Market Driven Quality

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Customer Satisfaction or Market Driven Quality

It is clearly very important to establish the customer's perception of the quality of product and service provided. This may be in some part determined from customer complaints or warranty returns, but it is often stated that the customer rarely complains, they just don't come back. When this statement is balanced with - the amount of investment (financial and resource) that is being placed on identifying and gaining new customers, (seen as a means of increasing market share) against the investment on retaining old customers. Then maybe the effort and resource is being placed in the wrong area.

If old customers are being lost, possibly at the same or higher rates as gaining new customers, then a new approach is required. It may be worth considering investing money on retaining existing customers. On this basis customer loyalty is worth ten times the price of a single purchase, as a loyal customer will return to make further purchases.

A Sales Director of one successful organisation believes that if customers like the service, they will tell three people. If they don t like the service, they will tell eleven people. This illustrates the effect of a customer complaint over customer praise and how quickly news of bad information over good information spreads. (What sells newspapers, is it good or bad news? - I seem to remember a newspaper that purported to tell only good news quickly failed). Le Boeuf suggested that organisations spent six times more obtaining new customers than keeping old customers.

A study detailed by Le Boeuf on the reasons why customers no longer dealt with a particular supplier gave the following results:
bullet3% move away giving no reasons,
bullet5% develop other supplier relationships,
bullet9% leave for competitive reasons,
bullet14% are dissatisfied with the product,
bullet68% quit because of an attitude of indifference toward the customer by the owner, manager, or some employees.

Below is a typical approach.

The issues that may need to be considered are: 

bullet Firstly to "understand the customer needs and requirements".
bullet To examine various means available to determine levels of Customer Satisfaction (and dissatisfaction), "Measures of Customer Satisfaction"
bullet To examine the use of questionnaires as one means of determining levels of Customer Satisfaction. Including the
bullet Reliability of such methods
bullet The various sampling techniques available
bullet The methods that can be employed to increase response rates
bullet And some example Customer Satisfaction questionnaires

For further information regarding this article or on measuring, monitoring and improving levels of Customer Satisfaction please contact Alice Lennie.



2007 Quality Management & Training Limited                            updated: 2nd March 2009

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