Professional Documents
Culture Documents
Source : Unknown
Pakistan Institute of
Customers
Introduction
Types of Customers
Customer-driven Institutions
Customer Needs, Expectations and Priorities
Customer Relationships Management
Customer Identification and Segmentation
Communication Techniques
Multiple Customer Management and Conflict
Resolution
Customer Partnerships
Customer Retention
Pakistan Institute of
INTRODUCTION
Introduction
CUSTOMERS are the most
important people in any institution,
not PROFITS or GROWTH.
The element of customer
satisfaction has advanced to the
forefront of the Quality effort.
Pakistan Institute of
Introduction
Companies that have placed an emphasis
on customer satisfaction did so :
To improve their product cost position
through a total quality program which
shifted to customer satisfaction.
To improve their market positions which
started with better product quality then
moving to customer satisfaction.
Pakistan Institute of
Introduction
The customers perception of
Quality is the single most
important factor for market share
and profitability and companies
must combine their product quality
with the delivery of service to
provide the highest customer
satisfaction
Pakistan Institute of
TYPES OF
CUSTOMERS
Types of Customers
Shareholders
Customers
Company
Employees
Regulators
Community
Suppliers
Organizational Stakeholders
Pakistan Institute of
Types of Customers
External Customers
Final Customers/End-Users
Intermediate
Internal Customers
Pakistan Institute of
10
Types of Customers
The next operation as customer
- Kaoru Ishikawa
Pakistan Institute of
11
Internal Customers
Triple Role
Needs
Supplier
Input
Needs
Processor
Feedback
Pakistan Institute of
Output
Customer
Feedback
12
Types of Customers
An Example
Pakistan Institute of
13
Types of Customers
Exercise
External Customers - 3 main
customers (describe type)
Internal Customers - 3 main
customers
Pakistan Institute of
14
CUSTOMER -DRIVEN
INSTITUTIONS
15
16
17
Product Service
quality quality
Image
Customer-perceived value
Customer
characteristics
Uncontrollable :
Innovation
Business
environment
Loyalty
18
19
20
Implement the
service strategy
through structure
Implement the
service strategy
through technology
Pakistan Institute of
21
CUSTOMER
NEEDS,
EXPECTATIONS &
PRIORITIES
22
23
24
25
26
27
28
29
30
31
32
Patient Satisfaction
Exciting
Expected
Neutral
Take-it-for-Granted
Dissatisfaction
Absent
Presence of the Characteristic
33
Pakistan Institute of
Fulfilled
34
35
Expected attributes
Attributes that patients expect may
include attention and concern shown by
nurses and accommodation for visitors.
Like take it for granted attributes,
patients expect these characteristics to
be present, but that expectation is not
assumed to the same degree that, for
example, appropriate equipment may be.
Pakistan Institute of
36
Pakistan Institute of
37
Exciting Attributes
Patients may not expect exciting
attributes but are delighted when they
are present.
Examples of exciting attributes could
include no paper work on admission,
extra time with physician or special
concern from a nurse. The more useful
yet unexpected a feature, the more
likely it is to create true delight.
Pakistan Institute of
38
39
CUSTOMER
RELATIONSHIPS
MANAGEMENT
41
Customer Relationships
Management
42
Customer Relationships
Management
43
Customer Relationships
Management
Internal Customers : Employees
Customer relationship
management can be best viewed
by showing the Service-Profit Chain
which establishes relationships
between profitability, customer
loyalty, employee satisfaction and
loyalty and productivity.
Pakistan Institute of
44
SERVICE-PROFIT CHAIN
The links in the chain are as follows :
Operating Strategy and Service Delivery System
Internal
Service
Quality
Employee
Revenue
Retention
Growth
Employee
External
Customer
Customer
Satisfaction
Service
Satis-
Loyalty
Value
faction
Employee
Profitability
Productivity
Workplace design
job design
employee selection
and development
employee rewards
and recognition
tools for serving
customers
Service
concept : results
for customers
Retention
repeat business
referral
Service designed
and delivered to
meet targeted
customers needs
Pakistan Institute of
45
Customer Relationships
Management
SERVICE-PROFIT CHAIN
46
Customer Relationships
Management
It is most important in this analysis to
consider the voice of the employees as
customers. In this regard, employee
surveys, interviews or roundtable meetings
are extremely important to gather
information on a number of factors such as
:
State of the company : A perception of the
company through the employees eyes.
State of quality efforts : Are the quality efforts
worthwhile?
Pakistan Institute of
47
Customer Relationships
Management
48
Customer Relationships
Management
49
Customer Relationships
Management
50
Customer Relationships
Management
51
Customer Relationships
Management
52
Customer Relationships
Management
53
Customer Relationships
Management
54
Customer Relationships
Management
Pakistan Institute of
55
Customer Relationships
Management
External Customers
The seeking of customer
satisfaction or delight are most
important to the management and
its employees.
The management of the company
can reinforce its commitment to
the customer via its actions.
Pakistan Institute of
56
Customer Relationships
Management
External Customers
The customer expects his or her
needs and expectations about the
product or service to be not only
satisfied, but even exceeded. If
there is a problem with a product
or service, a customer wants an
assurance that there will be help
available.
Pakistan Institute of
57
Customer Relationships
Management
External Customers
Some of the other things that a
customer expects the company to
handle include :
Guarantees e.g. Warranty which is
a public commitment to satisfy the
customer.
Pakistan Institute of
58
Customer Relationships
Management
External Customers
Complaints : But remember only 4% of
the dissatisfied customers let the
company know of the problem. The other
96% vote with their feet but do not
complain because they may not know how
to register a complaint, they don't think it
will do any good, people feel pushy or
awkward if they complain and they think
that the service provider might fight back.
Pakistan Institute of
59
Customer Relationships
Management
External Customers
Feedback : Feedback provides
information on customer
dissatisfaction, establishes its quality
priorities, compares performance
against competition, identifies
customer needs and determines
opportunities for improvement.
Corrective actions
Pakistan Institute of
60
Pakistan Institute of
61
62
Pakistan Institute of
63
64
Customer Relationships
Management
External Customers
The voice of the customer can be
listened to through a number of ways :
Customer surveys
Customer follow-up surveys (6 months, 1 year or 2 years).
Community surveys : a look at what the community is doing.
Pakistan Institute of
65
Customer Relationships
Management
External Customers
Personal customer contact.
Customer contact reports : Customer
fills out satisfaction report. The
feedback is given directly to the
employee.
Customer counseling : Residents of
specific functions form a council and
provide feedback to the governing
agency.
Pakistan Institute of
66
Customer Relationships
Management
External Customers
Focus groups : Small and large groups
Customer interviews
Electronic mail
Test marketing : small area is tested
for use
Quality guarantees : if not satisfied
we will redo the training
Pakistan Institute of
67
Customer Relationships
Management
External Customers
Inspectors : use of mystery
shoppers, auditors
Ombudsmen : advocates for the
customers
Suggestion boxes
Pakistan Institute of
68
Customer Relationships
Management
External Customers
Pakistan Institute of
69
Customer Relationships
Management
External Customers
70
CUSTOMER
IDENTIFICATION &
SEGMENTATION
71
Pakistan Institute of
72
BASIC PREMISE
Determine what consumers need
and want
Try to satisfy those needs and wants,
provided it is consistent with your
strategy and rate of return.
Move away from Product-Driven
approach towards a Market or
Customer-Driven approach.
Pakistan Institute of
73
Pakistan Institute of
74
75
76
.
. .. . . ..
.. ..
Pakistan Institute of
A A
A
1A 2B
1A
1B
3B
3A
77
No market
segmentation
Complete
market
segmentation
.
. .. . . ..
.. ..
Segmented by
a single
criterion
Pakistan Institute of
A A
A
Segmented by
multiple criteria
1A 2B
1A
1B
3B
3A
78
Price
.. . ..
...
.. .. . . ....
.
.
.
. . . ....
Quality
.
.
...........
. ..
Quality
Quality
Price
Pakistan Institute of
Price
79
Price
Clustered
preferences
.. . ..
...
.. .. . . ....
.
.
.
. . . ....
Price
Pakistan Institute of
Quality
.
.
...........
. ..
Diffused
preferences
Quality
Quality
Homogeneous
preferences
Price
80
81
Pakistan Institute of
82
COMMUNICATION
TECHNIQUES
83
Communication Techniques
Organization rely on various
methods to gather, assess and act
on information to serve customers
and drive marketing activities.
Pakistan Institute of
84
Communication Techniques
Key Benefits
Used to discovering customers needs and
requirements.
Management by fact (data-driven
corrective action/process.
Improved customer satisfaction, retention
and advocacy (positive word of mouth).
Pinpoint perceived performance and
market position in terms of competition.
Pakistan Institute of
85
Communication Techniques
Methods
Reactive feedback
Complaint monitoring, warranty
systems
Proactive feedback
Written surveys, telephoning, visiting
customers
Pakistan Institute of
86
Communication Techniques
Information Gathering
Strategic planning
issues
Customer records
Complaints
Surveys
Office
of the
customer
Benchmarking
Transaction
data
Pakistan Institute of
Corrective
action teams
Process
improvement
teams
87
Communication Techniques
Competition is driving companies to
significantly improve 3 vital
components of their communication
systems :
Customer databases
Customer satisfaction systems
(surveys)
Complaint handling systems
Pakistan Institute of
88
Communication Techniques
Surveys
Please be aware of the following
distinctions :
Population versus Sample
Validity
Reliability
Bias
Quantitative versus qualitative
research
Pakistan Institute of
89
Communication Techniques
Survey Tools / Methods
Written/Mail Surveys
Telephone Surveys
In-person Interviews (One-on-One)
Focus Groups
Customer Councils
Joint Planning Meetings
Panels
Comment Cards / Suggestion Boxes
Observation (Murmurs)
Mystery Shoppers
Others
Pakistan Institute of
90
Communication Techniques
Mistakes made in determining customer
satisfaction
Assuming We Know
Using Survey Questions that the
company wants the customer to answer
Survey Samples of Customer that are
neither random nor representative
Poor Question definition and invalid
statistical samples can lead the company
in the wrong direction.
Pakistan Institute of
91
Communication Techniques
Communications - A two-way process
Listen ---> Talk
External Customers :
Provide unsolicited information
Make information available on demand
Internal Customers
Newsletters
Meetings
Story boards
Pakistan Institute of
92
Communication Techniques
Barriers to effective communication
Failure to be Proactive
Customer does not know/cannot
articulate requirements
Failure to use the Customers
Language
Poor Research Design
Ineffective Use of Results
Pakistan Institute of
93
Communication Techniques
Best Practices
Define Customer Requirements
Regularly measure performance and
customer satisfaction
Systematically review survey and
other customer information
Create strategies, corrective action
and process improvement plans on
the basis of the information
Pakistan Institute of
94
MULTIPLE CUSTOMER
MANAGEMENT
& CONFLICT
RESOLUTION
95
Pakistan Institute of
96
97
Pakistan Institute of
98
99
100
101
CUSTOMER
PARTNERSHIPS
102
Customer Partnerships
Refers to the relationships that can
exist between customers and their
suppliers for the mutual benefit of
both.
Pakistan Institute of
103
Customer Partnerships
Strategic relationships are known by many
names:
An alliance : working together for a
common purpose.
Partnership : Implies a shared fate, mutual
benefits and equal relationship.
Strategic relationships : Co-operative
undertaking which could involve
technology, licenses, or supply/marketing
agreements.
Pakistan Institute of
104
Customer Partnerships
Why develop a customer-supplier
partnership:
A suppliers capabilities might exceed
internal capabilities .hence outsource.
Cost-cutting might force to look outside.
Combining resources may be beneficial to
attain technological breakthroughs, enter
new markets and/or develop new
products/services.
Pakistan Institute of
105
Customer Partnerships
Dos of alliances :
Take advantage of unique
strengths
Advantage of marketing channels
Advance of capabilities :
technology, skills, etc.
Pakistan Institute of
106
Customer Partnerships
Dont of alliances :
To correct a weakness
Share licensed technology
Rally around certain products
Pakistan Institute of
107
Customer Partnerships
Two different kinds of partnerships :
a) Internal customer partnership : This
is between departments.
b) External partnerships with suppliers
:
Mutual benefits
Trust building
Open and complete communication
Interdependence of parties
Pakistan Institute of
108
Customer Partnerships
Benefits
Cost/Time Savings
Better products and services
Supplier improvement
Pakistan Institute of
109
Customer Partnerships
Barriers
Customer dictates - No equality
Trust takes time
Pakistan Institute of
110
CUSTOMER
RETENTION
111
Customer Retention
Total customer satisfaction is a goal for the
customer driven organization. There are
two elements that make up Total Quality :
good service quality and good product
quality.
Once customer purchases a service or
product from the company, the work should
start to retain them for further purchases.
Most organizations spend the bulk of their
resources on attaining new customers and
a smaller amount on retaining customers.
Pakistan Institute of
112
Customer Retention
The campaign for retention of
customers can prove to be a major
business decision that effects the
company.
High customer satisfaction
numbers do not necessarily mean
the company has good customer
retention and good customer
loyalty. It is an unreliable indicator.
Pakistan Institute of
113
Customer Retention
Unaware of the importance of
customer retention, many customer
service programs are geared wrong.
It has been found that current
customers are worth as much as five
times more than new customers. The
cost of holding and retaining a current
customer is only a quarter of the
costs of acquiring a new customer
(Industrial Engineering, February
1995).
Pakistan Institute of
114
Customer Retention
The longer a customer is with you,
the more revenue/profit he or she will
give you. Another study has shown
that companies will boost profits by
about 100% by just retaining 5%
more
of
their
customers.
The life cycle of a customer is defined by 5 stages :
Acquisition: converting a prospect to a customer, high costs
Pakistan Institute of
115
Customer Retention
Retention : keeping the customer.
A quarter of the cost to acquire
Attribution : customer enthusiasm
fades as dissatisfaction creeps in
Defection : Losing the customer
Reacquisition : Regaining the
customer but at high cost
Pakistan Institute of
116
Customer Retention
The effort to retain customers
requires some effort on the
company's part. Over 60% of
dissatisfied customers are so sick
and tired of poor service that they
think it is futile to complain any
more.
Customers buy expectations, not
just products and services.
Pakistan Institute of
117
Customer Retention
Studies indicate that if a problem
does happen and it turns out to be
a bad experience, the unhappy
customer will tell 9 to 10 people
about it. A happy customer might
only tell five people about his good
experience (Sinha J. 1993).
Pakistan Institute of
118
Customer Retention
Some techniques for getting to know your
customer better :
Don't use your own instincts as research
data (you're not the customer).
See the world from the customer's side.
The higher you are in organization, the
more out of touch you become (and
arrogantly sure of what the customer
wants).
Pakistan Institute of
119
Customer Retention
Go to the source of information
(the customer), use multiple
techniques of research : focus
groups, mail/phone surveys,
comment cards, customer exist
research.
Get customers to really talk :
96% of unhappy customers won't
lodge a complaint.
Pakistan Institute of
120
Customer Retention
Do research to retain customers :
Determine how satisfied customers
were.
Conduct research on customer
expectations : friendly clerks, clean
rest rooms, pricing, etc.
Develop a customer profile : a
customer information file can contain
all pertinent data on the customer.
Pakistan Institute of
121
Customer Retention
Share the results of customer
research studies but do not go
overboard on the details and
measurement.
Use the research.
Coordinate research efforts.
Sometimes research does not help
the situation.
Pakistan Institute of
122
Customer Retention
Customer Loyalty
The value of a loyal customer is
not measured on the basis of one
encounter but rather on his or her
lifetime worth.
Loyal customers account for a high
proportion of sales and profit
growth. Customer retention
generates repeat sales.
Pakistan Institute of
123
Customer Retention
Customer Loyalty
It is cheaper to retain customers
e.g in life insurance, new policy
holders become profitable in three
years and in the credit card
business, the break-even point for
a new customer is six years, due
to high marketing and bad debt
cost.
Pakistan Institute of
124
Customer Retention
Customer Loyalty
Customer loyalty is something
that must be demonstrated
through an act of execution, trust
or delightful service. They could
become partners with you through
their journey as a customer.
Pakistan Institute of
125
Customer Retention
A Satisfied Customer Is Loyal
Loyalty Retention
100%
apostle
Zone of affection
80
Zone of indifference
60
40
Zone of defection
20
terrorist
1
2
extremely somewhat
dissatisfied dissatisfied
3
slightly
dissatisfied
4
satisfied
Pakistan Institute of
Satisfaction Measure
126
5
very
satisfied
CUSTOMERS
127