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Customer Satisfaction

Customer Satisfaction

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03/18/2014

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Published in The Beacon--NIQR Bangalore Newsletter, July-Sep 2005
Customer Satisfaction Management in Service Industry
M. Madhukar Reddy, Quality, Progeon Ltd
Introduction

In this 21st century the digital revolution has transformed the economy in to a new economy which empowered the customer with new set of capabilities such as; 1.Access to greater amount of information, 2. Wider variety of available good and services, 3. Greater ease of interacting with the service provider.

This new capability in the new economy led the customer to market the marketing and plays a very vital role in the growth of the market. It is essential in the service industry in particular, place greater emphasis on the enablers leading to customer satisfaction and customer retention. It is in this context is very important to understand the customer requirements to provide value-(QSP - Quality, Service and Price) and track and manage the customer satisfaction for retention and creation of new customers.

In Service industry it is not enough if the product meets the functional requirements of the customer, it should also meet certain other customer expectations like the behaviour/attitude of the person who provides service. The customer satisfaction is the combination of both technical features & human behavioural aspects. The quality management only addresses the systems and processes; service addresses the customer service independently. In today\u2019s new economy, it is essential to address the enablers for customer satisfaction for business growth with utmost importance as they are interdependent in nature.

Customer satisfaction
Customer satisfaction can be represented as follows.
Customer satisfaction=Performance Features + Behavioural Features + Price.

Performance features address the issues on Conformance to the standards and Variability and
the behavioural aspects of service provider deals with the following components of service which
is a major enabler for the growth of the business as indicated in the research publications.

1. Responsiveness
-
Readiness of employee to provide service.
2. Courtesy
-
Respect, Friendliness of contact personnel.
3. Timeliness
-
Delivery on Time, First Contact Resolution.
4. Complete Resolution
-
Listening to Customers.
5. Communication (Empathy) -
Speaking to the Customers in their language
6. Credibility
-
Taking Ownership in Resolving the Complaints.
If customer experience matches customer expectations, leads to customer satisfaction and if
customer experience doesn\u2019t match Customer Expectation, leads to Customer
dissatisfaction.
On similar lines if it exceeds expectation leads to Customer Delight.
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Why a business losses customers?

According to the US news and world report market research on lost customers by major
companies shows that 14% for better product, 9% for cheaper product, 68% left because of poor
service (service provider\u2019s attitude) which can be easily avoided by designing effective customer
service process which enables the company to respond . The study clearly demonstrates the
significance of soft service quality in relation to product quality.

Percentage
Dissatisf ied w ith the
Personnel\u2019s attitude
D is a p
pointed w ith the
Q u a lit
y of the Product
Find the price too high
Adopt new habitsMove
Die
Dissatisfied with the
Personnel\u2019s attitude
Disappointed with the
Quality of the Product
Find the price too high
Adopt new habits
Move
Die

It is in this context we need to stress on the service quality part as 68% of the customers desert
the service provider. The behavioural/attitude component of service is major determining factor
on the growth of the company which complements the performance for complete customer
satisfaction.

Performance/Perception:
The performance/perception grid helps us evaluate the organization where it stands with respect
to the customer expectations.
Low
Perception
High
Needs to Improve
Customer Service

Customer
Advantage \u2013
Customer
Retention
Business growth

Customer
Deception-
Shrinkage

Additions of
Product Features
\u2013 Short Term
Sales

1. Product with low performance and low perception (L/L): The product doesn\u2019t provide basic
features and the customer service is poor- leads to the customer drain. This calls for
improvement on two dimensions of performance and perception or exit from the business.

Reason
Percentage
Dissatisfied with the
Personnel\u2019s attitude
68%
Disappointed with the
Quality of the Product
14%
Find the price too high
9%
Adopt new habits
5%
Move
3%
Die
1%
High
Performance
Low
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2. Product with high performance and low perception (H/L): The product provides basic features and meets the expectations of the customer but with poor customer service. This type of situation calls for effective marketing with focus on target groups. This suggests the focus on improvement of customer service.

3. Product with high perception and low performance (L/H): The product provides basic features with superior customer service .The product needs to be improved with addition of new features which develops edge over the competitor.

4. Product with high perception and high performance (H/H): The product meets the stated and
un-stated features with superior customer service. The organization need to be constantly
innovative and exploit the strengths of the product and service to improve the customer retention
rate and creation of new customers.

The organization needs to focus on customer satisfaction management and strategically plan to
be in the fourth quarter to ensure its sustained and continued growth.
Customer satisfaction and retention:

Customer satisfaction and retention results from meeting and exceeding the customer
expectations. The focus should shift from the quality of product to the optimization of three
enablers QSP (quality, service and quality) to meet and exceed expectations.

Customer satisfaction/retention demands the continuous improvement in organization capability
in terms of QSP (quality, service and productivity)
This process should be customer centric and includes following capabilities

1. Capturing the voice of customer and understanding complete requirements includes
stated needs and also other value adding requirements which would delight the
customers..

2. Benchmarking and re-designing of processes to meet the customer expectations.
Encourage innovation to add facilitating features.

3. Training and development: Good customer relationship management largely depends on
communication. Training on customer service skills helps the service providers to
address the emotional needs. It also ensures the consistent approach production and
effective resolution of problems that enriches the customer experience \u2013 leading to
customer loyalty. The focus on people skills improves the organizational capability to
address the challenges.

4. Develop customer retention process: The organization needs to develop a framework
which measures and tracks the customer satisfaction and to address the customer issues
from time to time and improve the degree of satisfaction which leads to customer
retention and new customer creation.

5. Continuous improvement: Various quality improvement tools like Six sigma, Business process re-engineering, Business process management system, value chain analysis and various lean tools would help the organization to address the challenges related to effectiveness and efficiency.

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