CUSTOMER LOYALTY

Your Customers
Are Talking, But
Are You Listening?
by Russ Westcott

I
n our competitive environment, it is critical to
listen for and hear the many voices of the
customer (VoC). Most companies have no
process to actively listen to customers, record what
they’ve heard, and analyze, disseminate and act on
the information.
The listen, collect, analyze, learn, improve (LCALI)1
In 50 Words
Or Less
• Most organizations don’t actively listen to what
customers are saying.
• Without training employees to listen for and take
action on the voice of the customer, organizations
open the door to competitors.
• The listen, collect, analyze, learn, improve
process can help organizations gather and act on
customers’ comments.
process can help any organization capture perti-
nent customer data for analysis and action.
In Moments of Truth, Jan Carlzon, then president
of Scandinavian Airlines, wrote about the often
unrecognized opportunities all employees have
for gathering customer information.2 Karl Albrecht
further defined the moment of truth as “any episode
in which the customer comes in contact with any
aspect of the organization and gets an impression of
the quality of its service. A moment of truth is typi-
cally neither positive nor negative in and of itself. It
is the outcome that counts.”3
Without training employees to listen for and
take action on the VoC, your organization has no
early warning system. If you don’t have a measure
of how satisfied your customers are, you are leav-
ing the door open to the competition. Investigating
reasons for returned product is only a small part of
the picture.
Early Warning Signs
Though a customer’s offhand remark to a sales
or delivery person can appear insignificant, these
comments can alert you to a potential problem
before it turns into a formal complaint. A call from
your customer’s engineer to your engineer to clari-
fy specifications, for example, can indicate present

22 I FEBRUARY 2006 I www.asq.org

or potential shortcomings in clearly identifying cus-
tomer requirements. Scattered remarks from your
customer’s employees to different people at differ-
ent levels and functions in your organization can,
when collected and analyzed, form a pattern that
points to needed preventive action. Earl Naumann
says, “A firm that has no customer satisfaction pro-
gram and no interest in starting one should be the
delight of the firm’s competitors.”4
To capture these early warning indicators,
combine the concept of moments of truth with
the development of listening posts by taking the
following steps:
1. Through training, build awareness of the need
to gather all tidbits of information from your
customers’ personnel, either directly or indi-
rectly (a third party passes on what he or she
heard). Every employee at your company
should become an informal field listener on
the job and in the community.
2. Develop a system to feed information to a cen-
tral collecting place for analysis, correlation
and dissemination. Designate people to take
action and follow up.
3. Train personnel who have frequent direct cus-
tomer contact to actively listen to the VoC and
feed information back through the system.
Tom Peters says, “Use every listening post
you can find. ... Too few people, at too few
levels, in too few functions, listen too little
and too late—and ignore what they hear too
often, and act too late.”5
4. Create incentives for employees to communi-
cate customer complaints so the same com-
plaints can be avoided in the future. Caution:
Performance awards for decreasing the num-
ber of complaints can encourage cover-up.
Instead, provide incentives for increasing
client satisfaction. Instill in employees the
value that a complaint, while often viewed as
undesirable, can trigger an opportunity for
improvement and a chance to demonstrate a
commitment to excellence.
5. Make the review of the VoC part of your qual-
ity management system’s management review
process.
By capturing the VoC, your organization will
create much more than a complaint management
system. VoC can include customers’ suggestions,
their dissatisfaction with a product or service, how
they feel they were treated, their perception of
quality, what they would like in future products or
services, or their expressions of satisfaction.
Naumann says, “Corporate culture must evolve
QUALITY PROGRESS I FEBRUARY 2006 I 23
CUSTOMER LOYALTY
almost to the point where there is a pervasive fear
of losing contact with customers.”6
The LCALI Process
Before your organization begins the process to
capture, analyze and act on the VoC, it must create
awareness. Use orientation programs, training, unit
meetings, continual reminders from management
and positive reinforcement to make all employees
aware of the value of listening for and reporting
customer related comments, regardless of the mes-
sage. Employees are your field listeners.
Listen: Every employee, regardless of organiza-
A firm that has no customer
satisfaction program and no
interest in starting one should
be the delight of the firm’s
competitors.
tional level or function, is a frontline intelligence
gatherer. A casual comment made to your truck dri-
ver, a discussion overheard in a restaurant or super-
market, and a complaint made by a caller to an
inside clerical employee are all valuable inputs to the
customer information system.
Listening posts are designated employees who
have consistent contact with your customers.
They are the official deputies for funneling into
the system the data they and the field listeners
collect. Every employee needs to know who is a
listening post and how he or she can be contacted.
Collect: It’s easy for field listeners to report VoCs
to designated listening posts because comments,
opinions, suggestions, accolades or complaints are
reported without embellishment or quoted verbatim.
Employees request customers’ names and contact
information, when possible, and note the context or
situation where and when the comment was heard.
Listening posts collect and formally input data
to a customer information system coordinator
(CISC) on an established frequency, using a cus-
tomer contact record (CCR) (see Figure 1).
24 I FEBRUARY 2006 I www.asq.org
The CISC records each customer contact record
in a customer contact log, which includes:
• Date logged.
• CCR number and date of record.
• Field listener’s name and phone number.
• Listening post’s name and phone number.
• Customer’s name and phone number.
• Triage code.
• Person assigned for action, date assigned and
date of follow-up.
• Additional follow-up dates.
• Closeout code, date and name.
Analyze: If a field listener or listening post receives
data that require immediate action, the listening post
is authorized to initiate an immediate corrective
action. This includes data reported in the CCR. The
corrective action and CCR are appropriately cross ref-
erenced.
The CISC analyzes accumulated CCRs to deter-
mine the frequency of each type of comment and
identify problem patterns. The CISC prepares a
summary of the information for review at the next
quality steering committee meeting or manage-
ment review. The summary should show a rolling
three- or six-month trend and include the CISC’s
recommended actions.
Learn: When the trend analysis indicates a nega-
tive pattern, the CISC initiates a preventive action
request to improve the quality management system
to eliminate these potential problem areas. In addi-
tion to the follow-up required by the preventive
action process, the CISC is notified of the outcome
of the preventive action. The CISC provides feed-
back and reinforcement to the listening posts and
the listening posts to their field listeners, the con-
tributors. In certain cases, a customer is informed
of the action being taken.
Improve: Procedures and processes are often
changed as a result of preventive actions. The cus-
tomer data gathering process is also continually
reviewed, reinforced and strengthened.
One Organization’s Experience
This example comes from an engineering con-
sulting firm that provides structural design services
and conducts field inspections of facilities. The firm
is organized on a project basis, and multiple pro-
jects, each managed by a project manager, are under
way at any one time. The firm’s engineering, legal
 FIGURE 1 Customer Contact Record (CCR)

CCR number:
A. Identification
Contact from:
Person’s name: Title: Customer or client number:
Location: Phone:
Customer or client’s name: Fax:
Address: E-mail:
City: State/province: Country:
Field listener
Name: Position:
Department/location: Mail stop: Phone:
Supervisor’s name: Title:

B. Context, situation or place of contact

■ Complaint ■ Compliment ■ General observation: What:
■ Letter: Date: ■ Phone call: Date: ■ Face-to-face: Date: ■ Other: Date:
Describe context in greater detail if “other” is checked:

C. Quote or best recollection of words from customer or client and nature of the contact
■ Related to specific order or product: Order number: Date: Product:
■ Related to specific representative of this organization: Who: Date:
Record words used by customer or client contact. If a direct quote, use quotation marks:

Provide any details that will make the understanding of the customer or client’s perspective clear to persons reading this CCR. Note
if customer/client specifically requested notification of resolution or other feedback. Use back of form, if needed:

Field listener’s commentary (viewpoint, opinion, interpretation):

D. Action activity
Triage: ■ Action needed now (corrective action) ■ Investigate further (preventive action) ■ Watch trend
Action assigned to:
Name: Location: Phone: Date:
Follow-up:
How: Date: Date: Date: Date:
Status reports:
How: Date: Date: Date: Date :

E. Resolution and closeout

State how problem or question was resolved: By whom: Date:
Corrective action number: Preventive action number: Returned material authorization number: Other:
Procedure or work instruction affected: Date to be changed: By whom:
Forms or computer programs affected: Date to be changed: By whom:
Status or feedback to be provided: How: To whom: By whom: By date:
Closeout code: Closed by (please print): Signature: Date:

QUALITY PROGRESS I FEBRUARY 2006 I 25

CUSTOMER LOYALTY

The LCALI Process in Action

Here are two examples of how different companies used the LCALI process to effectively listen to
their customers.
Electric utility company: An urban electric utility maintained a staff of experienced representatives
whose duties included visiting major customers. During these monthly visits, the reps reviewed the
account status with the customers, discussed any problems or complaints and evaluated any correc-
tive or preventive actions recently taken.
At one such meeting with one of the utility’s top 10 customers, the rep detected the customer
contact’s negative attitude and asked if everything was all right. To the rep’s surprise, the customer
contact unloaded his personal concerns about the pending sale of his company and his potential
job loss.
The rep, as a field listener, quickly passed the information on to the designated listening post.
This triggered notification to the appropriate utility company executives, who met with the CEO of
the customer’s organization.
This heretofore unknown news would impact contracts, electric power production and distribu-
tion and many other areas of the utility. Fortunately, the field listener and listening post’s proactive
actions helped the utility assist the customer in transitioning to new ownership. Substantial cost
savings and the ability to provide timely help to the customer were also possible because of the
early warning.
Pharmaceutical company: A pharmaceutical company’s truck driver heard from a customer’s
receiving clerk that the customer’s warehousing supervisor was upset because the product came
in already shrink-wrapped. The slow moving product stored on unopened, shrink-wrapped pallets
developed condensation, which caused some of the product to become unusable.
The warehouse supervisor hadn’t complained to anyone in his company because he didn’t want
to cause a problem. Lately, however, he had been criticized about the amount of product scrapped
before its expiration date. So he casually griped to the receiving clerk, who passed on the gripe to
the truck driver.
The truck driver, having been trained as a field listener, duly recorded the information he heard
and turned it over to the listening post at the pharmaceutical company. The listening post officially
informed the shipping department of the problem by initiating a corrective action request. She also
reported the comment to the person in charge of analyzing such comments.
That person discovered similar comments had been made and initiated a preventive action
request to review the packaging procedure. He informed the customer’s sales rep so she could tell
the customer the potential problem had been noted and action was being taken. He also updated
the listening post and the truck driver’s supervisor.1

REFERENCE

1. Adapted from The Certified Manager of Quality/Organizational Excellence Handbook, third edition, edited by Russell T.
Westcott (ASQ Quality Press, 2006).

26 I FEBRUARY 2006 I www.asq.org

and administrative resources are allocated accord-
ing to project needs. Nearly everyone in the firm is,
at one time or another, in contact with personnel in
client organizations.
Prior to implementing its ISO 9001 quality man-
agement system, the firm had no formal process for
gathering client data and, therefore, no formal way
to correlate data from multiple sources to evaluate
needs for preventive action. A loss of nearly $1 mil-
lion in revenue—due to data not reaching the firm’s
management in time for action—punctuated its
need for the LCALI process.
Now that the process has been implemented,
each project manager serves as a listening post
who accumulates and reports positive and nega-
tive data received from his or her assigned person-
nel, the field listeners. Even when an immediate
action is required, the listening posts funnel all
their CCRs through a CISC (one of the firm’s VPs)
who trends the data, reports on the trends and ini-
tiates preventive actions resulting from the quar-
terly management review.
A number of positive reports have even been fun-
neled through the system, enabling management to
provide an increased level of positive reinforcement
to the persons or project teams responsible for the
customers’ satisfaction.
For more examples, see sidebar “The LCALI
Process in Action.”
Why Bother?
There are myriad reasons it pays to know what’s
on your customers’ minds:
• Customer retention: Wouldn’t you like to
know and fix a developing situation before it
results in a lost customer?
• Customer satisfaction: Wouldn’t it be benefi-
cial to have a methodology for gathering and
processing customer feedback, a process that
will enable your organization to obtain and
retain a leading position in the marketplace?
And wouldn’t it be better to not have to rely
entirely on informal hearsay and surveys with
their low response rates?
• Employee satisfaction: Wouldn’t it be useful
to be able to directly reinforce your organiza-
tion’s customer focus through measurements,
feedback and positive reinforcement of your
responsible employees?
• Quality management system requirements:
Wouldn’t it be nice to implement, as part of ISO
9000’s preventive action requirement, a customer
data collection, analysis, measurement and
reporting process that fully meets the intent of
the standard?
• Cost avoidance: Wouldn’t it be a decided advan-
tage to know you have the best possible approach
to avoiding costly mistakes that could result from
failure to hear the voices of your customers?
The message is clear: Much can be done to
improve an organization’s ability to really listen to
the many voices of its customers. Make sure your
organization heeds the message.
REFERENCES
1. LCALI © 2001, R.T. Westcott & Associates.
2. Jan Carlzon, Moments of Truth, Harper Business, 1987.
3. Karl Albrecht, At America’s Service, Warner Books, 1992.
4. Earl Naumann, Creating Customer Value: The Path to
Sustainable Competitive Advantage, ASQ Quality Press, 1995.
5. Tom Peters, Thriving on Chaos, Alfred A. Knopf, 1988.
6. Naumann, Creating Customer Value, see reference 4.
RUSS WESTCOTT, president of R.T. Westcott & Associates,
Old Saybrook, CT, guides clients in strategic planning, imple-
menting and obtaining registration of quality management
systems, applying for Baldrige-type awards and applying
management concepts such as lean manufacturing and bench-
marking. He is a Fellow of ASQ, a certified quality auditor
and manager of quality/organizational excellence, a certified
manager of quality/organizational excellence refresher course
instructor and speaker on quality topics. Westcott is the editor
of the Certified Manager of Quality/Organizational Ex-
cellence Handbook, third edition (ASQ Quality Press,
2006).
Please
comment
If you would like to comment on this article,
please post your remarks on the Quality Progress
Discussion Board at www.asq.org, or e-mail
them to editor@asq.org.
QUALITY PROGRESS I FEBRUARY 2006 I 27