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The Customer

The Customer. TQM’s Customer Approach. “the customer defines quality.” “the customer is always right.” “the customer always comes first.” “the customer is king.” “quality begins and ends with the customer”. Types of Customers. External - outside the organization (people who pay the bills.)

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The Customer

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  1. The Customer

  2. TQM’s Customer Approach • “the customer defines quality.” • “the customer is always right.” • “the customer always comes first.” • “the customer is king.” • “quality begins and ends with the customer”

  3. Types of Customers • External - outside the organization (people who pay the bills.) • End-user customers • Manufacturer (OEM) for suppliers. • Internal - people within your organization who receive your work • In many situations, producers have multiple customers and therefore find it useful to identify “core customers”

  4. Some Data on Customer Attitudes and Loyalty • (Source: Winning Back Angry Customers, Quality Progress, 1993) • An average customer with a complaint tells 9-10 people; if it is resolved he/she only tells 5 people. • For every complaint received, there are twenty others that are not reported. • It costs 5-10 times more in resources to replace a customer than it does to retain one. • Companies spend 95% of service time redressing problems and only 5% trying to figure out what made the customer angry.

  5. Measuring Customer Satisfaction • Example: J.D. Power -- Initial Quality Survey measures customer satisfaction - problems per 100 vehicles. • Effect of J.D. Power IQS on automotive quality? • 1998: 176 problems per 100 vehicles* • 2005: 118 problems per 100 vehicles* • How does greater customer awareness impact quality?

  6. Methods to CollectCustomer Satisfaction Data • Negative Feedback Analysis • customer complaints, warranty claims, repair records… • focus on problems • concern: many dissatisfied customers do not complain (1/20 complain). • Proactive Feedback (ask customers for their opinions) • examples: customer surveys, focus groups, “employees” as customers. • advantage: identify key product features and assess levels of performance. • Analysis of Competitor Products • examples: Benchmarking, “War Rooms” or Tear Down Analysis • advantage: “Know thy competitor, know thyself”

  7. Identifying Customer Needs Possible solutions • focus-group discussions • individual and group interviews • surveys • comment cards • study repair and return data • customer complaints • warranty claims • analyze competitor products

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