TOTAL QUALITY MANAGEMENT

MEASURING CUSTOMER SATISFACTION

MIKE ASHER LOOKS A T W A Y S T O CONTINUOUSLY MONITOR EXTERNAL A N D INTERNAL CUSTOMER SATISFACTION

To maintain the competitive edge organisations must move quickly to identify and then meet customer satisfaction. This article examines methods of identifying customer satisfaction, measuring it and using the results to improve the quality of products and services.

uality is continually satisfying customer requirements. What matters in the end to customers is not only the product or service w e have supplied, but whether their requirements have been satisfied. W e are making, selling and providing customer satisfaction. A customer's requirements can be few or many, tangible or intangible. Providing complete customer satisfaction means meeting all of them. THE E N D P R O D U C T IS CUSTOMER SATISFACTION

Here are some ways in which customers measure their satisfaction with a product or service: Did we keep all our promises? Did they get good service at every point of contact in our company? Did we do everything w e could t o help? Was the productor service delivered on time, at the right time? Did w e start for their problem rather than our product or service? Are w e aware of all their needs, current and potential? And do w e ask about them? Do w e notify them of any changes to the product or service? H o w many people in our company understand the needs of our customers? Can they depend on the quality of our suppliers? Are w e interested in how they use the product?

Living for customers, o r putting the customer first, is about taking positive action to understand and continually meet customer requirements. The whole company must be involved if complete customer satisfaction is t o be provided. Every department and employee must know w h o their customers are and what they require. And the more knowledge w e have of customers' needs, the better w e will be able to respond. Standards are rising all the time. Customers are becoming more demanding. T o compete, we have to keep up. This means having a continuous flow of information about customer requirements - information available t o everyone in the company. Yet, employees can be very distant from the end customer. Information reaching them may be second-hand, incomplete and in the language of company, not customer, problems. It is hard for these people to respond directly t o customer needs. It is easier for them t o accept that the limited knowledge they have is all they need, and that a limited response is all management believes necessary. N o t only those whose job it is to keep in touch with customers need first-hand information. Every chance should be taken to increase the number of people regularly making direct customer contact. For example, the Hewlett Packard policy of sending out research and manufacturing engineers pays dividends. Only employees responsible for a particular aspect of our service can get that part 'right first time'. 93

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Understanding customer requirements involves knowing how the product or service performs in the hands of the customer. This information can best be obtained through direct observation of customers' own experiences of the product or service in every stage of its life. For example, how is it packed or installed? How is it used? What do maintenance and servicing people do to keep it working? Meeting and then exceeding customer requirements gives the competitive edge in all aspects of business. In businesses that provide very similar products or services this provides an essential differentiation in the marketplace. An example of this is the work done in the financial services sector[1] by the National Westminster Bank. It recognised that the services offered by the major banks, such as deposit and current accounts, loans, overdrafts, etc., all appeared very similar to their potential customers. They decided that the attribute they would offer in addition was quality of service. The cycle begins with customer requirements. Market research should find exactly what the customer wants, not whether we can sell what we have already designed. Too often company market research is directed at information on image or sales volume rather than finding out if customers are being satisfied, and what it is customers want. IDENTIFY YOUR CUSTOMERS A good way to begin a quality improvement programme is to talk to your customers about their perceptions of you and their needs. This is a good team activity designed to get commitment to action and focus on the opportunities available. The team's first task is to identify your customers. You will need to segment your customers in various ways. The usual choices are location, business type, order size, overall volume of business and their use of your competitiors. British Airways did exactly this prior to its 'Customer First' programme by segmenting and identifying its passengers' profiles. When some businesses do this they have to split down further into 94

customers and users. An example of this involved with all aspects of the would be food processing where the business. customer is the store but the user is the Focus groups, where a team member shopper. conducts a structured group interview with about eight people at the The next thing to identify are your customer's site. This method gives a contacts within the customer's organisagood overview and allows people to tion. PA uses a domainal map build on others' ideas. (Fig. 1) to identify contacts and the Customer days, in which many products or services that they get. These customers are invited to a seminar or are always more than you think. This will presentation and attend group discushelp to identify the topics for discussion sions on 'quality'. and it should cover all aspects of the relationship - not just those directly Telephone surveys, where the interviewer conducts a structured interrelated to the product or service you view with the customers. supply. Paper surveys, in which selected A useful technique at this stage is to customers are sent a questionnaire in analyse your complaints data and use this the post as a focus for discussion. Talk specifically Mystery caller, where a team memwith customers about 'our last problem' ber puts himself in the position of the but beware - do not seek to justify it, customer and tries to obtain your your customers are not interested in product or service. Have you ever your problems. telephoned your own company to see the response you get? PLAN THE CUSTOMER STUDY Many ways are open to people who want to find out about customer satisfaction. The focus for this should be identifying what is important to your customer and how good your customer thinks you are at providing it. Get your customers to rate your performance on a scale of Personal interviews, where team 0-10, in both areas. members make appointments with their customers and ask them Using a simple graph,[2] plot average questions. The advantage of this figures and use the output to identify method is that once on the customer's areas for improvement (Fig. 2), focusing premises it is usually possible to on areas of high importance and low interview a selection of people satisfaction.

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BENCHMARKING PERFORMANCE The standard for a quality company should be that every part of it achieves and maintains superiority in terms of service, product and all things of importance to the customer. It is no longer enough to be a good overall performer. You must identify the critical competences that differentiate you from the competition and be the best at these. These requirements will change over time and are very strongly linked to the competition. The definition of benchmaking is 'a continuous process of measuring a company's products or services against direct competitors or those who are accepted as leaders with specific functional expertise'. There is no need to benchmark against someone operating in the same industry. For example, a supermarket evaluating food distribution might look at a carrier, such as Federal Express. Or if the subject under examination was invoicing, a wholesale clothing supplier might look at a manufacturer of domestic electrical products. Xerox was a pioneer in this, comparing the different parts of its business with leaders in specific functions. The purpose is to provide the necessary information for a company to set performance goals to reach leadership, and to plan to achieve it. As part of measuring customer satisfaction you can talk to your customers about who is best in the various specialisms and about what makes them best. Customer days and Focus groups are good ways to do this. Other sources of information may include: Financial reports Market research

Why are they better? What can you learn from them? How can you apply it to yourselves? Using external benchmarks in this way guards against introspection and complacency, 'we're OK - why change?' FUTURE REQUIREMENTS AND CUSTOMER SATISFACTION Tomorrow's successful companies realise that as well as knowing, meeting and exceeding today's requirements, they will have to anticipate the needs of the future. The continuous spiral (Fig. 3) of increasing customer requirements is a cornerstone of total quality and continuous improvement. PA's recent study tour of corporate USA and Japan[3] highlighted the ability of successful companies to match rising customer expectations. Companies that plan their future with their customers make it more likely that they will be the suppliers of the service. There are many ways to achieve this. Running customer days can be a very useful way to begin. Forecasting techniques such as Delphi,[4] which uses a reiterative method, or other market research methods will all give clues to the future. Remember not to be restrictive in your questions. Offbeat answers may provide the spark to ignite the niche market of the future.

INTERNAL CUSTOMERS ARE REAL Complete customer satisfaction is only possible when there is full information about customer requirements in the hands of anyone and everyone who has an influence on how they are met. This is true for internal customers as well as external. Every relationship within the company is a customer-supplier relationship to which the policy 'Customer First' should be applied.

Media
Staff employees Trade associations Field personnel Outside agencies What you are trying to find out is: Are others providing better satisfaction, and if so, by how much? FEBRUARY 1989

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The customer/supplier chain (Fig. 4) goes from external supplier to external customer, yet the role of individuals as links in the chain to the end customers is often not clearly recognised. An internal customer may not be treated as a 'real' customer, but as just another department which can adapt if we have a problem. Internal customers are real. Meeting their requirements is an all important contribution to satisfying our company's customers. Establishing requirements, agreements and measures of customer satisfaction for internal customers can become a driving force for quality improvement. Internally, many problems go unsolved because no one 'knows' they are problems. Requirements are often not explicitly stated and agreed and measures are not set. People seldom take the time to put these in place. Getting each link in the chain (Fig. 5) right is central to satisfying the internal and external customer, Asking simple questions like: Who are your internal customers? Do you know their requirements?

How are changes in requirements communicated? Are there written agreements? How do you measure success? Can get people thinking about internal customer satisfaction and quality improvement. One very successful way to do this is to get an internal customer/supplier group together and, using two rooms, get each group to brainstorm the problems they have with the other group. Then bring the two groups together to discuss the output. This gets things out in the open very quickly and often allows many small problems to be resolved. It also provides a forum for agreeing requirements and measures. Another technique useful in measuring internal customer satisfaction is to clearly focus the thinking by asking four basic questions:

Only where all four responses overlap is customer satisfaction being delivered. The non-overlapping areas are opportunities for improvement. After all - if a department is not doing what its customers want, what is it doing? By getting it 'right first time' internally and meeting internal customer needs, the whole customer/supplier chain focuses on meeting the needs of the external customer and providing customer satisfaction. CONCLUSION If things are right, customers will be the first to notice. More will come back again and again to use the products and services provided. The only way to know this with certainty is to go back and ask them - until everything is right. Companies that do this and use it as a spur to improvement know that quality pays. REFERENCES
1. P. Goodstadt, 'Banking on Quality', QA News, 14 (11), pp. 462-465. 2. K. Potock and D. Saunders, Quality Service Using Customer Research 1988, ASQC. 3. 'A Way of Life in Corporate USA and Japan', Report of the PA Consulting Group 1988 Tour. 4. R. Taylor, 'Using the Delphi Method', Business, Oct-Dec 1984.

What do we think we do?

What does our boss think we do? What do our customers actually want? What do we really do?

BIBLIOGRAPHY
PA Consulting Group, How to Take Part in the Quality Revolution A Management Guide. Dr Mike Asher has had continuous experience in quality and technical management since 1977. After a variety ofsenior appointments, ending as operations executive of Chloride Europe, he joined the PA Consulting Group and is now a senior consultant in the Total Quality Management Division. He is a Fellow oftheInstituteofQuality Assurance and a parttime lecturer for the IQA on quality costs and statistical process control. Dr Asher may be contacted at PA Consulting Group, Fountain Court, Fountain Street, Manchester M2 2FE, UK (Tel: (061) 236 4531).

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