GROUP 6

NABILA SHAFIRA ANISSA PRADISTA A

(C1H017017) (C1H017019)

SALMA MEIDIANA SYARAFAH ADANI

(C1H017018) (C1H017020)

MUSTIKA MEIWEISYA
(C1H017021)

1
CHAPTER 7

CUSTOMER SATISFACTION,
RETENTION, AND LOYALTY
 An organization uses certain processes by which
it produces its products.

People who interact with the company prior to

these processes taking place have been
considered suppliers.

Those who interact with the company after these

UNDERSTANDING processes have produced the product have been
viewed as customers.
WHO IS A
CUSTOMER
In a total quality setting, quality is defined by
the customer.
The following points about customer-defined
quality:
- The customer must be the
organization’s top priority.
- Reliable customers (who buy
repeatedly from the same organization) are the
most important customers.
UNDERSTANDING
- Customer satisfaction is ensured by
producing high-quality products.
CUSTOMER-
DEFINED
QUALITY
 Internal External
Identifying the needs of internal
customers (employees) is done by
Speculate about results.
encouraging and facilitating
communication between them. Develop an information-gathering plan.

Gathering the information.

Quality circles
Analyze the results.

Self-managed teams Check the validity of your conclusions.

Improvements teams Take action as indicated.

IDENTIFY EXTERNAL AND INTERNAL CUSTOMER

NEEDS
 Communicating With Customers

Continual communication with customer Know your customer’s operation

is essential in a competitive marketplace.
Establishing effective mechanisms for
as supplier to other companies
facilitating communication and using
(customer). It’s important to know their
them are critical strategies in establishing
operatons. The more that is known about
a customer focus.
customer’s operation’s. The easier it will
be to provide products that meet its need.
Communicating with customers
 USING CUSTOMERS FEEDBACK TO MAKE DESIGN
IMPROVEMENTS
Quality Function Development And Design Improvement (QFD)

- QFD is a model for incorporating
customer input and feedback
into product development.
- QFD allows for: the systematic
incorporation of customer
needs, production capabilities
and capacity, and all other
relevant parameters into product
development.
QFD consists of the following basic activities:
1. Deployment of customer requirements (quality
needs).
2. Deployment of measurable quality
characteristics.
3. Integration of quality characteristics into the
product.
4. Assignment of numerical values to each quality
characteristics.
 Customer focus is part of a process that leads to
continual improvements in the organization that, in
turn, result in customer satisfaction.

Customer satisfaction process:

- Determine who your customer are.
- Tie of customer feedback in your processes.
- Develop a set of measurements that tell how
you are performing.
- Implement measurements at the lowest
possible level in the organizations
CUSTOMER
- Update customer input and feedback on a
continual basis.
SATISFACTION
PROCESS
 Customer-Defined value
The value of a product or service is the sum of a customer’s perceptions of the
following factors

Overall cost of the

The organization’s product or service
Service provided by image
the organization

Selling price of the

The organization’s product or service
Product or service personnel
quality
 Customer Retention

• Customer satisfaction is a fundamental cornerstone of total quality. An organization

develops a customer focus to be better able to satisfy its customers. Consequently,
forward looking organizations use customer satisfaction data to measure success.
But measuring customer satisfaction alone is not enough. Another important
measure of success is customer retention. Customer retention is a more accurate
indicator of customer loyalty than is customer satisfaction.
• Customer satisfaction is not always a customer retained.

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 - Customer retention is the activity that a selling
organization undertakes in order to reduce
customer defections. Successful customer
retention starts with the first contact an
organization has with a customer and
continues throughout the entire lifetime of a
relationship.
- Customer retention is more than giving the
customer what they expect, it’s about
exceeding their expectations. So they can be
CUSTOMER more loyalty.
- To retain customers over the long-term,
RETENTION organization must turn them into partners and
proactively seek their input rather than waiting
for and reacting to feedback provided after a
problem has occurred.
 Companies that have successfully established a
customer focus share a number of common
characteristics:
1. Vision, commitment, and climate.
2. Alignment with customers.
3. Willingness to find and eliminate customers’
Establishing a problems.

customer focus 4. Use of customer information.

5. Reaching out to customers.
6. Competence, capability, and empowerment.
7. Continual improvement of products and
prfocesses.
 RECOGNIZING THE CUSTOMER-DRIVEN ORGANIZATION

Reliability an organization that dependably delivers

1 what is promised on time every time

Assurance an organization that is able to generate and

2 convey trust and confidence.
Characteristics of
Tangible an organization that pays attention to the
customer-driven 3 details in all aspects of its operations.
organization:
Empathy an organization that conveys a real interest
4 in its customers.

Responsiveness an organization that is willingly

5
atentive to customer needs.
 Customer Loyalty

• Organization attempt to consistently exceed customer expectation for the purpose of

creating and maintaining customer loyalty.
• Customer loyalty is all about attracting the right customer, getting them to buy, buy
often, buy in higher quaantities and bring you even more customer.
• Companies work hard to build customer loyalty.
• Loyal customer is a customer forever.
CUSTOMER LOYALTY MODEL

Business Performance

Global Perceptions

Loyalty Behaviors

Financial Outcomes
 CRITICAL THINKING
“I’ll stick with you through thick and
thin,” or “What have you done for me lately?”
Which best describes the attitude of customers in
today’s marketplace? Two quality managers are
debating the concept of customer loyalty. One of
them, Jack Hayes, claims that customer loyalty
does exist, that it can be won, and that winning a
Yes. I’m loyal.
customer’s loyalty should be every organization’s
goal. According to Jack, “If you have a history of I think 2-3 bad experiences because if more than that, our trust in the
organization diminshes.
satisfying a customer, he will be loyal enough to
overlook an occasional bad experience.” No, because I lost your belief
“No way,” says Anna Cage. “It takes
only one bad experience to lose a customer.”
Join this debate. You are a customer.
Are you loyal to any organizations? If so, how
many bad experiences will it take to overcome your
loyalty? Have you ever decided to withhold your
business from a store, restaurant, or other service
provider based on poor service? Do you usually
give an organization more than one chance to win
your business, or is one bad experience all it takes
to turn you off?
“You know you have hit the big time when the purple-
andorange-lettered Federal Express (FedEx) truck driven by a
smiling courier pulls into your driveway or walks up your
stairwell and hands you the purple-and-orange envelope.
First off, it’s always a blessed relief to get what’s inside, because
it absolutely, positively had to get there.”
“Fred Smith, a 20-year-old sophomore at Yale University,
understood this characteristic of American culture when he
thought up his topic for his business class project. We all know
the legend, how he wrote a term paper describing his idea for
overnight delivery of documents anywhere in the country by
means of a fleet of airplanes flying to a hub system converging DISCUSSION
on Memphis of all places. Fred got a C on the paper, and most of
his buddies thought he was lucky. But it took more than full faith
in a sophomore’s brainchild to make FedEx what it is today. The
ASSIGNMENT 1
company serves one of the most important aspects of
Americanculture and business: the need for a NOW response.
And FedEx knows that the only thing it has to sell is NOW—
without fail.”

Americans have developed what
has been called a
“microwave mentality.” We
like quick service, instant
food, and fast results. Does
this describe you as a
customer?
The microwave mentality, like many other, describes
me as a customer. There’s an urge in human
pyschology to get things instantly. They want their
desires to be fulfilled as soon as possible. This urge
to get things instantly has identified by companies
and they utilize it in their business models. These
companies understand that this is one of the factors
in the customer’s defined quality.
For example in different restaurants and departmental
store, there are self service counters. This has
resulted for the businesses to satisfy their customers
as well save money of sales assistants on the
checkouts.

What American companies
besides Federal Express base
their success on NOW service?
Amazon is a prime example of a company that has
based their services on now concept. They have been
spending enormous amoount of finance to ensure that
their customer get their product on “the same day”.
According to amazon webite there are no extra
charges for same day service. This mean that there
are financial reparations on providing this services.
But, I thing this would increase their customer base
rapidly as everyone want everything “now”.
Perhaps the most famous case illustrating the enormous
cost of winning back lost customers is that of the
“Tylenol Murders.” Seven people in the Chicago area died
suddenly after taking Tylenol capsules. An investigation
revealed that the capsules had been laced with cyanide, a
deadly poison. When the story ran on the nightly news
programs, a nationwide panic ensued that caused
Tylenol’s sales to plummet overnight. Many business
analysts predicted that Tylenol’s manufacturer, Johnson
& Johnson, would not survive the tragedy. Johnson &
Johnson surprised the analysts by undertaking one of DISCUSSION
the most successful campaigns in history to win back
customers. It worked, but the cost was huge. This case ASSIGNMENT 2
led not just Johnson & Johnson but also all major drug
manufacturers to develop the tamperproof bottle. Having
done so, Johnson & Johnson undertook an intensive
public relations campaign to win back the trust of its
customers.

If the Tylenol incident were
to happen today and you were
a user of Tylenol, would
Johnson & Johnson be able to
win back your trust?
I think that if the whole incident with Tylenol happened
today, I would not be able to gain their trust back.
Many things are different now than they were back
when the incident with Tylenol made by Johnson &
Johnson occurred. As to why I would not be able to
gain their trust back is simple. They let such a costly
mistake occur that ended up killing people, which I
would not be able to shake. We buy medicine to help
ourselves manage pain and other symptoms, and the
addition of cyanide into Tylenol is unforgivable. I
would not be able to fully guarantee that Johnson &
Johnson avoids future mistakes like this. If I cannot
fully trust a company that is manufacturing medicine
that could potentially kill me, or alter my body, I would
never do so. I would turn to a company that has more
thorough processes, and a better management
system that would not allow for these mishaps. Even
though they totally revolutionized the caps to the
medicine bottles, I would not be able to forget the
situation at hand.
 What would it take for
Johnson & Johnson to win Undertook an intensive public relations campaign and
back give more detail explanations to win back the trust of
your trust if one of the customer.
victims was a friend of
yours?
Thank You