This presentation covers customer satisfaction with examples taken from famos motor brands i.e. Mercedese & Ford Motor Company. After Reading this, one should be uble to understand and deliver the best knowledge about customer satisfaction.
Rehan EhsanFinance Professional. Researcher em The University Of Lahore
What is total quality management ?What is total quality management ?
Total quality management is the art ofTotal quality management is the art of
managing the whole to achieve excellence.managing the whole to achieve excellence.
TQM is defined as both a philosophyTQM is defined as both a philosophy
and a set of guiding principles thatand a set of guiding principles that
represent the foundation of arepresent the foundation of a
continuously improving organization.continuously improving organization.
It is the application of quantitiesIt is the application of quantities
methods and human resources tomethods and human resources to
improve all the process within theimprove all the process within the
organization and exceed customerorganization and exceed customer
needs .needs .
Customer satisfaction GURU:Customer satisfaction GURU:
ARMAND V. FEIGENBAUM:ARMAND V. FEIGENBAUM:
he argues that total quality control ishe argues that total quality control is
necessary to achieve productivity, marketnecessary to achieve productivity, market
penetration, and competitive advantage.penetration, and competitive advantage.
Quality begins by identifying theQuality begins by identifying the
customer’s requirements and ends with acustomer’s requirements and ends with a
product or service in the hands of aproduct or service in the hands of a
satisfied customer.satisfied customer.
in addition to customer satisfaction ,somein addition to customer satisfaction ,some
of Feigenbaum’s quality principlesof Feigenbaum’s quality principles
Customer SatisfactionCustomer Satisfaction
Customer satisfaction seems simpleCustomer satisfaction seems simple
enough, and yet it is far from simple.enough, and yet it is far from simple.
Customer satisfaction is not an objectiveCustomer satisfaction is not an objective
but more of a feeling or attitude.but more of a feeling or attitude.
Because customer satisfaction isBecause customer satisfaction is
subjective, it is hard to measure.subjective, it is hard to measure.
Although there are certain statisticalAlthough there are certain statistical
patterns can be developed to representpatterns can be developed to represent
customer satisfaction, it is best tocustomer satisfaction, it is best to
remember that people’s opinions andremember that people’s opinions and
attitudes are subjective by nature.attitudes are subjective by nature.
Customer loyalty can be sustained onlyCustomer loyalty can be sustained only
by maintaining a favourable comparisonby maintaining a favourable comparison
when compared with competitors.when compared with competitors.
Who is the customer ?Who is the customer ?
The customer is the end user or theThe customer is the end user or the
person who consumes the product orperson who consumes the product or
gets benefit from the services.gets benefit from the services.
Types of customers:Types of customers:
There are two distinct types ofThere are two distinct types of
External CustomersExternal Customers
Internal CustomersInternal Customers
External Customers:External Customers:
An external customer can be definedAn external customer can be defined
in many ways, such asin many ways, such as
The one who uses the product or servicesThe one who uses the product or services
The one who purchases the product oreThe one who purchases the product ore
The one who influences the sale of theThe one who influences the sale of the
product or service.product or service.
An external customers exists outsideAn external customers exists outside
the organization and generally fallsthe organization and generally falls
into three categories:into three categories:
Current customersCurrent customers
Prospective customersProspective customers
Lost customersLost customers
Internal customers:Internal customers:
An internal customer is just as important.An internal customer is just as important.
Every function, whether it be engineering,Every function, whether it be engineering,
order processing, or production, has anorder processing, or production, has an
internal customer.internal customer.
Each receives a products or services and in exchangeEach receives a products or services and in exchange
provide a product or service. Each person in aprovide a product or service. Each person in a
process considered a preceding operations.process considered a preceding operations.
Each workers goal is to make sure that the qualityEach workers goal is to make sure that the quality
meets the expectation of the next person, and shouldmeets the expectation of the next person, and should
satisfy thesatisfy the external customer.external customer.
Customer Perception of quality:Customer Perception of quality:
One of the basic concept of TQMOne of the basic concept of TQM
philosophy is continuous processphilosophy is continuous process
This concept implies that there is noThis concept implies that there is no
acceptable Quality level because theacceptable Quality level because the
customer’s needs, values, andcustomer’s needs, values, and
expectations are constantly changingexpectations are constantly changing
and becoming more demanding.and becoming more demanding.
(ASQ) survey on end USERS:(ASQ) survey on end USERS:
An American Society for Quality (ASQ)An American Society for Quality (ASQ)
surveys on end users perceptions ofsurveys on end users perceptions of
important factors that influencedimportant factors that influenced
purchases showed the following ranking:purchases showed the following ranking:
The factors of performance, features,The factors of performance, features,
service, and warranty are part of theservice, and warranty are part of the
product or service quality; thereforeproduct or service quality; therefore
it is evident that product quality andit is evident that product quality and
service are more important thanservice are more important than
price. Although the information isprice. Although the information is
based on the retail customer, itbased on the retail customer, it
appears, to some extent, to be trueappears, to some extent, to be true
for the commercial customer also.for the commercial customer also.
a performance can be well defineda performance can be well defined
by a phraseby a phrase
‘’‘’ FITNESS FOR USE ‘’FITNESS FOR USE ‘’
this phrase indicates that thethis phrase indicates that the
prodssuct and services is ready forprodssuct and services is ready for
customers use at the time of sale.customers use at the time of sale.
Identifiable features or attributes ofIdentifiable features or attributes of
a product or service a product ora product or service a product or
service are:service are:
Time orientedTime oriented
• Features are secondaryFeatures are secondary
characteristics of the P&S.characteristics of the P&S.
This is the customer-value addedThis is the customer-value added
However it is intangible but theHowever it is intangible but the
companies that focus more on theircompanies that focus more on their
services always satisfy theirservices always satisfy their
customers and don't give themcustomers and don't give them
chance to complaint them for theirchance to complaint them for their
The product warranty represents anThe product warranty represents an
organization’s public promise of aorganization’s public promise of a
quality product backed up by aquality product backed up by a
guarantee of a customer satisfaction.guarantee of a customer satisfaction.
The warranty encourages customersThe warranty encourages customers
to buy a service by reducing the riskto buy a service by reducing the risk
of the purchase decision, and itof the purchase decision, and it
generates more sales from existinggenerates more sales from existing
customers by enhancing loyalty.customers by enhancing loyalty.
Today's customer is willing to pay aToday's customer is willing to pay a
higher price to obtain the valuablehigher price to obtain the valuable
In this highly competitive world theIn this highly competitive world the
definition of the customer isdefinition of the customer is
continuously changing that they cancontinuously changing that they can
even pay high rice for high qualityeven pay high rice for high quality
Total customer satisfaction is basedTotal customer satisfaction is based
on the entire experience with theon the entire experience with the
organization, not just the product.organization, not just the product.
Customer feedback must beCustomer feedback must be
continually solicited and monitored.continually solicited and monitored.
It is not a one time effort,it is anIt is not a one time effort,it is an
ongoing and active probing of theongoing and active probing of the
customers mind.customers mind.
It Enables:It Enables:
FEEDBACK enable organizations to:FEEDBACK enable organizations to:
Discover customers dissatisfactionDiscover customers dissatisfaction
Discover relative priorities of qualityDiscover relative priorities of quality
Compare performance with theCompare performance with the
Identify customers needIdentify customers need
Determine opportunities forDetermine opportunities for
Ways of collecting Feedback:Ways of collecting Feedback:
There are the following ways through whichThere are the following ways through which
feedback can be collected:feedback can be collected:
a)a) Comment CardComment Card
b)b) Customer QuestionnaireCustomer Questionnaire
c)c) Focus GroupsFocus Groups
d)d) Toll-Free Telephone NumbersToll-Free Telephone Numbers
e)e) Customer VisitsCustomer Visits
f)f) Report CardReport Card
g)g) The InternetThe Internet
h)h) Employee FeedbackEmployee Feedback
i)i) Mass CommunicationMass Communication
Comment cardComment card
A low cost method of obtaining feedA low cost method of obtaining feed
back from customers involves aback from customers involves a
comment card which can be attachedcomment card which can be attached
to the warranty car and included witto the warranty car and included wit
the product at the time of purchase.the product at the time of purchase.
Customer Questionnaire:Customer Questionnaire:
A Customer Questionnaire is aA Customer Questionnaire is a
popular tool for obtaining opinionspopular tool for obtaining opinions
and perceptions about anand perceptions about an
organization and its product andorganization and its product and
Survey may administered by mail orSurvey may administered by mail or
This survey may ask the customer toThis survey may ask the customer to
GRADE the organization.GRADE the organization.
Focus Groups:Focus Groups:
Surveying a focus group is aSurveying a focus group is a
research method used to find outresearch method used to find out
what customers are really thinking.what customers are really thinking.
This a very popular method ofThis a very popular method of
feedback and can be too expensive.feedback and can be too expensive.
Toll-Free telephone Numbers:Toll-Free telephone Numbers:
Toll free telephone numbers are anToll free telephone numbers are an
effective technique for receivingeffective technique for receiving
complaints feedback.complaints feedback.
Organization can respond moreOrganization can respond more
faster and cheaply to the complaint.faster and cheaply to the complaint.
Customers Visits:Customers Visits:
Visits to a customer’s place of aVisits to a customer’s place of a
business provides another ay tobusiness provides another ay to
gather information.gather information.
Through which you can get directlyThrough which you can get directly
Report Card:Report Card:
Another very effective informationAnother very effective information
gathering tool is report card.gathering tool is report card.
It is usually sent to each customerIt is usually sent to each customer
on a quarterly basis. In whichon a quarterly basis. In which
customer has to grade thecustomer has to grade the
company's performance etc…company's performance etc…
The Internet and Computers:The Internet and Computers:
Some managers are beginning toSome managers are beginning to
monitor discussions that take placemonitor discussions that take place
on the internet to find out whaton the internet to find out what
customers are saying about theircustomers are saying about their
There re even internet sites whichThere re even internet sites which
takes customers complaint abouttakes customers complaint about
product and gives grades on theproduct and gives grades on the
Employee Feedback:Employee Feedback:
Employees are often an untappedEmployees are often an untapped
source of information.source of information.
Although customer research revealsAlthough customer research reveals
what is happening, employeewhat is happening, employee
research reveals why it is happening.research reveals why it is happening.
Mass Customization:Mass Customization:
The ultimate in customer satisfactionThe ultimate in customer satisfaction
is giving customers exactly whatis giving customers exactly what
they want.they want.
Mass customization is a direct resultMass customization is a direct result
of advances made in manufacturingof advances made in manufacturing
such as flexible manufacturingsuch as flexible manufacturing
The American CustomerThe American Customer
Satisfaction Index:Satisfaction Index:
It is established in 1994.It is established in 1994.
This index measures eight sectors that are:This index measures eight sectors that are:
Manufacturing (nondurable)Manufacturing (nondurable)
Manufacturing (durable)Manufacturing (durable)
Transportation etc…Transportation etc…
Finance and insuranceFinance and insurance
Pblc administation and govt.Pblc administation and govt.
Service Quality:Service Quality:
Elements of customer services are:Elements of customer services are:
Customer CareCustomer Care
Front-line peopleFront-line people
Customer Retention:Customer Retention:
Customer Retention is most powerfulCustomer Retention is most powerful
and effective than customerand effective than customer
Customer Retention represents theCustomer Retention represents the
activities that produce the necessaryactivities that produce the necessary
customer satisfaction, that createscustomer satisfaction, that creates
customers loyalty, which actuallycustomers loyalty, which actually
improves the bottom line.improves the bottom line.