. To be actionable, an organization should
be able to tie the information to key business processes, and should be able to determine
cost/revenue implications for improvement priority setting.
CVAMCs vision is to shape our future by breaking the traditional VA mold,
building on our strengths, and emerging as the health care center of choice for all
Veterans. As pioneers of change we will:
A.
B.
C.
D.
E.
Establish the patient at the core of all processes with the focus on continuity of
care leading to optimal patient outcomes.
Develop a united team of competent, caring, empowered employees committed to
providing service that exceeds expectations.
Foster unprecedented labor/management trust and cooperation.
Create a proactive organization that is responsive, streamlined, and personal.
Be recognized as an innovative, vital health care leader and educational resource in
our VA system and the Greater Cincinnati community.
Information for Analysis

The following classifies the questions in the questionnaire according to characteristics of
service quality.
Measurement
Reliability
Assurance
Tangibles
Empathy
Responsiveness
Perceived Performance
Questions 2, 21, 24, 34
Questions 3, 5, 6, 7, 8, 10, 12, 16, 18, 23, 26, 38, 39, 40, 41, 42, 43
Questions 8, 9, 11, 14, 15, 17, 20, 22, 28, 35, 36, 37
Questions 4, 13, 19, 25, 27, 29, 30, 31, 32
A few questions were too general or global to classify into one of the above characteristics
of service quality, such as Questions 1, 44, 45, 46, 47.
Note also that there were no questions relating to tangibles, such as facilities and
paperwork, which could affect the patients overall perceptions of quality.
The following sections analyze the extent to which the survey provides actionable
information for improvement, address key patient needs and expectations, and address
satisfaction and loyalty.
Actionable information for improvement
Although a number of the questions addressed areas related to key business processes and
key patient needs and expectations, few would be considered actionable for improvement
purposes. For example, it is unlikely that patients would be able to accurately judge how
long their wait should be, whether enough information was given to family members, and
how long they had to wait before receiving pain medicine.
Address key patient needs and expectations
34
The background information provided by hospital management indicated that patients

have the following needs and expectations:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Veteran patients require accessibility to care. This includes the need to be seen at a
location convenient to them, as much as possible.
They must be able to get an appointment with their clinicians within a reasonable
period of time. A thirty-day limit for specialty clinic consultation has been targeted
as a key customer service standard.
Patients do not want to have to wait for long periods on the day of their
appointments.
They need access to the latest technology and specialty skills as appropriate for
their medical conditions. This is important even if the CVAMC does not have the
necessary equipment or personnel on site. The CVAMC must then contract for
those services.
Veteran patients need to have continuity of care. They want to see the same
clinician each visit to develop rapport with someone who understands their
particular needs.
They want that provider to be aware of the results of any specialty consultations or
hospitalizations.
These patients deserve the availability of a range of services to meet their needs.
They recognize the need for interdisciplinary approaches to solve some of their
health problems.
They demand to be heard during medical decision-making and want their end-oflife wishes respected.
Needs indicated in items 1, 2, 4, 6, and 7 were not specifically addressed in the survey.
Others were touched on, but not fully addressed, such as 3, 5, 8, and 9.
Address satisfaction and loyalty
General questions were asked in order to ascertain an overall quality rating, determine
whether a person would choose free care at another hospital if available, and assess
whether a complaint was registered. However, these do not fully address whether the
patient was delighted, satisfied, or dissatisfied; why the patient would or would not choose
to return to the VA hospital; and whether the complaint was major or minor.
Conclusions and recommendations
The patient survey can be one of several tools that the CVAMC uses to assess whether it
is meeting or exceeding the goals listed in its vision statement. The survey should be
redesigned to provide actionable information for improvement, address key patient needs
and expectations, and address satisfaction and loyalty. Thus, each question must be tied
directly to goals in the vision statement and to patient needs and expectations. Additional
questions should be developed to address tangibles, customer satisfaction, and loyalty.
Finally, the questionnaire should be pilot-tested with a panel or focus group containing
staff members, doctors, nurses, and patients, in order to gage validity and reliability.
35
Case - The Case of the Missing Reservation
1.
Although it is difficult to speculate on the amount of "empowerment" that a restaurant

hostess/manager might have, it is apparent that she did not attempt to "move heaven and
earth to satisfy a customer" as employees are empowered to do at Ritz-Carlton. As one
student pointed out in a write-up of this case, ... any business top goals include customer
satisfaction, customer retention, and increase in market share. None of the actions of the
restaurant personnel seemed to be aimed towards meeting these goals.
In this situation the manager might have seated the Marks party and made plans to set up
another table for other guests who were arriving later. She might also have provided some
compensating factor, such as giving the party 25% off on their bill.
2.
Different people have a higher and lower tolerance for poor service. Most people would
not have taken the time to write and send a letter as Mark did. The complaint should have
been taken seriously, since only a small percentage of unhappy customers bother to
complain. Again, the response from the hotel inadequate. The letter was "delegated" to the
"quality person," the response letter was polite, but simply stated the facts without
apology for any mistake. There was no offer of service, refund or other compensation for
inconvenience. The student cited above developed this table:
Measurement
Perceived Performance
Reliability
(-) Customer had made reservation and rightly expected guaranteed and timely
restaurant seating.
Assurance
(-) Although not unpleasant, manager was not accommodating and did not exude
confidence that customers would be seated ASAP.
Tangibles
n.a.
Empathy
(-) No sign of caring or individual attention; not empathetic or sympathetic.
Responsiveness (-) Not at all responsive; no sense of urgency to provide prompt service to
customers.

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CHAPTER 5

Develop an appreciation for customer engagement, which refers to customers investment

Introduce the American Customer Satisfaction Index (ACSI) - a national measure of

Define product quality dimensions including performance, features, reliability,

Know that gathering customer information is performed by various methods, or listening

Customer perceived value (CPV) is an alternative to traditional satisfaction measurement,

has deep selection that is unconstrained by shelf space.

Segmenting markets based on demographic and behavioral characteristics,

Amazon.coms operating efficiencies in order fulfillment activities are almost bound to

ANSWERS TO REVIEW QUESTIONS

Customer engagement refers to customers investment in or commitment to a brand and

The American Customer Satisfaction Index is a national measure of customer satisfaction,

The dimensions of quality defined by Garvin are:

Performance: a products primary operating characteristics. Using an automobile as

As suggested in answer 9 above, the voice of the customer is an expression of the

Focus groups--A focus group is a panel of individuals (customers or non-customers)

Direct customer contact--In customer-driven companies, top executives commonly

A "moment of truth," in a service industry, is the moment when a customer comes in

Customer contact requirements are measurable performance levels or expectations that

Segmenting markets based on demographic and behavioral characteristics

Determine the purpose

Customer satisfaction survey questions must be properly worded to achieve actionable

Customer perceived value measures how customers assess benefitssuch as product

In the Baldrige Award Criteria, Item 3.1, Customer Engagement, examines an

ANSWERS TO DISCUSSION QUESTIONS

The No Waivers, No Favors, approach was probably instituted by management as a

Decide on a meaningful period of time over which to do calculations (months, years,

Segmenting markets based on demographic and behavioral characteristics

Garvins manufacturing-oriented dimensions of performance, features, reliability,

For each of the retail banking characteristics, we can see that:

Following through on promises -- reliability

Performance: a products primary operating characteristics. Personnel mountain

Other key dimensions of service quality include:

What does professional mean -- well dressed, knowledgeable, polite?

SUGGESTIONS FOR PROJECTS, ETC.

Western American Airlines

An affinity diagram could be constructed by putting each of the customer service

Timely baggage claim on arrival

Overall quality of service provided

efficient ticket line

sufficient quantity of food

This is a hands-on exercise to provide practice in developing an affinity diagram.

This is a hands-on exercise in designing a questionnaire and testing it out.

This is also a hands-on exercise in designing a questionnaire. This type of questionnaire

ANSWERS TO CASE QUESTIONS

To gather information on customer requirements, needs, and changing expectations, Novel

OPPORTUNITIES FOR IMPROVEMENT

Customer satisfaction generally decreased as the length of wait increased.

The transparency principle is a 3-stage process that involves:

Immediate establishment of the engineer as a problem solver and expert

Information for Analysis

The background information provided by hospital management indicated that patients

Although it is difficult to speculate on the amount of "empowerment" that a restaurant

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