Developing Internal Process Standards From Customer Feedback 12 th Annual ASQ Service Quality Conference Toronto, Canada September 15, 2003 www.burke.com
Agenda Background / Experience Business Linkage Models Linking External Feedback to Internal Processes Examples / Tools Keys to Program Development How to Operationalize the Data Discussion Page 2
Background 26 Years in Sales / Marketing / Business Management Eastman Chemical Four Days with Dr Deming Director Customer Satisfaction (8 of 26 Years) Michael Hammer and Adrian Slywotzky Influence Benchmarking with CATCSE 3 Years on Sell Side Page 3
CATCSE C ompetitve A dvantage T hrough C ustomer S atisfaction E xcellence Page 4
CATCSE Members: Microsoft Xerox Milliken Disney Ford Credit Allied Signal Johnson & Johnson IBM United Van Lines USAA Nortel Eastman Chemical Merrill Lynch CIBC Page 5
Benchmark Focus 1. Data Design / Analysis / Integrity Survey design Sample Issues Collection Methods Analysis Techniques Etc. Page 6
Benchmark Focus 2. Data Linkage, Alignment and Deployment Link Customer Data with Employee, Operational and Financial Data Align Customer Data With Operations and Business Strategy Deploy Customer Data for Operational Actionability Page 7
Conclusion: Competitive Advantage is Not Gained by Data Design or Analysis Competitive Advantage is Gained by How Well You Link, Align, and Deploy Customer Data Within the Company Page 8
Conclusion: Gain Competitive Advantage by Linking Aligning, and Deploying Customer Data Within the Company Easy to Say, But Hard to Do! Lack of Linkage, Alignment, Deployment - Primary Reason for Program Failures Page 9
Agenda Background / Experience Business Linkage Models Linking External Feedback to Internal Processes Examples / Tools Keys to Program Development How to Operationalize the Data Discussion Page 10
Linkage and Alignment Not New Various Management Models Malcolm Baldrige Service-Profit Chain Model Balanced Scorecard Action-Profit-Linkage Model Value Chain Model All Emphasize Enterprise-Wide Perspective Linkage, Integration and Alignment as a Key to Business Success Page 11
Customer Loyalty Linkage Model L E A D E R S H I P Business Strategy & Resource Allocation Decisions Employee Engagement Operational Effectiveness Customer Business Loyalty Loyalty Results Results Key Steps: 1. Measure 2. Link and Align 3. Improve 4. Measure Page 12
Linkage Across the Enterprise Downstream Financial Results Upstream Process Employee Page 13
Agenda Background / Experience Business Linkage Models Linking External Feedback to Internal Processes Examples / Tools Keys to Program Development How to Operationalize the Data Discussion Page 14
People Linkage Tool Understand the the functional areas areas that that own own the the attribute. Survey Attribute Functional Area Customer Service Marketing Sales Manu facturing Logistics Information Systems R&D Field Engineering Corporate Mgmt. Problem Resolution Competitive Pricing Scheduling Delivery Product Availability = PRIMARY = SECONDARY = TERTIARY Page 15
Process Linkage Tool Identify the the internal processes and and activities that that have have an an impact impact on on the the attribute. PRODUCT AVAILABILITY Processes Processes & Activities Activities Customer Service Marketing Owners Owners Manufacturing Logistics Information Systems Demand Forecasting Production Planning Production Scheduling Inventory Management Order Entry & Confirmation Shipment Scheduling Allotment Policy Page 16
Measures Linkage (The Approach) 1. Customer Requirements 2. Internal Business Process 3. Internal Process Measure 4. Customer Feedback Measure Sometimes A Moving Target Where the Work Is Done (Leading) Internal Measures (Leading & Lagging) External Measures All Must Measure the Same Thing!!! Page 17
Measures Linkage Tool (Examples) Customer Requirements Internal Process Internal Process Measure Customer Feedback Measure DELIVERY: Delivery When requested Delivery of Material to Customer % Shipments Delivered When Requested Delivery Complaints On-Time Delivery from Survey Customer Audits SUPPLIER CONTACT: Low Turnover of Sales/Service Reps Assigning Customers New Sales/ Service Reps % of Customers With New Sales/ Service Reps -Previous 12 Months -Previous 24 Months Supplier Contact from Survey Page 18
Process Linkage : Setting Internal Performance Targets How Is it Currently Done? Optimum Process Capability Historical Process Performance Stretch Goal to Get Employees Attention Why Not Set the Target Based on Customers Desirability with Varying Levels of Performance? Granular Measurement Outside - In Approach Page 19
Typical Customer Satisfaction Results Customer Service Attributes Performance Ratings Importance Ratings Provides Answers on First Call 4.0 4.8 Flexibility 3.6 4.9 Answers Phone in two rings 3.9 4.8 Decision: IMPROVE RESPONSIVENESS OF CSR But, what exactly does one do to improve responsiveness? Answer phone on one ring? Say thank you more? One call resolution? Page 20
What is the problem? Improving responsiveness is still to soft a direction and has too much individual interpretation for specific action. Responsiveness may consist of multiple behaviors The key issue is: What exactly is Customer Service going to do to fix the problem and build satisfaction and loyalty? Page 21
Solution to Problem The Operation Areas Want Hard Measures Actionable! Clearly State What Needs to be Done Specify Where to Improve and Where to Relax Standards Performance Against Standards Has Big Impact on Staffing Levels and Other Resource Decisions Improving Hard Behavior Internal Measures Will Improve Customer Experience and Customer Loyalty Page 22
Solution to Problem Measure Desired Behavior, Not Perceptions Measure Something You Can Change Collect Hard versus Soft Measures Measure at a Very Granular Transaction Level Ensure Measures Are Actionable Page 23
Key Change in Research Emphasis What are the Drivers of Customer Satisfaction? Which Internal Behaviors Need to be Changed? Provide the Operations Truly Actionable Data Page 24
Data Collection Approach Rate the desirability of each outcome: Ways to Request Service Undesirable Neutral Desirable Reach rep right away, no computerized system 1 2 3 4 5 6 7 Computerized System, option of transfer to rep 1 2 3 4 5 6 7 Use Company Web Site 1 2 3 4 5 6 7 Computerized System, never speak with rep 1 2 3 4 5 6 7 Very Not at all Very Extremely How important to you is this entire issue? 1 2 3 4 5 6 7 Rate how XXX performed (circle one): Reach rep right away, no computerized system 1 Computerized System, option of transfer to rep 2 Computerized System, never speak with rep 3 Data Collection Method: Self-administered by mail, internet - Respondents must see all service options Page 25
Level of Service Data Analysis Approach Ways to Request Service % of respondents who experienced each service level -100-80 -60-40 -20 0 20 40 60 80 100 Reach rep right away, no computerized system Computerized system, option of transfer to rer 20 30 Positive utility 12% 63% Use company web site Computerized system, never speak to rep Negative utility -70-35 Red arrows show the jump or marginal utility between service levels 12% 13% Utility Page 26
How Does This Support Operations Decision Process? Determine Where Highest Potential for Improvement Resides Not absolute importance of an attribute But importance of improving performance to the level that provides the most positive utility Balance improvement or relaxing of the internal standard vs staffing and or resources required Balance the Gain vs the Pain Page 27
Keys to Program Development 1. Review Current Transaction Data and Internal Measurement Performance Issues to Determine Program Design 2. Select the Transaction Area That You Know Has the Biggest Impact on Customer Loyalty 3. Select Granular Transaction Measures as Your Targets 4. Develop Intuitive Behavior Options for Each Granular Transaction 5. Collect and Analyze Customer Feedback on Desirability Options Page 28
How to Close the Loop 1. Collect and Analyze Hard Behavior Measures That Align With Internal Performance Standards 2. Review Internal Performance Results vs Behavior Measure Results 3. Determine What Changes Are Appropriate For Internal Performance Standards 4. Implement Appropriate Changes In Staffing Levels, Resource Allocations and/or Internal Measures Based on Your Analysis and Business Case 5. Track Overall Perception of Transaction Performance to Validate Improvement in Customer Experience Page 29
For More Information Contact: Bill Barnes Vice President Burke, Inc. 317-571-0863 bill.barnes@burke.com Page 30