Kenneth J. Andrews EMP-5179-8-1 Manufacturing Systems: EMP-5179 Module #8: Customer Interactions,...

Kenneth J. Andrews EMP-5179-8-1

Manufacturing Systems: EMP-5179

Module #8: Customer Interactions,Requirements & Metrics

Dr. Ken AndrewsHigh Impact Facilitation

Fall 2010


EMP-5179: Module #8

Customer Satisfaction: Who’s Job?

Customer Metrics: What to Measure?

Customer Interactions: What to Say?


Who Wants What...

CustomerLow CostHigh QualityAvailability

Your CompanyProfitRepeat BusinessGrowth

Cash !!Cash !!

Value !!Value !!


Applying Collective Responsibilityto Delighting Customers

CustomersHuman

Resources

SeniorMgmt.

Sales &Marketing

CustomerService

ProductR&E

FinanceManuf.


Total Solution Model

INSTALLATIONHook up serviceDebuggingCompatibility

SUPPORTTrainingField serviceOnline supportDocumentationUpgrades

INTEGRATIONRegulationServicingOther products requiredWorkforce concerns

CUSTOMER BENEFITSWhat’s in it for me?Will my company make more money?Will the process provide a competitive advantage?Will it satisfy my clients?Will I be a hero/heroine?


Role of Product Development/Engineering

“Just design what the Customersreally want.”

Involve Customers directly- polish engineers’ communications skills

Expect Customers’ needs to change – “early warning + fast response”

Observe Customers using the equipment- in their environment

Project management is not a natural talent- train in these skills

Customer + Schedule + Cost + Quality


Role of Manufacturing/Operations

“Build it good – zero defects.”(and fast, and at lowest cost, and with no inventory,

and without a current forecast)

Be involved in development (DFM)

Don’t let “lean” equal “mean”

Understand exactly how the Customer defines “quality” (use the same tests)

Proactive Customer feedback (visible)

On-time deliveries

Work in partnership to produce forecasts

Beware of “silos”


Customer Satisfaction & Loyalty

Recent research (Sasser & Reichheld) is showing that:

1. Market share may not be the primary driver of profitability.

2. Customer loyalty is more often associated with high profits and rapid growth.

3. The major determinants of Customer loyalty are the perceived value of the goods & services.

They estimate that a 5% increase in Customer loyalty could generate profit increases of 25-85%


Role of Customer Service/Support“Customers expect 100% availability.”

Be involved in development - design for service (DFS)

Use as conduit for market intelligence- provide the time, tools and incentives

Rotate engineers (and others) through service - “reality check”

Training- technical, decisions, communications

Reward longevity of staff - frequency of personnel changes is big Customer complaint

Measure often- use fail-safe “red flag” routes on product quality


“Just win the order”

Accurately convey Customer feedback- encourage x-functional Customer interactions

Don’t over-commit- sell what you know you can make

Focus & target ….. and stay the course- “no”

Develop acute listening skills- revisit the “Customer Presentation”

4Ps + 3Rs = New thinking! Need new metrics?- product, price, promotion, place- retention, related sales, referrals

cost to attract = 5 times cost to retainnew Customers existing ones

Role of Sales & Marketing


Role of Finance

“What’s the Number of Days Outstanding?”

Accurate invoicing

Tracking project costs

etc. etc.

+ Supporting business analysis

Return on Investment (ROI)- taking internal & Customer perspectives

Creative pricing strategies

Tracking “balanced scorecard” metrics


Role of Human Resources

Customer value is achieved primarily through employees who are satisfied, loyal, productive, and have a high level

of capability (i.e. adequate “tools” to do the job).

Locate and hire the best resources Retain skilled people (working conditions, turnover metrics) Support continuous training – and protect its $$ Measure the organization’s pulse frequently - listen

Employee Satisfaction = Customer Satisfaction


Role of Senior Management

“We Must Be More Customer-Focused.”

Define company strategy clearly – confirm implementation

Measure senior management performance using Customer satisfaction metrics (walking the talk?)

Accompany front-line troops on Customer visits- understand Customer’s business perspective- appreciate role of your resources

Solicit Customer feedback- use it!- remember the “complaint iceberg”

Consistently support focus strategies (e.g. Key Customers)


Applying Collective Responsibility to Delighting Customers

Beware of silos!- encourage x-functional programs

Eliminate conflicting measures of success- use consistent balanced scorecard

Apply process improvement which is results-driven- involve everyone, including Customers and Suppliers

Agree priorities- investments, metrics, Customers & markets

Everyone’s Role is Criticalin Delighting Your Customers!


EMP-5179: Module #8





What Are They?3 to 5 key measurable

Customer requirements.They are agreed upon

with your Customer(s). Your 5 Ups must be

requirements you impact.

When Do WeUse Them?

When we want to continuously improve our work processes. This in turn ensures

Customer Satisfaction.

Why Are They Important?They insure a link between what

we do and measure, and what theCustomer requires.

5-Ups: Customer Measurements

CUSTOMERCUSTOMER

I Want


Constructing a 5-Up Chart

1. Identify your Customer(s).

2. Brainstorm their requirements.

3. Pick the 3-5 most important measurable Customer requirements as seen through the eyes of your Customer(s).

4. Establish how to measure the requirement.

5. Have your Customer identify best (6), average (4) & worst (1) performance - from suppliers of similar products/services.

6. Baseline and graph your current performance.

7. Set a continuous improvement goal (< 3 months).


Preparing a ‘5-Up’

1 4 6 sigma

Benchmark

Average

World’sWorst

Customer:Requirement:

Gen-X today

Gen-X target


5-Ups in the Real World

Finding out what your Customers really want can be tricky(“I want the best at the cheapest price, and I want it now.”)

Interactions (i.e. dialogue) with Customers are always more useful than questionnaires.

Requirements without metrics are not useful.

Measuring frequently is a pain, but highlights successes – keep the charts visible.

The shape of a traditional 5-Up can be confusing.

All this is well worth the effort - this is a product developer’s best prioritizing tool.


Warranty & Guarantees

The world is full of guarantees, no two alike. As a rule, the more words they contain, the more their protection is limited. The Lands' End guarantee has always

been an unconditional one. It reads:

"If you are not completely satisfied with any item you buy from us, at any time during your use of it, return it and we will refund your full purchase price."

“We mean every word of it. Whatever. Whenever. Always. But to make sure this is perfectly clear, we've decided to simplify it further.”

“GUARANTEED. PERIOD.®”


EMP-5179: Module #8





Communication Shortfalls

Good communication is a series of checks- on ourself and on our colleagues

Talking

Listening

Listen toYourself Talking

Listen toYourself Listening


Your Product or Service

How would you describe yourproduct/service in a compelling

and attractive way?

Think about “BUYING”,not “SELLING”


Customer Interactions: What Problems Could Arise?

They find it hard to explain their requirements

Measurements are difficult to define (e.g. quality)

They just want to talk about recent problems


Customer Interactions: How to Prepare Effectively?

Be ready to explain clearly what we are doing – why it’s different

Provide good ‘benefits’ for the Customer’s effort

Brainstorm possible ‘requirements’ and ‘metrics’

Practice drawing the 5-Ups chart!


Customer Interactions: Refresher

Practice ‘active listening’ – you’re in discovery mode

You can significantly increase clarity, by making ideas visible

Choose between ‘open’ and ‘closed’ questions when appropriate

Playback to ensure both parties are in agreement

Focus exclusively in completely understanding issues from the Customer’s perspective – “how” to respond comes later

Start every sentence with “Yes, and …”


Customer Success

1. Your Customer is your pay-check.

2. Your attitude determines the degree of service excellence.

3. The true value of a Customer is 20x his/her annual sales.

4. A re-order sale is 100x easier to get than a new one.

5. Word-of-mouth advertising is 50x more powerful than conventional advertising.

6. Your Customer’s perception defines your success or failure.

7. Start each Customer interaction with “yes”, and …

“No problem.” “I’m sure there is a way ….”“I believe I can help you …” “Consider it done.”


Preparation for Next Week

I recommend you start your term paper soon

Watch for new articles/links on the website

Watch for material for module #9

Please bring either very good OR very poor examplesof companies using “benefits” instead of “features”

Kenneth J. Andrews EMP-5179-8-1 Manufacturing Systems: EMP-5179 Module #8: Customer Interactions,...

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