Implementation of a customer satisfaction program: a case study

Citation

(2002), "Implementation of a customer satisfaction program: a case study", Measuring Business Excellence, Vol. 6 No. 4. https://doi.org/10.1108/mbe.2002.26706dab.003

Implementation of a customer satisfaction program: a case study

Under the management philosophy of total quality management (TQM), business operation is mainly guided by its pursuance in quality improvement and promoting customer satisfaction (CS). The importance of CS has received widespread recognition from many corporations but those still not implementing it are put off due to lack of experience, and those that have implemented CS are worried that they cannot continue with it. How to resolve these two problems has become a top priority to many enterprises.

This study takes a detailed look at the experience of a large Taiwanese multi-product manufacturing company to understand the necessary steps taken in implementing and carrying through CS. The result of the implementation is discussed in order to understand how this corporation begins CS through "pilot phase" and "promotion phase". In addition, we examine the actual steps of carrying out annual business goals in the "stable phase" to better understand how the case-in-study continues to improve its CS image.

Background of the case-in-study

Founded in 1962, the case-in-study began with manufacturing household electric appliances and has advanced to a multi-product manufacturer covering living electric appliances, system equipment and product components for industry. It has six manufacturing division companies and three sales division companies that also handle technical supports. The company has always believed in the quality philosophy of "CS No. 1" to constantly improve its quality objective on products and service. In 1996, the company was honored with a national quality award, which established its corporate image with outstanding quality.

Set up of CS implementation center and bureau

In 1993, after a resolution on promoting corporate CS image was reached in an executive meeting, a competent senior officer was immediately appointed by the president to head up as the director of the CS implementation center. In the next 15 months, the center went through both pilot phase and promotion phase. Other than evaluating corporate constitution, set company goals and complete corporate operation systems during these two phases, fliers, publications, and evaluation standards and methods were also set up. Simultaneously, mutual understandings were set up between business divisions to set the foundation for implementing CS throughout the entire corporation. The actual implementation could be described as follows:

1. 1.

   Pilot phase:

2. 2.
   • •

     collect all relevant publications on CS and attend CS seminars and workshops to gather more information;

   • •

     invite Japanese consultants to perform corporate diagnosis so that any possible problems that may occur from CS implementation could be recognized beforehand;

   • •

     make presentations to top executives and directors of each business division on the importance of CS, its effect, benefits, and problems that may arise in the future to build division directors' knowledge and interest in CS implementation;

   • •

     draft CS philosophy, vision, directions and common goals that are unique to the corporation;

   • •

     conduct CS implementation seminars throughout the corporation so that all employees understand the meaning, objective and principles of CS.

3. 3.

   Promotion phase:

4. 4.
   • •

     To make it known throughout the corporation, the president makes a resolution in the corporate annual meeting on his determination to follow through with CS implementation.

   • •

     Design and post all kinds of billboards, posters, fliers, and wear tags on uniforms to remind employees of the importance of CS implementation and to enforce the improvement consciousness of all employees.

   • •

     After center briefs on CS evaluation system and comments from each business division, design CS internal and external survey systems and self-evaluation systems for each business division to be used as criteria in scoring CS contests.

   • •

     Examine any divisions, business, and information relevant to CS within the corporation to centralize all CS-related responsibilities and set standards in business coordination, so as to avoid manpower wasted in handling these responsibilities separately in the future.

   • •

     Each business division to set up its own implementation bureau, responsible in all CS matters related to the division. In addition, a CS implementation committee is formed along with the CS implementation center to move forward the CS business and goals of the corporation.

   • •

     Conduct CS operation meetings to set report formats, track methods and dates of annual CS implementation plans.

   • •

     Motion was passed by CS implementation committee to set up employee participation system (CS quality comment cards) to ensure that all employees continue improving the goals set in improving corporate CS image.

The framework for stable phase

After the set-up of the CS implementation center and implementation committee, the case-in-study has undergone several changes in its CS implementation structure due to an accumulation of experience and changes in the business environment. In the process of structural changes, CS has moved on to the mature phase and to the current stable phase. Changes in each phase hint that the corporation has successfully moved along in its CS implementation. It also indicates that consciousness of CS has been deeply ingrained in all employees.

Annual CS implementation steps during the stable phase

In the structure framework of the stable phase, annual CS businesses are jointly handled by the CS implementation center and the implementation bureau of each business division. The CS implementation center is responsible for the following four principal businesses:

1. 1.

   Make training programs and promotion activities more lively and interesting.

2. 2.

   Survey the voices of external customers (market) and internal employees to use as the basis in evaluating each business division.

3. 3.

   Conduct CS operation meetings and CS implementation committee meetings to track the completion level of proposed agendas.

4. 4.

   Propose and follow through with annual "CS emphasized agendas".

As a whole, the corporation has the following 20 annual business agendas. These 20 items are CS foundations the case-in-study needs to continue improving its corporate CS image. These steps are implemented in the following order. It is also called "annual CS implementation steps":

1. 1.

   Announce annual directions and goals in the CS operation meetings.

2. 2.

   Announce the implementation key subjects of each business division in the CS implementation committee.

3. 3.

   Announce key businesses of each division in internal business division meetings.

4. 4.

   CS implementation center to publish CS annual operations manual.

5. 5.

   CS implementation center to promote obedience in basic rule manual.

6. 6.

   CS implementation committee to design promotion materials, billboards, and posters for the company and business divisions.

7. 7.

   CS promotion teams of each business division unit to urge all employees to fill out CS quality comment cards.

8. 8.

   CS implementation bureau of each business division to introduce implementation activities of its business division to all employees.

9. 9.

   CS implementation committee to evaluate each and every product operation manual.

10. 10.

    CS implementation committee to conduct circuit interviews and hold conferences.

11. 11.

    CS implementation center to conduct annual market survey.

12. 12.

    CS implementation committee to plan "TOP inspection" for each business division every month.

13. 13.

    CS implementation committee to conduct work satisfaction survey on all corporate employees.

14. 14.

    CS implementation committee to track how dissatisfying items are handled from CS survey questionnaires.

15. 15.

    CS implementation committee to sponsor "quality enhancement programs" that are part of national quality award.

16. 16.

    CS implementation center to evaluate implementation results of each business division.

17. 17.

    To report annual implementation status in CS operation meeting.

18. 18.

    CS implementation committee to reward best proposals given in quality comment cards.

19. 19.

    CS implementation center to analyze the comments from product users.

20. 20.

    CS implementation center to publish articles on successful stories in CS implementation.

Implementation results

In the nine years since the beginning of the "pilot phase" in 1993 until the "stable phase" right now, the annual customer satisfaction index (CSI) has been up and down in each category, but the overall index was consistently up in the first three years and peaked in 1995. After 1996, annual CS index numbers fluctuated as the result of too much fluctuation in some of the categories. However, it is worthwhile to note that after 1996, annual customer dissatisfaction index (CDSI) has never reached over 13 per cent from distributors and 7.5 per cent from customers. It is evident that implementing CS could effectively reduce customer complaints.

Discussion

After nine years of implementation, the case-in-study has developed its own unique CS model. However, it is impossible to have other manufacturers adapt the same model due to differences in business type and size, small to medium businesses especially, since they are limited by human and financial resources. For corporations wanting to implement CS, grasping the case-in-study's physical steps taken and key factors would serve as a valuable reference.

Combining the case-in-study results and scholar's point of view, the following 15 key factors should be considered to achieve successful CS implementation:

1. 1.

   Have full support of the top management.

2. 2.

   Set clear corporate CS philosophy, vision and goals.

3. 3.

   Understand corporate constitution and its problems.

4. 4.

   Set up CS implementation standards and centralize responsibilities.

5. 5.

   Encourage and train all employees to take CS seriously.

6. 6.

   Understand what pleases internal and external customers via market survey and internal questionnaires.

7. 7.

   Ensure uniqueness and quality of product or service.

8. 8.

   Design work and work flows to please customers.

9. 9.

   Let customers gain the most satisfaction with the least total cost.

10. 10.

    Set plans and evaluation systems.

11. 11.

    Monitor results from each procedure.

12. 12.

    Encourage continuous improvement.

13. 13.

    Learn from benchmarking.

14. 14.

    Ensure continuous improvement.

15. 15.

    Overall achievement in obtaining customer satisfaction.

Managerial implications

Being friendly to the customer is not enough; the company should make money on customer satisfaction. This research presents a CS implementation program from studying the success model of the case-in-study and its physical implementation steps. The results show that the CS has a positive impact on sales and overall growth. A direct effect is from those complaint or cost reductions. For example, satisfied customers are less likely to call product repairs, i.e. operating costs decrease when the customer is satisfied. On the other hand, we found that the increase of the CS will lead to an improvement of business results. However, when satisfaction has reached a certain level, further improvement of business results seems to be non-significant. Therefore, once the CS has reached a good position, the enterprise should concentrate its efforts on loyalty.

In the TQM environment of the case-in-study, the employee on the process is trained to think of the customer as the next person on the process. For example, quality comment cards are utilized to increase expectations and reduce customer complaints. The job is not done until the customer is satisfied. On the basis of this study, we can see that effective CS implementation can make the company's vision and goal be set and successfully executed; in addition, employees' quality awareness and skills for continuous improvement can be enhanced and the company's competitive advantage can be sustained.

Other than used as basic principles for manufacture, the proposed implementation framework would also allow manufacturing companies to understand the physical implementation steps of CS, and each of the basic functions required. In turn, few or no mistakes will occur and they will thus achieve the goal of successful CS implementation. Hopefully this framework could be applied in several manufacturing companies to develop specific implementation steps and businesses for each manufacturer according to this framework.

This is a shortened version of the article "Implementation of a customer satisfaction program: a case study".

Te-King, Chien, Chin-Ho, Su and Chao-Ton, Su (2002), "Implementation of a customer satisfaction program: a case study", Industrial Management & Data Systems, Vol. 102 No. 5, pp. 252-9.