PROCESS IMPROVEMENTS THAT BUILD CUSTOMER SATISFACTION A Thesis Presented To the Faculty of California State University Dominquez Hills

In Partial Fulfillment of the Requirements for the Degree Master of Science In Quality Assurance by Lawrence Jeffries Fall 2010

Copyright by Lawrence Jeffries 2010 All Rights Reserved

THESIS: PROCESS IMPROVEMENTS THAT BUILD CUSTOMER SATISFACTION AUTHOR: LAWRENCE JEFFRIES

APPROVED:

Committee Chair

Committee Member

Committee Member

TABLE OF CONTENTS

PAGE COPYRIGHT PAGE...................................................................................................................... ii APPROVAL PAGE....................................................................................................................... iii TABLE OF CONTENTS............................................................................................................... iv LIST OF TABLES......................................................................................................................... vi LIST OF FIGURES.......................................................................................................................vii ABSTRACT................................................................................................................................ viii CHAPTER 1.INTRODUCTION....................................................................................................................... 1 Background........................................................................................................................... 1 Problem Statement................................................................................................................ 4 Purpose of Study................................................................................................................... 6 Theoretical Bases and Organization..................................................................................... 7 Limitations of the Study...................................................................................................... 10 Definition of Terms............................................................................................................. 10 2.REVIEW OF LITERATURE.................................................................................................... 12 Customer Experience........................................................................................................... 12 Quality Function Deployment............................................................................................. 12 Voice of Customer............................................................................................................... 13 Kano.................................................................................................................................... 14 Kansei.................................................................................................................................. 15 Six Sigma............................................................................................................................ 16

3.METHODOLOGY.................................................................................................................... 17 Six Sigma............................................................................................................................. 17

PAGE Kaizen.................................................................................................................................. 19 Quality Function Deployment.............................................................................................. 21 Voice of Customer............................................................................................................... 21 Kano..................................................................................................................................... 21 Kansei................................................................................................................................... 22 4.RESULTS.................................................................................................................................. 25 5.SUMMARY............................................................................................................................... 30 REFERENCES............................................................................................................................. 32 APPENDICES.............................................................................................................................. 36 A: Kano Questionnaire..................................................................................................... 37 B: Employee Questionnaire............................................................................................. 39

LIST OF TABLES PAGE 1: Voice of customer ............................................................................................................. 13 2: Six Sigma........................................................................................................................... 18 3: Kansei................................................................................................................................ 22 4: Department Model Results................................................................................................ 23 5: Process Model Results....................................................................................................... 28

LIST OF FIGURES PAGE

1: Department model................................................................................................................. 02 2: Process model........................................................................................................................ 20 3: Department model results...................................................................................................... 23 4: Process model results............................................................................................................. 29 5: Department model vs procees model results.......................................................................... 29

ABSTRACT National Accounts is a customer service organization the employee turnover rate is skyrocketing, customer satisfaction is falling, and revenue is crumbling. The current training system, management style, and bottleneck processes are the anchors for losing both employee and customer satisfaction. Connecting emotionally with customers requires an organization to create a cohesive, authentic and sensory-stimulating total customer experience that resonates, enhances, communicates effectively and differentiates the organization from the competition. This paper takes a snapshot of business process improvements and quality tools that build both customer and employee satisfaction in a call center environment. QFD, KANO, KANSEI, SIX SIGMA, and Process Model quality tools are deployed to reduce employee turnover, refine personnel training, and spark customer satisfaction through process improvements. This thesis illustrates the significance of quality tools yielding dividends by boosting both employee and customer satisfaction. Gaining competitive edge in the market requires innovative strategies that implement quality tools.

CHAPTER 1 INTRODUCTION Background National Accounts is a leader in the Heating, Ventilation, Air Conditioning (HVAC) industry, providing sales, service and support for commercial customers. What separates National Accounts from all of its competitors is Energy Management Service (EMS). The company saves customers substantial expenses from needless power consumption. Specifically, the organization monitors and controls heating, cooling, and lighting usage for every customer. Customers for National Accounts span over 50 major retailers nationwide for thousands of stores including Kmart, Petco, Shopko, Garden Ridge, Marsh, and Steak-n-Shake. For example, National Accounts controls when the store lighting is both activated, deactivated, and the specific temperature levels inside the store both during business hours and overnight. The store manager cannot simply flip a switch to turn on their interior and exterior lighting, or their HVAC systems. These systems are remotely controlled by National Accounts. When problems arise, customers contact the call center of National Accounts for any necessary adjustments and immediate action is then taken by the customer service representative to resolve the issue.

New employees decide in the first weeks of their employment whether they have a future with the company. The new hires quickly identify whether or not they fit into the corporate culture, indentify value in their position, advancement opportunities and job security. Further, new employees gauge management support when problems arise. When employees receive systematic orientations, they become more committed to their jobs, their colleagues, Supervisors, and the company. In 2008, National Accounts hired a total of 49 new employees as call center

representatives and a total of 31 of those employees resigned within the year. National Accounts implements the departmental approach to meet their goals. Departmental lines include Energy Management Service, National Accounts, and Alarms department. This structure is inefficient and costly. The focus is typically on whose fault it is not on how the customer can be satisfied. Customer needs are not met by departments but by processes that cut across departmental lines.

Inbound Calls

EMS

Nat. Acc.

Alarms

Call Complete

Outbound Calls

Figure 1. Department model for customer service.

The Departmental Model implemented by National Accounts 1. Customers call inbound for HVAC service. 2. The Call is directed to either the EMS department or National Accounts department. 3. The EMS department handles all troubleshooting/technical support and National Accounts handles basic account services. National Accounts transfers any call that needs troubleshooting service over to EMS. 4. The Alarms department simply conducts outbound calls for refrigeration service. 5. The EMS department typically receives 1,000 calls per day; National Accounts typically receives 500 calls per day; and the Alarms department typically calls out 600 alarms per day. 6. Call congestion for the EMS department creates lengthy customer wait time, while the National Accounts and Alarms departments sit idly. National Accounts waits for inbound calls while Alarms waits to call out. 7. On average, EMS customer call wait time has a median of ten minutes, and a range between seven to thirteen minutes. 8. This departmental model creates friction, stress, frustration with the job and impacts EMS employee performance. Overall, both employee and customer satisfaction are damaged and revenue is lost.

Customers demand faster, less expensive and hassle-free services. Companies often target angles of market differentiation by price, product and service. This customer service strategy is out-dated and yields diminished returns. There is a decline in the level of respect given to customers and their experiences. Successful firms are making a concerted effort to develop closer ties to their customers (Reis, et al, 2003). As a result, many organizations are paying increasing attention to improve service quality. Great organizations establish strong emotional connections with their customers. Emotional connectivity with customers empowers a business, elevating a brand beyond price and features to a higher level of meaning and commitment for customers. Connecting emotionally with customers requires an organization to create a cohesive, authentic and sensory-stimulating total customer experience that resonates, pleases, communicates effectively and differentiates the organization from the competition (Berry, & Carbone, 2007).

According to Millard (2006), 85% of business leaders said that differentiation by price, product and service is no longer a sustainable business strategy. Further, 71% of these leaders also stated that they believed customer experience is the new battleground. The same survey found that 44% of customer experiences to be bland and uneventful. Yet, only 15% of companies are actually starting to engage customers on both an efficient and emotionally engaging manner. Most employees in the National Accounts call center do not have extensive training in HVAC or in the systems that control Energy Management. New hires receive formal training that cover the basics of these systems and the remaining training is learned on the job. The lack of know-how and limited training, combined with over 1,000 calls received a day at the call

center creates frustration, lack of motivation, and personal satisfaction with the job. As a result, employee turnover rate is extremely high.

The company averages three employees a month who voluntarily terminate their employment and average two employees per month who are terminated for poor performance. The organization has a revolving door of new hires, resignations and terminations. Corporate moral is consistently low, employees feel overworked, underpaid, and unappreciated. Ironically, these customer service representatives are the point of contact for every customer and are the company to these customers.

The customer service is divided across departmental lines. These departments include National Accounts, Energy Management Service, and Alarm. The National Accounts department receives inbound calls from a specific set of customers, the Energy Management Service receives inbound calls from a different set of customers, and the Alarm department processes outbound refrigeration alarms. These departments coexist alongside the others and are in operation 365 days a year and 24 hours a day. This departmental structure creates bottlenecks that result in customers waiting at length before a customer service representative can answer their call. A customer may be forced to wait more than five minutes before answered and then may be transferred to a different department, only to be forced to wait again. Consequently, the caller waiting time and disgruntled service representative create an unsatisfactory customer experience. Employees should be given the opportunity to participate in the project that will be the result of all the above mentioned efforts at all innovation areas (Tonnessen, 2005). The call center representatives share a common complaint regarding lack of professionalism among the management. Supervisors routinely scold employees in front of

others in the department, show favoritism, and do not lead by example. This perception negatively impacts the New Hires decision about the company. Further, the apparent disarray in the call center department creates friction that is directly linked to the lack of management, and New Hires are often skeptical about their sense of belonging. National Accounts has traditionally imposed a top-down bureaucratic leadership structure. Formal guidelines, stiff command structure, and delegated tasks circulate through the corporate environment. Teamwork is missing in action: bright ideas and innovative market strategy appear to only flow from those in charge and no other voices ring loud and clear. Customers typically call inbound to request service. The customer is greeted by a service representative who takes the order, processes the information, and completes the transaction. Overall, a stale rigid atmosphere hovers over the lifecycle transaction process.

The traditional orientation process is inadequate, new employees quickly become frustrated, stressed, and leave the company within a short period of time. Specifically, new hires are given a tour of the facility, provided documentation, and listen in on calls received by technicians. The new employees sit and listen, watch as the technician handles a customer, and expected to catch on. After three weeks of this observation, the new hires are on the phone handling customers and complicated technology that most had never experienced. The new employees are expected to simply ask questions when they are unsure of what to do. However, when questions surface, most other technicians are on the phone handling a customer, do not want to be bothered, or are simply disinterested. As a result, the new employee has to wait for someone to ask questions to, while the customer remains on the line. As a result, both the new hires and the customers routinely experience dissatisfaction with the process. With the call volume being over 1,000 calls in a given day, and less than twelve technicians to handle each

call the new employees quickly feel overwhelmed, incompetent, and aggravated with their jobs, supervisors, and colleagues.

Problem Statement

Under the department model, customer complaints revolve around caller wait time, complex process, and abrasive attitudes from the company representatives. On the other hand, the process model improves customer satisfaction in terms of reduced caller wait time, ease of process transaction, and healthy attitude of corporate representatives. Finally, this thesis will illustrate that the process model is superior over the department model in gaining customer satisfaction.

Purpose of Study

When consumers switch service providers, they will incur various costs ranging from the time spent in gathering information about potential alternatives to the benefits forfeited due to termination of the existing service. Organizations traditionally strive to capture consumer satisfaction. However, the experience of the customer is often overlooked as businesses look at market share, profits, and competitive edge. Connecting emotionally with customers requires an organization to create a cohesive, authentic and sensory-stimulating total customer experience that resonates, enhances, communicates effectively and differentiates the organization from the competition (Jones & Sasser, 1995). Market leading companies develop innovative strategies that solicit customer feedback. When customers share in the service process, feel valued, and that their voices count, then customer satisfaction is elevated. However, when customers feel left out of the process, that their

voices are not heard, and that their concerns do not matter, then consumer satisfaction, loyalty, and advocacy fall flat. The implication is that companies which start to leverage the power of emotion in the decision-making process, and leverage that power to improve the customer experience are likely to succeed in an increasingly commoditized market. Specifically, how to improve the customer experience is a visible objective. The refreshing customer "experience" is generated throughout the customer service lifecycle.

Customer service representatives reflect the corporate standards. When customers call for service, the company representative is the company. Employees are the most valuable resource for gaining, obtaining, and sustaining long-term customer satisfaction. An organization cannot manage customers' emotions, but it can manage the clues embedded in customers' experiences with the organization that trigger their emotions. Those emotions consciously and unconsciously influence attitudes that drive behavior. Experience quality management requires consistently delivering the right feeling through an array of clues that create the experience. Most U.S. companies have implemented a series of structural and process design changes to remain globally competitive. Maintaining a competitive edge requires businesses to redesign processes to increase the speed of production throughput by improving the efficiency of procuring, producing and delivering finished products to customers (Miscikowski, & Stein, 2006). Theoretical Bases and Organization This thesis addresses the significance of both employee and customer satisfaction surveys. Employee and customer satisfaction surveys are valuable data collection tools for identifying hidden trends, satisfactions, dissatisfactions, and growth opportunities. First,

employee questionnaires yield dividends in terms of identifying their level of satisfaction and/or dissatisfaction with their duties, resources, and stability within the organization. Second, customer satisfaction surveys shed light on company performance in terms of meeting and exceeding the expectations of consumers. When customers feel that they are actively involved in the process and that the company is concerned about their needs, then customers develop loyalty and potentially become advocates for the business products and services. Finally, smart companies generate surveys that target both employee and customer satisfactions, gauge current performance levels, and develop strategies to excel above and beyond the competition. When employees are disgruntled and a high turnover rate exists then a strong positive correlation exists with customers feeling the tension and bailing out. With employee and customer surveys, companies can measure levels of satisfaction, identify problems, and deploy solutions. According to Wiley (1990), healthy customer satisfaction, positive employee attitudes, and strong organizational performance consistently showed positive relationships with organizational performance measures. In addition, employee perceptions of an organization's "culture for success" showed substantial relationships to customer satisfaction. Culture for success was measured by such items as: "adequate resources are provided for developing the technology of my business unit's future products", "My business unit plans future product and service offerings based on customer needs", and "My business unit's products and services are competitive in the marketplace". Another employee attitude dimension highly related to measures of customer satisfaction was personal responsibility, which included such items as "Commitment to helping my business units succeed" and "I protect the company's property and business information as if it were my own".

In another study of relationships between organizational performance, customer satisfaction, and employee attitudes, Wiley (1990) studied data from over 200 retail stores. He found that, overall, those stores most favorably described by employees were those most favorably described by customers. In particular, customer satisfaction ratings were strongly and positively related to employees' descriptions of key aspects of their working environment, especially working conditions, minimum obstacles to accomplishing their work, and a strong sense that supervisors and co-workers stress customer service. A number of employee attitude dimensions were related to customer satisfaction. One such employee attitudinal dimension was effective communication, which included items such as "my work group is told about upcoming changes in time to prepare for them" and "I get enough information about how well my work group is meeting its goals". Another attitudinal dimension was supervisory practices, which included items such as "My supervisor/manager makes it clear what I am expected to do".

In a sample of 30 banks, Paradise-Tornow (1990) examined relationships between employee perceptions of management leadership and measures of financial performance and efficiency. The measures of managerial behavior were tied to a leadership/management model which focused on behaviors believed to be important in establishing a competitive sales and service-oriented culture. Such a culture should be a foundation for maintaining high organizational performance. Managers (bank presidents in this case) were responsible for the management culture in the organization. The management role included setting standards and expectations and providing feedback, evaluation and coaching. Effective communication was part of the management culture. Employee-attitude items reflecting communication included: "manager effectively communicates rationale for our goals", "manager regularly requests input when making decisions/solving problems"; and "manager provides clear expectations/standards

10

regarding quality service". Communication was strongly positively related to productivity (the ratio of revenue divided by personnel expense). Overall, the study found that leadership factors of communication downwards, sales goals and teamwork showed the strongest relationships to organizational efficiency measures. The research suggested that leaders have control over achieving objectives because they take customer requirements into consideration. Limitations of the Study

The limits of this study include the absence of gathering exit data from employees who leave the company. Many employees who either resigned or were terminated held valuable data about the organization in how it can be improved. In addition, data collection for how the employee turnover rate affects the remaining employees perceptions of their security within the company is a limit of this study. Finally, research is progressive with innovative tools, techniques, and results that outdates past research conclusions. This current study may become refined in time with current research. A longitudinal study is void at this time for assessing where the company is currently at in terms of employee and customer satisfaction levels. In addition, the employee and customer satisfaction strategies outlined in this thesis where deployed at a single call center environment, and in order to strengthen both the validity and reliability of this research the methodology needs implemented in multiple call center environments. Definition of Terms EMS: Energy Management Services. This system controls HVAC for optimum output levels to reduce overall power consumption and save business expense.

HVAC: Heating Ventilation Air Conditioning.

11

Kano: According to Discovering the Kano Model (2010), Kano illustrates that all needs are not created equal, and the resolution of all needs does not have the same impact on customer satisfaction or a performance report. Three types of needs are identified in this model: basic needs, satisfiers, and delighters. Kansei: is a method for translating feelings and impressions into product parameters, invented in the 1970s by Professor Mitsuo Nagamachi (Dean of Hiroshima International University). Kansei Engineering can "measure" the feelings and shows the relationship to certain product properties. In consequence, products can be designed to bring forward the intended feeling (Nagamachi, 2010).

QFD: Quality Function Deployment is a method to transform user demands into design quality, to deploy the functions forming quality, and to deploy methods for achieving the design quality into subsystems and component parts, and ultimately to specific elements of the manufacturing process (Akao, 1994).

Six Sigma: Is a process improvement strategy that implements statistical analytical tools, project control techniques, reporting methods, and management techniques that combine to form breakthrough improvements in problem solving and business performance (Pyzdek, 2003). VOC: The Voice of the Customer is a market research technique that produces a detailed set of customer wants and needs, organized into a hierarchical structure, and then prioritized in terms of relative importance and satisfaction with current alternatives (Ernam, 2010).

12

CHAPTER 2 REVIEW OF LITERATURE Customer Experience According to Berry & Carbone (2007), an experience is inherent a positive experience is not. Customers consciously and unconsciously filter a barrage of clues, in the form of experiences, and organize them into sets of impressions-some rational and others more emotional. Anything perceived or sensed, or conspicuous in its absence is an experience clue. If customers can see, smell, taste or hear it, it is a clue. Goods and services provide clues, as does the physical environment in which they are offered.

Quality Function Deployment

According to Gonzalez, et al, (2003), QFD meets the needs of customers with design, development, and deployment of solutions for both manufacturing and service environments. QFD aligns the entire company towards a common goal. This strategy empowers organizations to exceed expectations and value by understanding customer requirement, psychology of the organization, adding value, developing a customer satisfaction system, and generating innovative strategies. This methodology can be implemented for both tangible and in-tangible products and services. QFD compelling reasons include identifying the voice of the customer, how the customer can be satisfied, and what is needed to satisfy the customer. First, understanding the needs of the customer is the most important component identifying what the customer demands is the backbone of QFD. Second, pinpointing on how to satisfy the customer need is the next step.

13

Gathering the necessary QFD tools for the task is inherently required. Third, knowledge of how to apply QFD tools is the anchor. Knowing which QFD tools to use and for what purpose yields dividends. Finally, QFD provides a roadmap that delivers customer satisfaction, healthy customer experience, and promotes customer loyalty. The Voice of the Customer Table (VOCT) clearly defines the needs of the customer and identifies the requirements for that need. The VOCT charts the course to categorically establish the QFD principles for specific purposes, peoples, and processes. The VOCT is a guide that will fill gaps in QFD requirements. Important uses of the VOCT establish needs, requirements, and steps on how to proceed. Without the VOCT chart, then a fog of what needs to be done, where it needs to be done and why it needs to be done would surface. Table 1 Voice of customer chart to identify customer needs
Current Who What When Is using it? New Else could be using it?

Is it being use for? Else could it be used for? Is it being used? Else could it be used? Else could it be used? Else could it be used? Else could it be used?

Where Is it being used? How Why Is it being used? Is it being used

14

Exceptional performance in the customers eyes is faster, cheaper, and innovative services. Customers want what they want and they want it right now. In addition, they want a healthy customer service experience in the process. Kano

According to Yang (2005), the Kano model was developed within the Japanese manufacturing industry to determine and prioritize/weight customer requirements or expectations. It illustrates that all needs are not created equal, and the resolution of all needs does not have the same impact on customer satisfaction or a performance report. Three types of needs are identified in this model: basic needs, satisfiers, and delighters. The first type expectation is the "basic need" or assumptions that customers have about a service. The second type of expectation is the "satisfier" or the list of items that customers would normally mention as keys to their satisfaction. Achievement of the satisfiers increases customer satisfaction, but only at a linear rate. The third type of expectation is the "delighter". These are needs that a customer does not have conscious knowledge of or fall into the category of "wouldn't it be great if an employee provided ..."

The Kano model utilizes questionnaires to elicit customer feedback. Data is gathered that measures customer satisfaction. For example, a sample questionnaire may ask customers how they feel about a specific product or service (see Appendix A).

Although management ideas are widely discussed in the management literature, such discussions tend to remain conceptual and there is little attention paid to how they are applied in organizations. Because of the tacit nature of management ideas, different interpretations are possible and one idea can be given various meanings due to the subjective perceptions of the

15

members of the organization. It is therefore essential to address these interpretations in research on management ideas since the "impact on organizational practice lies in the first place in its interpretations rather than in its original content." By focusing on activities that generate value for customers, and view the organization as linked chains of activities cutting across departments, process orientation has delivered a powerful answer to many of the perceived problems that functional and product-oriented structured organizations face. The belief is that most existing processes have grown unchecked, without any relevant control, and is therefore terribly inefficient. However, by focusing on the processes that generate value for the customers, and question activities within the organization that do not directly contribute to these processes, process orientation promises both speed and organizational efficiency (Hellstrm, & Eriksson, 2008)

Kansei

According to Nagamachi, et al, (2004), Kansei is a Japanese term where the syllable kan means sensitivity and sei means sensibility, together it addresses the psychological feeling or image of a product and dealing with the dimension of customer feelings. It is used to express the quality of a product in producing pleasure through taking into account emotions, perceptions, and sensations in user experience. The process starts with a set of diverse products or services that provoke a wide range of different emotional responses. These responses can be measured using attribute rating scales. A typical attribute rating scale uses terms such as simple vs. complex or enticing vs. repulsive.

Analyzing products rated on a particular characteristic draws conclusions about customer perceptions. Kansei engineering will guarantee inclusion of data in the product or service design

16

and development cycles where there is still sufficient flexibility to easily modify the user specification before it is finalized.

Six Sigma

The Six Sigma tools and techniques typically used in manufacturing can bring results to a service organization. Six Sigma offers a framework for process improvement based on objective data DMAIC (define, measure, analyze, improve, and control). Six Sigma is a powerful set of tools that enables organizations to take a more accurate and quantitative approach to identifying and correcting root causes of problems. The main focus of Six Sigma is to continuously reduce variations in processes and thus eliminate defects or faults in products and services. The main benefits in applying the Six Sigma: the search for continued improvement in processes; achieving customer satisfaction through better comprehension of the their requirement; better understanding of the critical entries in the processes necessary to respond to alterations in demands and defined specifications; improvement in quality; gains in the flow of processes; increased productivity, reduction in cycle times; increases in production capacity and reliability of products, reduction of defects, of costs, of loss, elimination of activities that do not add value to the process and the maximizing of profits (George, 2009).

17

CHAPTER 3

METHODOLOGY

An overhaul of the orientation process is the first priority. The original three week training program is dumped in favor of an extended orientation program lasting twelve weeks. In addition, new employees are encouraged to provide feedback, participate, and submit suggestions for improvements. The morning orientation session is class room training, demonstrating all of the various technologies, requirements, and solutions. The afternoon orientation training is out on the floor, observing call handling from experienced technicians, and provided clear guidance from those technicians. Further, training modules are implemented that require new employees to complete assignments, quizzes, and receive follow up instruction.

Six Sigma is implemented to unclog the current processes, reduce employee turnover rate, boost corporate morale, and secure customer satisfaction. The first step is to clearly define current issues that impact employee perceptions of the company, job duties, and expectations for the hires. By defining the issues, new employees grasp both the company investment in them and their required investment in the company. The second step is to accurately measure employee turnover rate and begin to identify reasons for that turnover. Once this measure is obtained, then the third step is analyzing the data. By analyzing the data, a map for improvement is generated. The fourth step is the improvement of the current processes. A strategy for overhauling the current bottlenecks, links to dissatisfaction, and procedures stifling productivity is generated. The final step is to control the new processes. By controlling the added changes, the goal of improvement is achieved. Overall, the orientation procedure, employee on-going training, supervisor and management interaction, support and accessibility are all revised.

18

Table 2 Data generated from Six Sigma (DMAIC) methodology

Define Personnel
New Hire

Need
Understand Job Description Learn Expectations Establish relationship with Supervisor Acquire Social Network Develop Positive Experience Develop quality orientation material Provide clear, concise feedback to new hires Distribute user friendly content Demonstration software Provide a welcome wagon Generate supportive climate for New Hires Engage Employees Develop a reputation of commitment Improve orientation procedure for New Hires Build an industry reputation

Outcome
Less confusion, generate confidence Follow-up Survey High Ratings

Orientation Trainers Supervisors

Human Resources

Management

Higher understanding and satisfaction Practical solutions to common problems Higher satisfaction with New Hires Healthy Atmosphere Increase referrals Develop stronger workforce Reduce turnover and subsequent costs

Measure Between January and December of 2008 there were 49 New Hires and 32 resigned

Analyze Benchmarks Organizations with structured Orientation produce stronger retention rates World Class companies extend training beyond Orientation 3 to 6 months Continual Training increases New Hire engagement New Hire decide to stay with the company: 22% decide in the first week 36% decide in the first month 86% decide in the first 6 months Orientation Features Managed in the first 3 months Consistent Content Build relationship with New Hires Practical applications for routine problems Supervisors participate in Orientation

19

Hiring Decision

Orientation Development Continual Training Kaizen Workshop 3-Days

Improve Hire Call Center Representatives with a minimum of an Associates Degree Increase the initial Call Center Representative starting salary from $13 per hour to $15 per hour Review and revise content Design, develop and deploy training modules Intensive Team Meetings Preparation and research

Control The Orientation improvements were rolled out 6 weeks after the Kaizen Event After 90 days, scores tabulated from the New Hire surveys were 25% higher compared to the baseline period The company saves approximately $10,000 in recruiting, hiring and training costs for every New Hire retained. Direct savings from reducing voluntary resignation within the first year is projected to reach $120,000 Taking into account that turnover is expected to drop from 63% down to 38% the cost advantages could potentially reach higher

Kaizen events are a very popular tool for problem solving and continuous improvement. Specifically, Kaizen is a rapid improvement of a limited process area. Part of the improvement team consists of workers in that area. The objectives are to use innovative thinking to eliminate non-value-added work and to immediately implement the changes within a week or less. Ownership of the improvement by the area work team and the development of the teams problem-solving skills are additional benefit (Montabon, 2005).

20

The Kaizan workshop lasted for three days: Day One 1. Short talk from the person or persons who submitted the idea for the event and/or sponsored (championed) the event. 2. The kaizen event process is explained. 3. The current process is then mapped. 4. By the end of the day, brainstorming new ideas is well under way. Day Two 1. The brainstorming continues, but most of this day is given to experimentation of the new ideas. 2. Implementation plans are drawn up where needed for the ideas that warrant adoption. Day Three 1. Any last experiments are done, but most of the day is dedicated to implementing the teams solution. 2. In cases where the solution will require a longer implementation period, the plans for accomplishing the implementation are finalized. 3. The team also prepares a presentation about the solution, which will be given to upper management to conclude the event. The Kaizen event generated a process model over the original departmental model.
Inbound Calls

EMS

Nat. Acc.

Alarms

Call Complete

Figure 2. Process model for customer service. The benefits of the process model for customer service include: 1. 2. 3. 4. 5. 6. 7. All Techs processing any call or alarm received Reducing Caller wait time Managing Customer Service Developing customer service strategy Performing after call follow up Measuring and evaluating customer satisfaction Managing the customer service work force

21

At the heart of this thinking is the concept of the service-profit chain, which can be summarized as follows: 1. Value drives customer satisfaction. 2. Employee productivity drives value. 3. Employee loyalty drives employee productivity. 4. Employee satisfaction drives employee loyalty. 5. Internal quality drives employee satisfaction. It is fundamentally about building a corporate culture that celebrates the employee as the privileged access path to customer loyalty. Effective leadership style places the welfare and empowerment of employees above the neurosis of micromanagement and the delusion of selfaggrandizement (Purvis, 2005). The top-down, bureaucratic management style is transformed into a team-oriented style. Instead of Supervisors simply telling people what to do and delegating tasks, the call center employees now meet at the round table with management to voice their concerns and ideas for improvement. Weekly meetings are scheduled and recorded. The suggestions submitted are evaluated and implemented where applicable. Further, this new format generates a sense of empowerment among the call center representatives. The QFD, VOC, and Kano questionnaires were submitted to customers. The goal is to obtain data that reveals exactly what motivates consumers, what they demand, and emotionally connecting with customers. Consequently, products and services are then designed, developed, and deployed around these requirements. A survey was submitted to 20 National Accounts customer service employees that measured for satisfaction with current employment (see Appendix B). These surveys were distributed both before and after the customer service transformation. The tabulated scores from the National Accounts customer service technicians

22

before the transformation for Satisfied scored four, for Somewhat Satisfied scored three, for Dissatisfied scored eight, for Neutral scored two, and for Not sure scored three. A Kansei survey was submitted to a representative sample of customers for rating their experiences with calling in for service, their opinion of service technicians, and their overall impression with doing business. The goal was to obtain a measure of customer feelings and emotional response to the services provided.

Table 3 KANSEI survey submitted to customers

Caller Service Call Response Time Technician Attitude Technician Support Technician Expertise Overall Impression

Simple Complex Enticing Repulsive

Customer satisfaction surveys reveal how customers feel about products, services, and goods received. These surveys help organizations identify problem areas, tackle unforeseen obstacles, and generate solution strategies to ensure healthy customer satisfaction. By reaching out to customers and soliciting their feedback, companies can then both gauge and fine-tune their performances. One hundred customer surveys were submitted not only before but also after the departmental model and process model transformations.

23

Table 4 Department model results generated from KANSEI survey

Caller

Simple Complex Enticing Repulsive Calling for service 5 20 3 72 Response Time 3 25 4 68 Technician Attitude 8 54 4 34 Technician Support 10 65 5 20 Technician Expertise 10 45 5 40 Overall Impression 7 39 4 50

Customer survey results for department model

Figure 3. Department model results from customer surveys. The customer survey data reveals that the department model created lengthy caller wait time, employee overload, and set the framework for dissatisfaction. Further, the department model constricted time, resources, and energy that negatively impacted both employee and consumer satisfactions.

Data Count

24

Data Analysis Procedures The survey data from customer questionnaires submitted both during the department model and after the transition into the process model were collected and entered into Microsoft Excel. This data was processed into histograms to reveal distinctions between the department and process model customer survey results. Tests for statistical analysis were not performed on the survey data; specifically, neither Type 1 nor Type 2 errors were measured. The final results are suggestive in nature and not conclusive in differences between the original department model and the outcome of the new process model. Overall, the customer survey data collected and processed indicates that customer satisfaction was enhanced by the process model. A preliminary data analysis of customer survey data was the goal and not a full suite of statistical analysis. Consequently, the data analysis performed on the survey data draws correlations and does not conclude cause and effect results from the process model transition.

25

CHAPTER 4

RESULTS

Only satisfied employees will satisfy customers. How people feel about their own job and work quickly translates into how they deal with customers as a result, effective orientation, continual training, primary processes, and effective leadership are the anchors for success. Effective leaders demonstrate talents beyond "charisma". More importantly, effective leaders build bridges of philosophies, purpose, positioning, people, partnerships, and processes (Clemmet, 1998).

The tabulated scores from the National Accounts customer service technicians after the service transformation for Satisfied climbed to ten, for Somewhat Satisfied dropped to two and scores for Dissatisfied shrank to two, for Neutral scored three, and Not sure scored three. Overall, the transformation empowers employees with a team environment, solidifies their value, and boosts their confidence for success. The QFD, VOC, and Kano questionnaires reveal that low caller wait time, high professionalism and speed of transaction are what they demand. As a result of converting the original departmental model into a process model, these demands are now being met. The Process Model implemented by National Accounts: 1. Each call center department is combined 2. All calls are answered by each department 3. Caller wait time is reduced from average of ten minutes down to an average of three minutes 4. Friction between departments has been removed 5. Efficiency is increased, employee frustrations minimized, and corporate morale is enhanced 6. All Techs processing any call or alarm received 7. Managing Customer Service

26

8. Developing customer service strategy 9. Performing after call follow up 10. Measuring and evaluating customer satisfaction 11. Managing the customer service work force

Methods for measuring that success have been deployed. For example, automated customer satisfaction surveys are the new norm. Immediately after a call is completed, the survey process probes customer satisfaction with a point scheme. The customers can score the quality of service, how they felt during the process and their impression of the service representative. Overall, these tools allow the company to examine customer service strengths and weaknesses within the service lifecycle. The implication is that companies which start to leverage the power of emotion in the decision-making process, and leverage that power to improve the customer experience are likely to succeed in an increasingly commoditized market. First, the most important skill is developing a clear, concise orientation for New Hires. This format includes practical solutions, demonstrated by Supervisors, within a supportive atmosphere. Second, implementing a cross-functional business model unclogs processes, and generates a free flowing, seamless operation. This strategy reduces bottlenecks, conflicts, and friction. Third, developing a team-oriented management style produces fresh ideas, reduces chaos, and creates a sense of empowerment from lower level employees. Treating others with respect, confirming their value, and rewarding efforts with due praise gives employees a strong sense of belonging. Getting people to follow orders is not leading a true leader inspires people to do their best (Steward 2004, p 38). Further, developing long-term relationships with both employees and customers is a key to success.

Building genuine, honest, and supportive bridges with others is a win-win for everyone. When consumers trust and feel comfortable with customer service representatives the business

27

enjoys increased compatibility and harmony (Steward 2006, p 41). Keeping everyone informed of news, obstacles, and solutions is the heart of a thriving business. People coming together, sharing ideals, and identifying concerns are bridges for success. Keeping others in the dark is a sure way to hurt morale (Steward 2004. p 136). Finally, getting people involved, creating a vision, and conveying open, honest ideals are all keys to business success. The current customer service dilemmas include identifying the necessary tasks and the best people for those tasks. The customer service strategies must be collectively assessed by the diverse team of customer service representatives, supervisors, and leadership. Competitive edge in the market demands continually assessing current market trends and existing talents on board. Further, the team must develop a corporate climate that rewards creativity, promotes innovation, and embraces cooperation from the employees. When employees feel that their contributions are valued, their voices heard, and their positions secured, then a strong sense of belonging emerges. This feeling of belonging can propel high achievements from within. Consequently, the company cultivates the employees feeling happy about what they are doing, and their outlooks healthy for National Accounts a formula for success.

Delegated teams primarily improve people and processes through improved employee morale, communication, creating a sense of belonging, improved problem solving and reduced quality costs. Voluntary teams primarily improve people through improved employee morale, communication and personal development (Mann & Kehoe, 1994).

Shifting gears into effective training, improving processes, and objective teamwork has ignited a passion from National Accounts employees. Employees meet at the round table, toss-up ideas, and formulate strategies for customer service success. Specifically, how to improve the

28

customer experience is a visible objective. The refreshing customer "experience" is generated throughout the customer service lifecycle. Customers are greeted with a confident, reassuring, and dedicated commitment for customer service. For example, when customers call to inquire about services, they receive positive feedback, clear communication, and a spirited attitude for customer service. On the other hand, when a disgruntled customer calls about dissatisfaction with service, the customer receives a total commitment response. Finally, cultivating a healthy customer service strategy that generates a climate of "we are here for you" both during and after the service provides customers with a refreshing experience. This goal is reached from quality orientation, continual training, improving processes and healthy teamwork.

One hundred customer surveys were submitted after the process model transformations. The customer data illustrates that the process model reduced caller wait time, frustrations with technicians, and boosted overall impressions with the service. Overall, customer satisfaction was improved from the process model compared to the departmental model. Table 5 Process model results
Caller Simple Calling for service 50 Response Time 65 Technician Attitude 73 Technician Support 85 Technician Expertise 80 Overall Impression 85 Complex 1 1 2 1 2 1 Enticing 48 34 25 14 18 14 Repulsive 1 0 0 0 0 0

29

Customer survey results for process model

Figure 4. Process model results from customer surveys. The customer survey data revealed that the process model enhanced speed in execution, reduced customer wait time, and improved the service process. Overall, the process model generated positive results that directly impacted customer satisfaction. Customer survey comparisons

Data Count Figure 5. Survey results indicate the process model is superior to the department model. Data Count

30

CHAPTER 5

SUMMARY

Customers demand faster, less expensive and prompt services. The rush for innovation that stimulates customer satisfaction typically aims the scope at external variables. For example, companies often target angles of market differentiation by price, product and service. This customer service strategy is out-dated and yields diminished returns. Forward thinking organizations emotionally connect with customers, cultivate a healthy, pleasurable customer experience, and build a talented team of personnel. Quality leaders generate a quality team as opposed to managers who are dedicated to customer service excellence. Managers are appointed to their positions and their ability to influence employees is based on the formal authority inherent in that position, and in contrast leaders emerge from within a group and are able to influence others for reasons beyond formal authority. Exchanging ideas, brainstorming solutions, and united in commitment to service are the hallmarks for success. Firms that take a good, hard look at themselves are superior in recognizing their corporate strengths and weaknesses. As a result, this self-discovery journey will ultimately raise the bar for customer satisfaction. When organizations strive to improve themselves, then customers land in the winners circle. The Voice of customers is what drives business. The goal is to cultivate satisfied customers and motivate loyal customers. Customer loyalty is a purchase behavior, and customer satisfaction is an attitude. Satisfied customers results in customers becoming advocates for the company, creating referral, retention and profitable growth. Loyal customers are less likely to switch to competitors in view of a given price inducement, and they make more purchases

31

compared to less loyal customers. Global markets, technical innovations, and customer perceptions often converge to fuel the demand, for faster, less expensive, quality products and services. Businesses who engage their customers, throw down the welcome mat, and toss a friendly arm over the customer shoulders are capturing a competitive edge in the marketplace. In order to identify swaying customer demands, QFD and Kano provide a roadmap to success. Getting customers involved, designing products and services around those needs, and cultivating a healthy customer service strategy that generates a climate of "we are here for you" both during and after the service provides customers with a refreshing experience. Finally, Six Sigma, QFD and Kano aligns the entire company towards a common goal. This strategy empowers organizations to exceed expectations and value by understanding customer requirement, psychology of the organization, adding value, developing a customer satisfaction system, and generating innovative strategies.

REFERENCES

33

REFERENCES

Akao, Yoji.(1994). Development history of quality function deployment. The Customer Driven Approach to Quality Planning and Deployment, 107, 339.

Anderson, K. & Zemke, R. (2007). Knock your socks off service. New York, NY: Amacom Berry, L. & Carbone, L. (2007). Build loyalty through experience management. Quality Progress, 40, 26. Clemmet, A. (1998). Work Study, 47, 53. Discovering the Kano Model. (2010). The kano model. Retrieved September 20, 2010 from http://www.kanomodel.com/ Emery, C.R., & Tolbert, S.H. (2004). Using the kano model of customer satisfaction to define and communicate supervisor expectations. Journal of Organizational Culture, Communications & Conflict, 8, 77-90.

Ernan R. (2010): Voice of customer relationship research. Retrieved September 20, 2010 from http://www.erdm.com/creating-integrated-marketing-solutions.05.php5 George, M. (2010). The lean six sigma guide to doing more with less: cut costs, reduce waste, and lower your overhead. Hoboken, NJ: Wiley and Sons Gonzalez, M., Quesada, G., & Bahill, T. (2003). Improving product design using quality function deployment. Quality Engineering, 16, 45.

Gupta, A., McDaniel, J., & Kanthi Herath, S. (2005). Quality management in service firms: sustaining structures of total quality service. Managing Service Quality. Bedford: VA.

34

Hellstrm, A., & Eriksson, H. (2008). Are you viewing, mapping or managing your processes? TQM Journal, 20, 166.

Jones, T & Sasser, W. (1995). Why satisfied customers defect. Harvard Business Review. Mann, R & Kehoe, D. (1994). An evaluation of the effects of quality improvement activities on business performance. The International Journal of Quality & Reliability Management, 11, 29.

Miscikowski, D., & Stein, E. (2006). Empowering employees to pull the quality trigger. Quality Progress, 39, 43. Millard, N. (2006). Learning from the 'wow' factor how to engage customers through the design of effective affective customer experiences. BT Technology Journal, 3, 17.

Montabon, F. (2005). Using kaizen events for back office processes: the recruitment of frontline supervisor co-ops. Total Quality Management & Business Excellence. Abingdon: VA. Nagamachi, M. (2010). International kansei institute. Retrieved September 20, 2010 from http://www.kanseidesign.com/kansei_e.html Nagamachi, M., Schtte, S., Eklund, J., & Axelsson, J. (2004). Concepts, methods and tools in Kansei Engineering. Theoretical Issues in Ergonomics Science, 5, 214-232. Paradise-Tornow, C.A.(1990). Management effectiveness, service quality, and organizational performance in banks. Human Resource Planning, 14, 129-39.

35

Purvis, J. (2005). Revisiting the service-profit chain. Retrieved April 10, 2009 from http://www.corda.com/revisiting-the-service-profit-chain.php Pyzdek, T,(2003).The six sigma handbook. New York, NY: McGraw Hill. Reis, D, Pena, L, & Lopes, P. (2003). Customer satisfaction. The historical perspective. Management Decision, 41, 195.

Steward, D. & Shook, R. (2004). Doing business by the good book. New York, NY. Hyperion. Testa, M. (2005).Group & organization management. Thousand Oaks: CA Tonnessen, T. (2005). Continuous innovation through company-wide employee participation. The TQM Magazine, 17, 195.

Wiley, J.W.(1990). Customer satisfaction: a supportive work environment and its financial cost. Human Resource Planning, 14, 117-27.

Yang, C. (2005). The refined kano model and its application. Total Quality Management & Business Excellence. Abingdon: VA.

APPENDIX A

37

Kano Questionnaire If the automated answering system was scrapped, and a service technician immediately responded to your call, how would you feel?

I expect it to be that way. I like it that way. I am neutral. I can live with it this way. I dislike it this way.

If the service technician demonstrated true care and concern for your needs, how would you feel?

I expect it to be that way. I like it that way. I am neutral. I can live with it this way. I dislike it this way.

If the automated answering system was not scrapped, and a service technician responded to your call when available, how would you feel?

I expect it to be that way. I like it that way. I am neutral. I can live with it this way. I dislike it this way.

If the service technician did not demonstrate true care and concern for your needs, how would you feel?

I expect it to be that way. I like it that way. I am neutral. I can live with it this way. I dislike it this way.

If service technician performed a quality service follow-up phone call to you, how would you feel?

I expect it to be that way. I like it that way. I am neutral. I can live with it this way. I dislike it this way.

38

If the company provided discounts and incentives for future products and services, how would you feel?

I expect it to be that way. I like it that way. I am neutral. I can live with it this way. I dislike it this way.

If service technician did not perform a quality service follow-up phone call to you, how would you feel?

I expect it to be that way. I like it that way. I am neutral. I can live with it this way. I dislike it this way.

If the company did not provide discounts and incentives for future products and services, how would you feel?

I expect it to be that way. I like it that way. I am neutral. I can live with it this way. I dislike it this way.

APPENDIX B

40

Employee Questionnaire 1) I feel with my job: a) Satisfied b) Somewhat Satisfied c) Dissatisfied d) Neutral e) Not sure 2) I feel that the management supports my concerns: a) Satisfied b) Somewhat Satisfied c) Dissatisfied d) Neutral e) Not sure 3) I feel that my employment is secure: a) Satisfied b) Somewhat Satisfied c) Dissatisfied d) Neutral e) Not sure 4) I feel that I make a difference: a) Satisfied b) Somewhat Satisfied c) Dissatisfied d) Neutral e) Not sure 5) I feel that my voice is heard: a) Satisfied b) Somewhat Satisfied c) Dissatisfied d) Neutral e) Not sure 6) I feel that I have a future with this company: a) Satisfied b) Somewhat Satisfied

41

c) Dissatisfied d) Neutral e) Not sure 7) I feel that I am valued by the company: a) Satisfied b) Somewhat Satisfied c) Dissatisfied d) Neutral e) Not sure 8) I feel with the current management style. a) Satisfied b) Somewhat Satisfied c) Dissatisfied d) Neutral e) Not sure 9) I feel with the current level of teamwork. a) Satisfied b) Somewhat Satisfied c) Dissatisfied d) Neutral e) Not sure 10) I feel with the current training system. a) Satisfied b) Somewhat Satisfied c) Dissatisfied d) Neutral e) Not sure