www.clear-point.net ©2006 incom strategic inc.1. ©2006 incom strategic inc.2 the take away: look...


The Take Away: Look at /act on your products through your customers’ The Take Away: Look at /act on your products through your customers’ eyes – don’t look at your customers through your products’ eyeseyes – don’t look at your customers through your products’ eyes

•At the strategic level VoC is more than customer satisfactionAt the strategic level VoC is more than customer satisfaction

•VoC should measure Customer Needs, Values and ExpectationsVoC should measure Customer Needs, Values and Expectations

•VoC should NOT be focused exclusively on product/service VoC should NOT be focused exclusively on product/service satisfactionsatisfaction

•If there is misalignment between customer expectations and If there is misalignment between customer expectations and product offerings, you will experience weaker customer product offerings, you will experience weaker customer commitmentcommitment

•VoC can identify the needs, Six Sigma can help improve the VoC can identify the needs, Six Sigma can help improve the alignmentalignment


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Voice of the Customer and Six Sigma

Voice of the Customer is about measuring the customers’ needs, values and expectations.

Used effectively, Six Sigma aligns/designs business processes with the Voice of the Customer.

The reward for alignment: long term customer commitment

The penalty for misalignment: short customer lifetime, increased churn, lower average revenue


Customer Customer Needs/Values/Expectations: Needs/Values/Expectations:

Asks the question what’s Asks the question what’s important to you?important to you?

The strategic bridge: how well The strategic bridge: how well are we doing at what’s are we doing at what’s important to you?important to you?

The strategic priority: close The strategic priority: close the gap between what’s the gap between what’s important to your customers important to your customers and your performanceand your performance

Customer Satisfaction: Customer Satisfaction:

Asks the question how do Asks the question how do you like me?you like me?

The strategic link: The strategic link: identifies the alignment identifies the alignment between customer needs between customer needs and product offeringand product offering

Alignment between Alignment between customer needs and customer needs and performance should drive performance should drive Six Sigma Project Six Sigma Project DefinitionDefinition


There is a hierarchy of Moments of TruthThere is a hierarchy of Moments of Truth

"Anytime a customer comes into contact with any aspect of a "Anytime a customer comes into contact with any aspect of a business, business, that is highly important and/or valued emotionallythat is highly important and/or valued emotionally, is , is simultaneously high risk/high return" simultaneously high risk/high return"

In terms of commitment, they are either moments of truth OR In terms of commitment, they are either moments of truth OR moments of misery.moments of misery.

Your organization’s ability to detect these moments perform Your organization’s ability to detect these moments perform against them determines truth or misery – commitment or against them determines truth or misery – commitment or defection.defection.

Examples:Examples:

-billing errors-billing errors

-statement errors-statement errors

-support errors-support errors


Moments of Truth:Moments of Truth:Jan Carlzon, the former president of Scandinavian Airlines wrote a book, Moments of Truth. In his book, Jan Carlzon, the former president of Scandinavian Airlines wrote a book, Moments of Truth. In his book, Carlzon defines the moment of truth in business as this:Carlzon defines the moment of truth in business as this:

"Anytime a customer comes into contact with any aspect of a business, however remote, is an opportunity "Anytime a customer comes into contact with any aspect of a business, however remote, is an opportunity to form an impression." to form an impression."

Some examples of moments of truth in Jan Carlzon's airline business are: Some examples of moments of truth in Jan Carlzon's airline business are:

•when you call to make a reservation to take a flight, when you call to make a reservation to take a flight,

•when you arrive at the airport and check your bags curbside, when you arrive at the airport and check your bags curbside,

•when you go inside and pick up your ticket at the ticket counter, when you go inside and pick up your ticket at the ticket counter,

•when you are greeted at the gate, when you are greeted at the gate,

•when you are taken care of by the flight attendants onboard the aircraft, and when you are taken care of by the flight attendants onboard the aircraft, and

•when you are greeted at your destination.when you are greeted at your destination.

The Key Issue: Your organization’s performance on Moments of Truth The Key Issue: Your organization’s performance on Moments of Truth drive your customers commitment.drive your customers commitment.


Moments of Virtue (MOV)Moments of Virtue (MOV)

Interactions that are highly Interactions that are highly valued by your customers valued by your customers AND your performance meets AND your performance meets or exceeds their expectations.or exceeds their expectations.

The reward: spike in The reward: spike in willingness to buy more.willingness to buy more.

Example: insurance claim Example: insurance claim processingprocessing

Moments of Misery (MOM)Moments of Misery (MOM)

Interactions that are highly Interactions that are highly valued by your customers valued by your customers AND your performance fails AND your performance fails to meet expectations and/or to meet expectations and/or creates frustration.creates frustration.

The penalty: customer The penalty: customer alienation, defection.alienation, defection.

Example: insurance claim Example: insurance claim processingprocessing


Shift and Drift are constants in today’s marketplace.Shift and Drift are constants in today’s marketplace.•Consumers, both b2b & b2c, are more open to new ways to meeting their needs•Technology, internet, increased information and the means to communicate are leading to more informed consumers •More informed consumers are leading to a greater willingness to exercise choice•Churn among customers is rising•The leading causes of churn? A single Moment of Misery!

Examples of Innovations Leading to a Shift in the Marketplace:

Advertising: Google vs. Yahoo

Automotive Retailing: BMW

Why should you measure in terms VoC/Customer Why should you measure in terms VoC/Customer Commitment?Commitment?


The Art: Who is the best at meeting the needs of customers?The Art: Who is the best at meeting the needs of customers?What needs are they meeting?What needs are they meeting?

Moments of Truth/Moments of Misery:Moments of Truth/Moments of Misery:What does the customer value?What does the customer need?How does your organization perform?Touchpoints: What are the ways your organization meets your customers values?-products/services-support-marketing-salesWho are your most profitable segments/populations?--how much of their needs are you meeting? -how much of their lifetime needs are you meeting?

The Science: Surveys and SegmentationThe Science: Surveys and SegmentationIf you could meet more of their needs for more of their life, you would be very profitable.If you could meet more of their needs for more of their life, you would be very profitable.How’s the alignment between your organization and your customers?How’s the alignment between your organization and your customers?

What should you measure VoC? – The Art and the What should you measure VoC? – The Art and the ScienceScience


Original Scenario:Original Scenario:•Toshiba laptop owners put a lot of value in their uptime with a computerToshiba laptop owners put a lot of value in their uptime with a computer•Hardware failures were a major Moment of MiseryHardware failures were a major Moment of Misery•Most customers experiencing hardware failures were losing access to their laptop for up to 11 Most customers experiencing hardware failures were losing access to their laptop for up to 11 daysdays•Most of the 11 days was consumed by the shipping/repair/shipping processMost of the 11 days was consumed by the shipping/repair/shipping process

Improved ScenarioImproved Scenario•UPS originally asked to reduce the shipping timesUPS originally asked to reduce the shipping times•UPS looked at the whole Moment of MiseryUPS looked at the whole Moment of Misery•Correctly identified that saving a few hours on the original pickup and the ultimate delivery would Correctly identified that saving a few hours on the original pickup and the ultimate delivery would bring marginal benefitsbring marginal benefits•Proposed a complete overhaul of the processProposed a complete overhaul of the process•In the U.S., qualified customers who experience a service failure now receive their repaired In the U.S., qualified customers who experience a service failure now receive their repaired laptop in 2 dayslaptop in 2 days•Toshiba customers drop their laptop at UPS stores, it gets shipped to a UPS repair centre off the Toshiba customers drop their laptop at UPS stores, it gets shipped to a UPS repair centre off the runway at UPS’s Worldport facility by 11 pm, repaired by 1 am, back on a plane by 2 am, back in runway at UPS’s Worldport facility by 11 pm, repaired by 1 am, back on a plane by 2 am, back in the UPS store by 8:30 am.the UPS store by 8:30 am.

Case: UPS of America and Toshiba LaptopsCase: UPS of America and Toshiba Laptops


Case: An energy company wants to leverage its brand Case: An energy company wants to leverage its brand and its relationship with customers by expanding its and its relationship with customers by expanding its service offering to home services.service offering to home services.

•What’s the best approach?What’s the best approach?

•What are the potential Moments of Truth?What are the potential Moments of Truth?

•What are the potential Moments of Misery?What are the potential Moments of Misery?

•How do you validate these?How do you validate these?

•How do you develop/align your current service offering How do you develop/align your current service offering with the customer needs (i.e. excellent performance on with the customer needs (i.e. excellent performance on the Moments of Truth)the Moments of Truth)


DMAIC: Where should you measure VoC?DMAIC: Where should you measure VoC?

•At the At the DefineDefine and/or Pre-Define Stage and/or Pre-Define Stage

•At the At the ImproveImprove Stage: Test Your Service Improvements Stage: Test Your Service Improvements

•At the At the ControlControl Stage: Be Sure Your Improvements are performing Stage: Be Sure Your Improvements are performing effectivelyeffectively

VoC: Shift and DriftVoC: Shift and Drift

•Whether you are in a B2C or B2B, the speed of shift and drift is Whether you are in a B2C or B2B, the speed of shift and drift is increasing at a rapid pace.increasing at a rapid pace.

•Customer needs and values are moving at a faster rate than ever Customer needs and values are moving at a faster rate than ever beforebefore

•Stay ahead of these changesStay ahead of these changes


Applying VoC to Six SigmaApplying VoC to Six Sigma

•The premise is that VoC defines the The premise is that VoC defines the Upper and Lower Spec limits for Upper and Lower Spec limits for services services

•Think of USL’s and LSL’s as two ends Think of USL’s and LSL’s as two ends of the customer commitment of the customer commitment continuumcontinuum

•The higher the customer commitment, The higher the customer commitment, the greater share of their wallet your the greater share of their wallet your organization will own; the lower the organization will own; the lower the commitment, the less you’ll own.commitment, the less you’ll own.

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The Take AwayThe Take Away

•While the Voice of the Customer (VoC) is critical to Six Sigma at the strategic, While the Voice of the Customer (VoC) is critical to Six Sigma at the strategic, project and design levels, its equally important that VoC is operationalized as project and design levels, its equally important that VoC is operationalized as more than customer satisfactionmore than customer satisfaction

•To use VoC strategically, you must look at your service offering through your To use VoC strategically, you must look at your service offering through your customers eyes. Do NOT look at your customers through your service offering’s customers eyes. Do NOT look at your customers through your service offering’s eyes.eyes.

•Your ultimate goal is to identify and meet more of your customers needs, more Your ultimate goal is to identify and meet more of your customers needs, more often and for a longer part of their lifetime.often and for a longer part of their lifetime.

•Your reward: significant improvement in customer lifetime revenue and Your reward: significant improvement in customer lifetime revenue and profitability because of customer commitment.profitability because of customer commitment.


Comments/Questions?Comments/Questions?

More info:More info:

www.clear-point.net

http://www.clear-point.net/

www.clear-point.net ©2006 incom strategic inc.1. ©2006 incom strategic inc.2 the take away: look...

Documents

customer expectations

customers commitment

customer alienation

customer satisfactionvoc

examples of moments

hierarchy of moments

moment of truth

weaker customer commitmentvoc