In this presentation, we will discuss the importance of developing and maintaining a healthy customer relationship. Understanding customer psychology, knowing what customers want and customer retention are valued as an integral part of a successful business. To know more about Welingkar School’s Distance Learning Program and courses offered, visit: http://www.welingkaronline.org/distance-learning/online-mba.html

1. Chapter 2
The importance of
Customer Satisfaction

2. Objectives
• Why is Customer service essential
• Understanding customer service in the
market
• Measuring customer satisfaction

3. Introduction
• The key to customer retention in India is
good customer service
• It is vital to ensure that the customer loyalty
programs are an integral part of the
organization

4. Statistics for customer
retention
• Repeat customers spend 33% more than new
customers.
• Referrals among repeat customers are 107%
greater than new customers
• It costs 6% more to sell something to a
prospect than to sell that same thing to a
customer

5. Why customer service
matters
• India loses Rs. 11,640 Crores (Rs. 116.4
Billion) in revenue because of poor customer
service
• Businesses in India, Australia and New
Zealand suffer significant losses because of
poor customer service over the web

6. Why customer service
matters
• Out of the 1,500 people surveyed most of the
people could not reach the call center
• In India, 56% people discontinued because of
poor customer relationship

7. Why customer service
matters
• The higher the income levels the service
expectations are higher
• Customer service is as much part of building
the brand as is advertising

8. Understanding customer
satisfaction in the market
• At the heart of the LVMH’s business model
is a well thought of process for creating and
growing star brands
• A star brand has to be built for eternity

9. Understanding customer
satisfaction in the market
• Timelessness takes years even decades to
develop. Such a brand must have come to
stand for something in the eyes of the world
• Profitability depends on the price and the
cost incurred

10. Understanding customer
satisfaction in the market
• LVMH realizes that in the case of the luxury
brands, the innovation supporting the
creative process and the advertising are very
expensive
• The manufacturing process is carefully
planned and executed with the help of
modern technology

11. Understanding customer
satisfaction in the market
• The Boulogne multicolor which sells for
$1500, illustrates how LVMH coordinates its
operations
• The prototype went directly from the
marketing department to the top executives

12. Understanding customer
satisfaction in the market
• When LVMH opened in Delhi, It found
strong demand for premium and aspirational
products
• Super rich in the world have similar
lifestyles – LVMH’s experience

13. Understanding customer
satisfaction in the market
• LVMH planned it’s entry carefully in the
Indian market
• The company closely monitored Indians
who were buying abroad

14. Customer service initiatives
of MHFC
• MHFC combines the advantage of a bank
and MFI in one equity
• It has tied up with several low cost
developers for projects in Maharashtra

15. Customer service initiatives
of MHFC
• Critics of the MFI model highlight it’s
inherent fallacies
• People in dire straits are well-informed and
rational economic actors

16. Measuring Customer
Satisfaction
• Measurement of customer satisfaction is a
new significant addition to the new
ISO9000: 2000 Standard

17. Measuring Customer
Satisfaction
• There is a strong link between customer
satisfaction and retention
• There is a lot of debate and confusion about
what exactly is required and how to go about
it

18. What do Customers want
• It is important to develop a clear
understanding of what exactly a customer
wants
• Customer expectations are of 2 types –
Expressed and Implied

19. What do Customers want
• Expresses customer expectations – written
down and agreed upon by both the parties
• Implied customer expectations – not written
or spoken but expected

20. What do Customers want
• There are many reasons why the customer
expectations are likely to change over time
• The customer is always right. The suppliers
job is to provide the customer what he
wants, when he wants it

21. What constitutes Satisfaction
• Major attributes of customer satisfaction
can be summarized as:
• Product quality
• Product packaging
• Price

22. What constitutes Satisfaction
• What are the tools?
• Customer expectations can be identified
using various methods such as:
• Periodic review contracts
• Market research
• Personal visits

23. What constitutes Satisfaction
• What are the tools?
• Depending upon the customer base and the
available resources, we can choose the most
effective measures in customer perceptions
measurement

24. Customer Satisfaction
Surveys
• Formal surveys have emerged as the best
method to periodically assess the customer
satisfaction
• The surveys are not marketing tools but an
information gaining tool

25. Customer Satisfaction
Surveys
• There is no point in asking irrelevant
questions on a customer satisfaction
questionnaire
• Priorities for improvement should be one of
the objectives of the satisfaction
measurement

26. Customer Satisfaction
Surveys
• The survey forms should be easy to fill out
with the minimum amount of time and
efforts
• The data should be sufficiently reliable for
management decision-making

27. Customer Satisfaction
Surveys
• Space should always be provided for the
customer’s own opinion
• The respondents must be provided a way to
express the importance they attach to
various survey parameters

28. Customer Satisfaction
Surveys
• Typical questions for product performance
can be grouped together like:
• Quality of the product
• Consistency of the product
• Price of the product

29. Customer Satisfaction
Surveys
• Typical questions for competitor
performance can be grouped together like:
• Adherence to the delivery schedule
• Quality of the product
• Cost of the product

30. Customer Satisfaction
Surveys
• It is often found that there are dismal
responses from the customer
• Electronic mailing of the surveys are a good
option as the customers can fill and send the
questionnaire quickly

31. Analysis
• The customer’s requirements must be
translated and quantifies into measureable
targets
• This provides an easy way to monitor
improvements and to in turn improve the
customer satisfaction

32. Performance Matrix
• The average of the weightings and the scores
given by the customer on each of the
parameters are plotted on a scatter graph
• The customer satisfaction index represents
the overall satisfaction level of the customer

33. Performance Matrix
• The bias due to individual perception needs
to be accounted for, since the surveys are
taken from one organization
• We need to calculate average of all the
weightings

34. Performance Matrix:
Parameters
• P Weighting
• A Score
• B Weighting (avg. of 1)
• C Weighting (avg. of 1) * Score
• D = B*C

35. Performance Matrix
• Customer satisfaction can be expresses as a
single number that tells the customer where
he stands today
• It is far less costly to keep existing
customers than to win new ones

36. Performance Matrix
• A supplier should keep improving so as to
achieve a greater profitability
• A simple tool is to take the customer
satisfaction surveys and analyze the
customer’s feedback

37. Responsibilities of the
Organization
• The Organization is responsible for
providing superior support in all aspects of
purchasing products:
• All pre-order entry qualifications
• Responsible for providing direction
• Coaching and development of regional order
management teams

38. Key responsibilities
• Ensure that all orders are entered into the
order management systems in accordance to
the set processes
• Ensure that issues are escalated to the
appropriate authorities and seek closure in a
timely order
• Builds and maintains customer relationships
specific to regions

39. Key responsibilities
• Execute all month and quarter end activities
flawless
• Documents, policies and procedures based on
expertise in specific job areas
• Provide other services or perform activities
specific to the assigned region(s)

40. Key responsibilities
• Schedule and perform quarterly business
reviews onsite with channel partners to
review and to drive operations improvement
• Draw on to others support resources to drive
performance improvement for the assigned
regions(s)

41. Key responsibilities
• Perform all people management duties
including recruiting, staff, development,
team-building and performance reviews
• Participate in all other projects and
initiatives as determined by the organization

42. HCL – Case Study
• HCL announced the launch of ‘HCL
TOUCH’, its 24*7 round the clock, service
and support for its leaptop customers
• ‘HCL Touch’ sets a new benchmark for
laptop service in the country

43. HCL – Case Study
• HCL offers round the clock service to
leaptop customers across India
• The support is offered in 11 different regional
languages

44. HCL – Case Study
• The HCL service is backed up by several
other initiatives such as the SMS request
service
• The landmark laptop service will be
delivered through India’s largest IT Service
and support network

45. HCL – Case Study
• “Customer has always been at the core of the
HCL’s business with the customer care
services as a top priority” – Ajai Choudhary
– Chairman and CEO, HCL.

46. Eureka Forbes – Case Study
• In a bid to enhance its customer services –
Eureka Forbes will be launching the
‘Automatic dust tracker’ initiative
• The ‘Automatic dust tracker’ measures the
exact amount of dust in the nook and corners
of our houses

47. Eureka Forbes – Case Study
• The main objective behind this move is to
build an everlasting relationship with the
customers
• This initiative would make the customers
friends for life by meeting all their health
requirements

48. Eureka Forbes – Case Study
• Further Mr. Palekar informs that these
results are based on research conducted at
the company’s laboratories
• On a daily basis the institute monitors the
air pollution data

49. Eureka Forbes – Case Study
• Eurosmile is the 24*7 virtual call center for
customer response
• The total sales force of the company is over
4000 people – Mr. Palekar

50. Eureka Forbes – Case Study
• Eurosmile is the 24*7 virtual call center for
customer response
• The total sales force of the company is over
4000 people – Mr. Palekar

51. Titan – Case Study
• Titan – a name which changed forever the
way watches made in this country were seen
by Indians and the world
• Launched in 1987, Titan is credited to
transforming the Indian watch industry

52. Titan – Case Study
• Understanding the Indian consumer’s
psyche has been vital to Titan reaching it’s
current position of strength
• The company today has a model for every
price segment and every market

53. Titan – Case Study
• Research reveals some interesting facts and
figures:
• The Indian market is estimated at 25 million
watches a year
• Titan is the runaway market leader
• More men than women own watches in
India

54. Titan – Case Study
• It is the rural segment with this diverse
market that Titan is now looking to tap
• The company plans to change that with
enhanced marketing and a different
marketing strategy

55. Titan – Case Study
• The Titan retail operations are a mix of
company-owned and franchisee outlets
• The company brings the brand to the
customer in an appropriate setting through
its showrooms

56. Titan – Case Study
• The franchisee is a critical cog in the Titan
retail mix
• “The market is opening up, and the
franchisee, after all, looking for what is more
profitable” – Ajay Chawla

57. Titan – Case Study
• The franchisee is a critical cog in the Titan
retail mix
• “The market is opening up, and the
franchisee, after all, looking for what is more
profitable” – Ajay Chawla

58. Titan – Case Study
• Besides its franchisee and its own
showrooms, Titan sells it products through
other outlets as well
• The service centers have been deliberately
kept apart from the showrooms

59. Titan – Case Study
• Titan’s blueprint for the future includes
watches for the international heavy weights
such as YSL, Christian Dior and Gucci
• Titan is also planning to expand into
categories like sunglasses and leather
products

60. Indian Oil Corporation –
Case Study
• Indian Oil Corporation launched the IVSR
in 33 Indane area offices for better services
• The Indian oil – Citibank co-branded credit
cards have reached a 1.48 Lakh membership
in 2002

61. Indian Oil Corporation –
Case Study
• IOCL launched “Power plus fleet card” for
transport fleet operators in association with
Sundaram finance
• The customer service initiative of IOCL is
considered as one of the best from the public
sector undertaking

62. End of Chapter 2
The importance of
Customer Satisfaction