CUSTOMERS, CLIENTS AND MARKETS.

The need for quality professionals in a dynamic global market.

Preamble

A rock and roll band may seem to be an unlikely example for the topic on customers, clients and markets as a quality concept, yet consider these facts.

The Grateful Dead achieved great success in the 90's and commanded one of the most loyal followings of any musical group in the United States.

• Instead of barring recording equipment from their concerts, a standard practice designed to promote record sales, the band sets aside a special area in the concert halls to accommodate fans' recording equipment.
• The quality of lighting and sound exceeds that of most bands.
• They keep ticket prices at or below the average price of other rock concerts.
• Their concerts are often nearly twice as long as other performers – up to three and a half hours- and no songs are repeated during a four-night stand in one city
• Fans can obtain tickets by mail instead of waiting in long queue. With their tickets, fans also receive a list of inexpensive hotels, restaurants, and camping facilities in the area.

The 'Dead' maintained a loyal customer base, affectionately called 'Dead heads'. Their customer focus paid off handsomely; estimates of annual ticket revenue consistently exceeded thirty million dollars $30m.

Customer – the honourable guest.

In Japanese the word –okyakusama- means both 'customer' and 'honourable guest'. Satisfying customers is perhaps the most legitimate competitive goal of any business. World-class organisations are obsessed with meeting and exceeding customer expectations.

Within a quality conscious company, both the planning of products and the planning of systems that makes or delivers those products focus on fulfilling the needs and expectation of customers. To achieve customer satisfaction, the organisation identifies customers' needs, designs the production and service systems to meet those needs, and measures the results as the basis for improvement. The company also integrates customers into the strategic planning activities of all managers so as to attain competitive advantage.

Focusing on customers is not just a quality issue; it is sound business practice. The strategic management literature defines competitive advantage as a firm's ability to achieve market superiority over its competitors. A strong competitive advantage is characteristically driven by customer wants and needs. A company's customer–driven focus actually addresses all stakeholders: customers, employers, suppliers, stockholders, the public and the community.

Consumer benefit package

Any business has the following four goals.

1. To satisfy its customers.

2. To achieve higher customer satisfaction than its competitors.
3. To retain customers in the long run.
4. To gain market shares.

To achieve these goals, a business must deliver ever-improving value to its customers. Customers no longer buy solely on the basis of price. They compare the total package of products and services that a business offers, sometimes called the consumer benefit package, with the price and competitive offering. The Consumer Benefit Offering influences the perception of quality and includes the physical product and its quality dimensions; pre-sale support, such as ordering, rapid, on-time and accurate delivery; and post sale support, such as field service, warranties, and technical support.

If competitors offer better choices for a similar price, consumers will naturally select the package with the highest perceived quality. Thus, understanding exactly what consumers want is absolutely crucial to competitive success. If a competitor offers the same package of goods and services at a lower price, customers make the choice. However lower prices require lower cost if the firm is to continue to be profitable. Quality Improvement in operations reduces cost. Therefore, businesses must focus on both continually improving product quality and reducing cost

Customer satisfaction occurs when products and services respond to customer needs; that is when products and services meet or exceed customer expectation. Customer satisfaction translates directly into increased profits. Loyal customers spend more, refer new clients, and are less costly to do business with. Studies at IBM have shown that each percentage point in improved customer satisfaction, translates into five hundred million dollars, $500m more revenue over five years.

Poor quality products and services on the other hand, lead to customer dissatisfaction in the form of complaints, returns, and unfavourable word-of-mouth publicity. Dissatisfied customers complain with their feet, they purchase from other competitors. Studies have shown that customers are five times more likely to switch because of perceived service problems than for price concerns or product quality issues. In addition it costs about five times more to gain a new customer than to keep an existing one. Studies have also shown that dissatisfied customers tell at least twice as many friends about bad experiences than they tell about good ones.

Moments of truth

In service, customer satisfaction or dissatisfaction takes place during the moment of truth – every instance in which a customer comes in contact with an employee of the company. Moments of truth may be direct contacts with company representatives or service personnel, or when customer reads letters, invoices or company correspondence. Problems results from unkept promises, failure to provide full services, services not provided when needed, incorrectly or incompletely performed services, or failure to convey the correct information. At the moment of truth, customers form perception about the quality of the service by comparing their expectations with actual out comes.

Customer retention is a key factor for competitive success and is closely tied to quality and customer satisfaction. Product features heavily influence the first sale to customer. At this time, customers do not know what quality problems may result. However, product quality and the service rendered during the product's life determine the number of subsequent sales. Growth in market share is strongly correlated with customer satisfaction. Successful companies in every industry engage in a variety of customer-oriented practices that lead to profitability and increased in market share. These are generic practices, and some specific examples from Quality Award winners. These practices require skill and techniques of quality professionals and /or officials.

Quality Management Systems a base to Total Quality Management

Well-developed quality assurance systems have functioned in manufacturing for some time. However, these systems have focused on technical issues such as reliability, defect measurement, and process control. The transition to a customer-driven organisation caused fundamental changes in manufacturing practices. These changes are particularly evident in product design, workers empowerment and supplier relations. Product design, for example, integrates marketing, engineering, and manufacturing operations.

Empowering workers to collect data, perform analysis and take responsibility for continuous improvement moved the responsibility for quality from the quality control department onto the factory floor. Suppliers became partners in product design and manufacturing efforts. As the success stories of manufacturing quality improvement spread in the United States, services, governmental agencies, and educational institutions began to look seriously at how to adopt the principles to their unique organisational cultures. Since then, Total Quality Management (TQM) has permeated every aspect of our society.

The world famous quality guru Dr. W. E. Deming summed it all. He commented:

'It would not suffice to have customers who are merely satisfied. An unhappy customer will switch. Unfortunately, a satisfied customer may also switch, on the theory that he could not lose much and might gain. Profit in business comes from repeat customers, customers who boast about your product and service and customers who recommend you to their friends'

'Who will survive? Companies which adopt constancy of purpose for quality, productivity and service, and go about it with intelligence and perseverance, have a chance to survive. They must, of course, offer products and services which have market. Charles Darwin's law of survival of the fittest and that the unfit do not survive holds good in free enterprises as well as in natural selection. It is a cruel and, unrelenting law'.

'The problem will solve itself. The only survivors will be companies with constancy of purpose for quality, productivity and service'.

Training- just don't do it organise.

There is therefore the need to train quality officers in order to equip them with the requisite skills and techniques to handle quality matters across every facet of organisations. This training does not necessary come out of the formal education offered by the Universities and Polytechnics and this undermines practises in industry in their quest to create quality environment in organisations.

Officers who are engaged in quality assurance work should have the professional training and qualification that would enable them carry out task assigned to them in order to meet organisational goals and objectives. In the United Kingdom for example, this training has been taken up by the Chartered Quality Institute (CQI). CQI offers courses in quality through their education centres world wide. All Quality Assurance officers who have no formal training, fresh graduates from tertiary institutions, who have quality at the heart of their career and owners and managers of SME's are encouraged to seek training in quality for the development of skills and sustainability of their businesses.

Dr. Nii Adzei Osekre
Consultant, ASQS
[email protected]
[email protected]