Up till now too much has been written on WTO
'threat', and most of these have highlighted the non-competitiveness of
our industry and the barriers to trade. Very little has been mentioned
of the management systems/methodologies adopted by companies, not only
to face the new challenge but also to exploit the opportunity.
In this regard Pakistani industrialists are going to
face a squeeze on both fronts — domestic and niche exports markets. On
the domestic front, the pressure will primarily come from increased
On the export front, the pressures are entirely
different. The firms in the export market will have to contend with —
Increased international competition on price and quality, Reduced
domestic subsidy/incentive for exports — Strictly enforced patent
regulations — Requirements to comply with WTO labor norms —
Requirement to comply with WTO norms on environment-friendly products
and production processes — Requirement to comply with strict safety
norms — Integration of global supply-chains and market consolidation.
The key for businesses to survive in this vicious
market will be to identify a unique place for them. Those who choose to
exit the game should do so now, for the going will get tough for those
who stay. The rewards for those who stay and survive could be enormous.
Studies across sectors and industries with domestic and export-oriented
players reveal certain common traits across successful companies: high
quality consciousness — global cost-competitive — intense commitment
to delivery and post-delivery care — high service orientation and
willingness to learn from customers — clear business and market
The unique place can be captured through continuous
monitoring of global environments to sense the emergence of threats and
opportunities. The model also needs to be dynamic. The ability to adapt
to rapid change will itself be the biggest competency needed to survive.
Following parameters will lead to the formation of
this unique model.
The relevance of the brand in this
context needs to be underlined. As the number of competitive products
jostling for the customers mind-space increase, the brand needs to be
distinct. Brand-building would need to go beyond pure advertisement to
triggering a set of unique associations that provide the impulse to
Domestic players will have to match
the lowest international prices to remain in business. The only solution
for achieving this end-price is to work on target-pricing. To build
global economies of scale, the mass market in region needs to be
exploited. This can be explored only through an aggressive pricing
CONTINUOUS PRODUCT DEVELOPMENT:
The customer will have to be offered
increasing product and service variety, quality, features, benefits and
better prices in order to be competitive in the new world trading order.
Reach would determine the scale of
operation a company can build. Companies need to outgrow conventional
channels and explore new distribution strategies. Similarly, cutting the
cost of reaching customers will acquire significance. Net-based
marketing is already showing the way here.
Expanding the business context to a
global frame of reference would be the next logical step for a dominant
domestic player. The strength acquired in fortifying the domestic market
interests need to be scaled up to match international requirements. Some
key requirements to globalize are :
An internationally relevant brand image,
International reach, internationally competitive costs and prices,
Internationally acceptable quality standards, Organizational set-up and
skills to tap international markets, Resources at internationally
competitive costs, to market globally, Ability to set-up and operate a
global corporation. The route map for a company looking at global
operations would primarily span the following:
IDENTIFY YOUR BUSINESS MODEL AND STRATEGY
* Build globally relevant competencies, and
* Choose the route to globalize — direct entry, co-option, mergers and
acquisitions, joint ventures.
HUMAN RESOURCE: As
the economy integrates with the world, there is a threat of a
significant portion of managerial talent shifting to companies that can
afford global-level salaries and provide superior work environment.
Growth opportunities, career management and innovative compensation
practices will need to be evolved to retain talents.
The organization would need to be
flexibly designed to restructure and undergo metamorphosis at frequent
intervals. This would be triggered by entry into new markets, especially
global, changes in the technology environment, mergers and acquisitions,
and so on.
As a result of above discussions, companies now are
forced to elevate the customer from being just a customer' to a part of
their mission statements and quality policies. No industry can survive
with out divulging customers to their processes.
Before embarking on customer satisfaction model, we
first should spare a few minutes to answer the following questions; and
thus take stock of how much our organization has moved towards
Identification of key customers?
The expectation of different classes of customers is
different. Hence, having a common measure of customer satisfaction for
all customers may not be very useful to the organization. An
organization needs to identify all its customers, including end
consumers, distribution channel partners, stakeholders such as
shareholders and so on. A prioritization of customers needs to be done
as the next logical step. Many organizations tend to define customers as
those who buy/use their product or service. In this process, they
neglect to take stock of other customers and fulfilling their
Knowledge of customer expectations in terms of
product offerings and service to each of the customer segments
organization cater to?
Needs, and hence expectations, of customers change
due to various factors. Conventional customer satisfaction measures may
indicate a satisfaction with the product or service, but fail to measure
the satisfaction of the need. An organization needs to track and be
clear about the expectations of its customers in the present context.
This is critical for the organization to be able to plan the future
business and pre-empt the competition.
Linking business objectives to customer expectations,
so that you leverage on satisfying/delighting your customers?
There is a need to strategize the measurement of
customer satisfaction to the achievement of business objectives (in
terms of turnover, profitability and so on). In essence, an organization
needs to measure the performance expectations (quantitative and
qualitative) of its key customers. Then, the effect of incremental
investment towards maintenance/improvement of satisfaction levels among
the key customers on the business results needs to be studied. The role
model for this has been explained in ISO 9001:2000 clause 5.4.
Above questions have been raised because many
organizations buy into the concepts of customers relationship management
and customer satisfaction in an incomplete perspective.
INSTITUTING A TRACKING SYSTEM:
After having identified the key
customers, their expectations and linking them to business objectives
arises the need for a system to capture, analyze, measure and track the
performance of an organization on these various parameters. This system
needs to possess comprehensiveness, accuracy, objectivity, sensitivity
to changes, measurability, linkage to business results and so on. A
comprehensive model to help organizations achieve this linkage as drawn
from ISO 9001:2000 is given below. As per this model customer
satisfaction measurement will need to have three components:
CUSTOMER SATISFACTION INDEXING & BENCHMARKING:
A model integrating quantitative and
qualitative performance expectations of key customers specific to the
client organization needs to be evolved through clauses 5.2, 7.2.1,
7.2.3, 8.2.1 8.4 and 8.5.1. As suggested, the index should be linked to
the business objectives of the organization. The indexing is essentially
on a stand-alone basis without any comparison.
Benchmarking process goes a step ahead of the
stand-alone customer satisfaction index. A set of companies from within
or outside the industry can be selected and the level of satisfaction
compared. Care should be taken here in selecting the group of companies
to ensure that the kinds of customers or products and services have some
CUSTOMER SATISFACTION STRATEGY: As
a logical conclusion to the customer satisfaction measurement, the
strategic aspects need to be focused on. These could include:
Identifying the factors relating to customer
satisfaction and highlighting areas that the organization can leverage
and areas where the organization needs improvement.
Classification of customers and service levels for
each customer segment: An organization can run programs such as a
loyalty club to retain old customers and a frequent users club for heavy
users. Even options such as servicing light users through an outsourced
set-up can be explored for economic reasons.
The methodology for customer satisfaction measurement
is depicted here as under;
Various aspects of the industry will
have to be reviewed including size, growth, national and international
players, their market shares, preferred brands and reasons, cost
structure, capital structure, working capital cycle, end customers,
channel of distribution, purchase behavior of customers,
promotions/advertisements and so on to identify various possible
customers and key customers.
Various aspects of the organization will have to be reviewed including
turnover, profitability, growth, market share, cost structure, capital
structure, markets, channels, promotions/advertisements, top line and
bottom line contributions from various classification of customers and
so on to identify customers and key customers.
A study for understanding the
performance expectations of key customers including quantitative (on
time and cost) and qualitative (on convenience, simplicity of
procedures, processes) aspects is needed. These can be obtained from key
customers through one-to-one interviews, telephonic interviews, depth
interviews, focus group discussions, and consumer panels and so on.
DEVELOPMENT OF A CSM MODEL AND EVALUATION:
This will be an integration of
performance expectations from the key customers with weights for various
parameters based on customer priorities. The evaluation of performance
of the organization on various parameters would be based on customer
feedback and statistics obtained at various points connecting the
organization and the customers.
To start with, the universe of customers will be
clustered into homogeneous groups exhibiting a common trait. The common
trait could be quantum of buy, frequency of buy, geographical location
and so on. Then the current satisfaction level of various clusters of
customers will be established. The reasons for dissatisfaction among
various clusters can be done at two key levels i.e., product and
process. At the product level, aspects relating to attributes of the
product (in terms of physical parameters, utility value, price,
discounts, warranty and so on) can be probed. At the process level, the
association in the purchase process will be studied i.e. Pre-purchase
behavior, purchase channel through which a product was bought,
convenience and cost of acquisition, Post-purchase behavior etc.
The reasons for dissatisfaction can further be
reviewed to identify — Product re-engineering requirements — Process
re-engineering requirements, Identification of changing needs
ANALYSIS AND RECOMMENDATIONS:
Based on the output of CSM, analysis
will be done on aspects such as:
Areas to leverage — Areas to improve, Defining key
customers — Defining service levels and performance expectations —
Defining process changes — Strategic inputs to move from customer
satisfaction to delight — Satisfaction elasticity of business and
designing systems for data capture for continuous tracking of
performance. As a final assessment of satisfaction, it is necessary to
measure whether the level of satisfaction with the `value for money'
services leads to either re-use or recommendations to others. This final
level of measurement will be the actual measure of customer