You are nothing without your customers. Sure, this statement teeters on cliché, but it's a fact nevertheless.
Understanding that your organization exists for no other reason than to meet customer needs and expectations, it's imperative to develop proactive methods for understanding what your customers
like and dislike. If you believe otherwise, just glance behind you at the long queue of competitors lined up and waiting for the opportunity to prove you wrong.
stiff competition an everyday reality, it's no surprise that the strongest additions to ISO 9001:2000 are the various requirements related to customer satisfaction, which move the standard
squarely into the arena of strategic management. Because analyzing and acting upon customer feedback data has always been an initiative led by top management, an organization's quality system
suddenly takes on significance that would have been rare--but certainly welcomed--just a few years ago.
Customer satisfaction is a general theme that's woven throughout ISO
9001:2000. Indeed, it's presented, along with continual improvement, as one of the major purposes of a management system. Nearly every section of the standard includes some link to customer
satisfaction requirements, e.g.:
Top management shall provide evidence of communicating to the organization the
importance of meeting customer requirements (Section 5.1a).
Top management shall ensure that customer requirements are determined and met in order to enhance customer satisfaction (Section 5.2).
Inputs to management review shall include information on customer feedback (Section 5.6.2b).
The organization shall determine and provide the resources needed to enhance customer satisfaction (Section 6.1b).
The organization shall monitor information relating to customer perception as to
whether it's met customer requirements (Section 8.2.1).
Data analysis shall provide information relating to customer satisfaction (Section 8.4a).
When these requirements are boiled down, you end up with three basic themes: top management leading the pursuit of customer satisfaction, the organization effectively
gathering data, and the organization analyzing data to drive actions and decisions. We'll examine how these themes interact to create an effective customer satisfaction
system that satisfies ISO 9001:2000.
Top management leadership
Creating customer satisfaction is not something an organization does simply to satisfy ISO 9000:2000 requirements; it's something an organization does to stay in business.
Top management must embrace this reality by acknowledging, communicating and acting upon three basic truths:
Customer satisfaction is the ultimate goal. There's no higher achievement than to
satisfy the customers whom an organization has committed itself to serving. This doesn't mean that the organization becomes a not-for-profit institution. Financial
control is needed, along with accountability and sound decision making. But revenues and profits are nothing more than the ultimate outcomes of fulfilling customer needs and expectations.
Customer satisfaction is an investment
. Customer satisfaction processes don't often produce results in the very short term. Rather, the payoffs are usually realized in
the medium or long term. Resources must be applied to understanding customer requirements, collecting data about customer perceptions and analyzing that data. The
combined resources required for these activities form one of the most important investments that an organization can make, and this fact should be clearly reflected in budget planning.
Everyone must be involved in customer satisfaction.
All personnel have the capability, at some level, to influence customer satisfaction. Top management must communicate exactly how personnel will be expected to contribute because it's often
not intuitively obvious how this is possible. Here are some real-life examples collected from organizations:
* Ritz-Carlton hotels employees may spend up to $2,000 to correct a deficiency or rectify a customer complaint.
* Wal-Mart employees are instructed to do everything possible to respond to customer requests before "sundown" on the day the requests are received.
* Texas Nameplate Co. customer-care personnel, including the company president, are available to customers 24 hours a day.
The more that employees understand their roles in creating customer satisfaction, the
better they'll be able to participate. In the above examples, employees' roles are very clear.
The combined effect of this top management leadership should set a tone of
customer focus throughout the organization. Management should also pave the way for adequate resources to be applied to the effort. Once the cultural tone has been set
and resources provided for understanding customer perceptions, it's time to begin gathering data.
Effective data gathering
Organizations have endless opportunities for gathering data about customer satisfaction. The information is literally everywhere; the challenge is to receive the
right kind, from the right parties, in the correct time frame.
The first step in the process of obtaining data is for the organization to identify whom
it considers its customers. But there are many different customer strata that could fit the description, and whomever the organization chooses to consider its customer will
obviously drive the selection of data-gathering techniques. Customers generally fall into three categories:
Current customers. These parties are currently purchasing and/or using your
products. Within this broad category, there are many other subcategories, including:
. These customers might not currently buy your product but could in the future.
Lost customers. They were customers, but something happened to end the relationship. Lost customers might also fit into the prospective customers category.
The second step is for the organization to determine the issues that are important to
its customers. The dilemma here is that these issues aren't often immediately obvious to the organization. The following six issues represent the range of issues that are
important to most customers:
. Were the order requirements, as stated by the customer, met?
Performance. Did the product do what it was expected to do? Even if the customer ordered and received product XYZ, he or she will be upset if product XYZ
doesn't perform as expected. Performance is where understanding unstated needs and desires can become critical.
Value. Did the transaction represent a satisfactory cost-to-benefit ratio? In other
words, did the customer "get his or her money's worth"?
Courteousness. Were personnel representing the organization helpful, polite and empathetic?
Knowledge. Did representatives have access to necessary information, and were
they able to communicate it?
. Were personnel able to respond effectively to any problems and/or issues that arose?
It's significant to note that half of these concerns relate to the ordered product, and half relate to the personnel who facilitated the transaction. So, the lesson is that all
products have a significant human element factoring into customer satisfaction.
After identifying the customer and determining the important issues, the organization
can begin thinking about data-gathering methods. Entire textbooks have been devoted to techniques for determining customer satisfaction, so we'll just take a quick look at
a sampling of methods. Note that most organizations are going to have a portfolio of methods for obtaining data.
When people think about gauging customer satisfaction, surveys often come to mind. One word of caution, however: ISO 9001:2000 doesn't require customer surveys.
Many people are reading the words "customer surveys" into the requirements, but they're simply not there.
Customer surveys generally contain a range of statements or questions that relate to customers' experiences in dealing with the organization. A rating scale is typically
paired to a statement/question, requiring respondents to choose either yes or no for questions or, for statements, to select a point along a continuum that indicates their
response. The most widely used format for the continuum-type response is a range of points representing the measure of agreement or disagreement with a provided
statement. Examples of both of these formats follow:
Rating scale. My last order arrived on the date promised. Yes___ No___
Continuum scale. The customer service representative matched me with the correct product for my application.
Please select from this scale:
1 2 3 4 5
(1-strongly disagree, 2-disagree, 3-neutral, 4-agree, 5-strongly agree)
Obviously, the continuum format (also referred to as a Likert scale) offers more analysis potential than the yes/no option because it provides more data. Also, the
yes/no format requires that respondents commit to an absolute answer, when the reality of most situations is not quite so simple. Neither format explicitly allows
respondents to rate how important the issue is to them, though this could be added as another variable.
Survey development includes two major tasks: Questions must be written or selected, and a scale must be chosen. These are both significant undertakings.
Survey questions should represent the full range of issues that are important to customers, and this work should be done prior to selecting data collection methods.
The questions also must be written clearly and concisely to get to the heart of the issue that the organization is trying to explore.
When choosing a scale, a balance must be struck between resolution and complexity. A nine-point response scale offers great resolution, but its complexity negates any
benefits. A yes/no format is very simple, but has little resolution. There are also issues related to the statistical significance of various scale types.
Does the construction of an effective customer survey sound complicated? It should. The time and effort that go into developing a survey are significant. Plus, there are
logistical issues related to getting the survey to the right person and then receiving a response. In all the years that I spent in industry, I never saw an organization
successfully develop and implement a customer survey without outside assistance. Therefore, seeking help from experts is strongly recommended for organizations that
decide to pursue customer surveys as a data-gathering method.
Comment cards can be found nearly everywhere. It's difficult to check into a hotel, eat in a restaurant or purchase a consumer product without seeing one. But it takes a
great many cards to get a few responses, and most people complete a comment card only if something very good or very bad has happened; so the results are often skewed.
Nevertheless, when acted upon, comment cards can generate significant customer loyalty. Many organizations provide incentives, such as free meals, free hotel stays
and discounts on future purchases, to individuals who submit negative feedback on comment cards. These "freebies" can generate significant goodwill, provided one
condition is met: The compensation is paired with an improvement from the bad experience. The message to the customer must be, "Not only will you receive a free
night's stay in our hotel, but we'll do everything in our power to remedy the situation that you told us about." Thus, the customer actually receives two things--a freebie
and a fix. A fix without a freebie is fine, but a freebie without a fix is worthless.
Many organizations have decided that comment cards are a good way to gather
demographic data (e.g., name, address, phone number and product preferences) about their customers. In fact, for some organizations that's the only real purpose of
the card; they couldn't care less about the customer feedback received. Deceptions of this kind are transparent to most customers, who usually resent the intrusion. If you
want to get the most out of this survey method, don't try to dupe your customers in this way.
The term "field reports" represents a wide range of tools and practices. In essence, field reports provide a way for company representatives in the field, or interacting
with the field, to report what they've learned from customers. In some organizations, field reports are very structured, requiring answers to specific questions along a wide
range of issues. In other organizations their content is left up to the person writing them, ensuring a great deal of variation. The value of the information over the long
term will usually vary with the degree of structure applied to the field report format.
Field reporting can be applied in a wide range of circumstances. Here are just a few
of the situations that could produce data for field reports:
Sales visits to customers and/or retail dealers
Troubleshooting visits by technical personnel
Service calls by repair personnel
Telephone conversations with customers by customer service
Observations of products in use by employees
One of the best arguments for using field reports is that they're probably already
being used to some degree in most organizations. The trick is to leverage all the opportunities for gathering field data and channel them into a format that enables analysis and action.
What is the most effective type and format of a field report? The answer will differ on a case-by-case basis. In fact, nearly everything about field reports will be highly
customized. For companies that decide to develop field reports as a systematic way of gathering customer satisfaction data, the following is the most logical way to proceed:
1. Identify the circumstances that will trigger field reports.
2. Decide who will be responsible for generating field reports.
3. Brainstorm the specific types of data that will captured.
4. Agree on procedural rules (e.g., time frames and protocols).
Probably the biggest hurdle to completing field reports is discipline. The trouble is that they happen after the fact, when the trip is already over. Additionally, very few
people like to write reports, especially when they're tired and burned-out from being on the road or dealing with customers. For this reason, it's very important that field
reports be simple, user-friendly tools. Otherwise, they won't get used.
Analyzing customer complaints
When you receive a customer complaint, you know exactly where you stand with that customer, right? Sure. This is especially true if the organization broadly interprets
"customer complaints" as any negative feedback that the organization receives. Whether the complaint is justified or not is irrelevant; perception becomes the customer's reality.
But trouble starts when organizations rely on customer complaints as their only gauge of customer perceptions. The weaknesses inherent in relying solely on complaints are
First, many dissatisfied customers simply don't bother to complain. They've decided
that it's not worth the time and effort for them to communicate the problem. In fact, they might just decide that it's not worth the risk of placing another order. The
organization might lose a customer and not even understand what went wrong. And it's much more expensive to regain a customer than to retain one.
Second, complaints, by definition, provide only negative feedback. An organization can't understand the full range of customer perceptions based on negative feedback
alone. A system for gathering customer perceptions should present a balanced picture of where the organization stands, which doesn't happen when customer complaints
are isolated from other aspects of customer relations.
That being said, customer complaints can be an effective part of an overall system
for gathering data on customer perceptions. The trick is to pair this method with at least one other, the combination of which will give an organization a more accurate
view of its status in customers' minds.
Two specific types of complaints can be especially useful in maintaining an
organization's success: repeat complaints (e.g., complaints about the same product, for the same reason or from the same customer) and complaints that pose significant
risk to the organization. Analysis of complaint data can identify these phenomena, and management can then take appropriate action on the underlying issues. In these cases,
the complaint system becomes a critical survival barometer for the organization.
Customer awards and industry reputation
Seldom do you walk into a company lobby or reception area without seeing at least one supplier award on the wall. These awards go by the names of "Supplier of the
Year," "Star Supplier," "Preferred Vendor" and a thousand other monikers. Do awards of this kind have any relation to customer perceptions of meeting requirements? Of
course they do. Awards presented by customers are very real and tangible proofs of customer satisfaction, and they usually indicate a company's consistent level of success.
Companies that haven't won awards from their suppliers can still use customer ratings as indicators of their performance. Many large organizations have systems for
computing a numerical rating of suppliers based on quality, performance, cost, lead-time, responsiveness and other factors. This feedback provides a baseline that
can be compared year after year and used as a basis for improvement.
Many industry associations recognize member companies for exceptional
performance, innovation and reputation. This type of recognition, though a step removed from the customer, certainly relates to customer satisfaction and
marketplace realities. Trade magazines often publish rankings of companies within their industries. These, too, provide valuable information about customer perceptions.
Most of these methods will be complicated enough to require a written procedure of some kind. ISO 9001:2000 requires only that an organization "define" its method of
obtaining data, but controlling processes as complex as these would be nearly impossible without a documented procedure. Make it easy on yourself and your
organization by documenting your methods.
Unless analyzed and converted into information, data are worthless. Despite this obvious fact, many organizations collect reams of data on customer perceptions and
then never do anything with them.
Statistical techniques for analyzing data are well beyond this article's scope, but there
are some basic guidelines that should be embraced when an organization reaches this point in the process:
Conversion to graphics. When possible, convert the raw data into graphics that
can easily be analyzed and interpreted, including Pareto diagrams, bar charts, pie charts and scatter diagrams, which can be generated in a matter of minutes through
various software. This visual format takes the intimidation factor out of tabular data, and the less intimidating data are, the more likely they will be thoughtfully analyzed.
Base actions and decisions on analysis
. Analysis for its own sake is pointless. Pick out one or two of the biggest issues that emerge from the customer perception data
and take action. Assign responsibilities and deadlines; use project management tools to drive the process. The bottom line remains: Take action on the data!
Report to customers. Providing feedback requires customers' time and effort. Once
they expend this time and effort, customers naturally become curious. They think, "I filled out the survey; I wonder what if they're going to do anything with it?" When
possible, communicate actions based on customer feedback to the customers themselves. Such communication builds goodwill and sends a message that customer
feedback is a key input to the organization's leadership process.
An integrated system for customer satisfaction is one of the most important
functions an organization can implement. Understanding and acting upon customer perceptions can help drive heightened performance of an organization at all levels.
Smart companies will use the customer satisfaction requirements of ISO 9001:2000 to the fullest--not because they have to, but because it makes good business sense.
About the Author
Craig Cochran is a project manager with Georgia Tech's Center for International
Standards & Quality. He's also an RAB-certified QMS lead auditor. CISQ can be reached at (800) 859-0968 or on the Web at www.cisq.gatech.edu
. Cochran can be reached via e-mail at email@example.com .