Welcome to Six Sigma black belt, Voice of the Customer, course 3, module 1. Quality is built around the customer. The customer is the reason we go into business and ultimately lead the marketplace. The customer is the driver of quality and expectations. These expectations manifest themselves in terms of performance, reliability, competitive prices, on-time delivery, service, and clear and accurate transaction processing. The identity of our customer can sometimes elude us, the next person in the process flow or internal department could be thought of as the customer. Even an external customer could in fact serve another role other than that of a true customer. The primary customer of the process will or should have the highest impact on the process. The primary customer is of utmost importance to the process. Understanding the identity of the customer will require team discussions. Typically, the external customer is the entity that brings the most revenue to the business. Customers can come from any number of sources. First, we can look to existing happy customers. These are customers that we have pleased and continue to work to maintain. The largest portion of unhappy customers may come from unintended end-users. These individuals could be customers with the wrong expectations about our product or customers with a legitimate grievance. Companies sometimes react to bad data and ultimately fix the wrong problem. Every business loses customers despite their best effort. A lost customer presents an opportunity for a competitor to gain a new customer. This is a natural development. A prospective customer could also be the result of a lost customer at a competing firm or could be a new customer entering the marketplace. Project stakeholders can be customers. They can also fill a number of other roles in the organization, including, managers of the process, individual contributors of the process, suppliers, people upstream and downstream of the process, and finance. High-stake Six Sigma projects lead to significant transformations of processes and organizations. These changes can affect those directly and indirectly tied to the process and result in resistance to the change. Project stakeholders are put in place to remove or reduce the resistance by enlisting these individuals in the process of change. This facilitates buying alternative solutions and the removal of pitfalls. An internal customer can be defined as anyone in the company who is affected by the product or service as it is being generated. Internal customers are ignored in the pursuit of producing goods and services. Internal customers are often employees of the company. As such, organizations should promote ways to bring employees across multiple departments together to solve problems. Management practices affect employee satisfaction and this, in turn, influences customer satisfaction. Therefore, management's effort and appreciation for the internal customer, can result in significant strides toward customer satisfaction. Many times, management can demonstrate its commitment to employees through effective communication. External customers are the most important part of any organization. There are three types of external customers, end-users, intermediate customers, and impacted parties. Understanding who they are and their expectations help us to best develop products that they will want to buy. Remember that every customer is unique and every business has many customers with each their own decision criteria. Also, recognize that businesses compete for external customers. We must be prepared to adjust our strategy as the market's needs change. External customers may be sorted in many ways in an attempt to better understand their requirements and identify possible market niches. This is also known as external customer segmentation. The two top classifications are business and consumer customers. Business customers can be grouped by profit margin, competition in market, risk of market, and growth in market. The consumer customer market differs because of its large size, small-dollar purchases, scope of transaction, and product knowledge. Also, unlike the business, the supplier does not interface with the consumer. End users are external customers who purchase goods and services for their own use. Intermediate customers purchase the product or service and then resell the product to an end-user. Clearly, the volume of and amount of dollars changing hands is much higher than that for the end-user. As a result, requirements and needs will be different. An impacted party is an individual or group who does not purchase or use the product or service, but they can be influenced through the acquisition or use of the product or service. Customer-driven organizations are becoming more common globally. About 70 percent of customers who leave a company do so not because of the product quality, but because of the service quality. Customer service is at the nexus of how businesses improve. Begin by understanding the customer needs. Develop a service strategy and set of standards for measuring results. Implement through training and proper placement of human resources. Make sure to recognize and celebrate your successes. Most organizations spend most of their resources on acquiring new customers and less on retaining customers. Superior customer satisfaction does not mean the company has good customer retention and good customer loyalty. In fact, customers are worth around five times more than new customers. In terms of cost, the cost of retaining a current customer is only one-fourth the cost of acquiring a new customer. The effort to retain customers requires some effort on the company's part. Over 60 percent of dissatisfied customers think it is futile to complain. When a customer spends on a good or service, they also pay for an expectation. Ironically, building and keeping a happy customer is much harder than managing a dissatisfied customer. An angry customer is more likely to be more vocal and expending more energy and passion in letting others know about their dissatisfaction. In quality circles, it is common to expect that only the disgruntled will take the time to complain. In essence, we only hear about what we do wrong in the eyes of the customer and so little about what we do right. The value of a loyal customer is not measured on the basis of one large purchase but rather on the lifetime worth. Loyal customers account for a high proportion of sales and profit growth. Customer retention generates repeat sales, and it is cheaper to retain customers. Promoting a retained customer to a loyal customer can be very difficult. The customer is critical to business success. As Six Sigma Black Belts, we must consider how both external and internal customers can be identified, as well as the requirements they demand to retain and maintain the relationship and improve the business process. This relationship is at the foundation of the company's ability to be effective in delivering customer satisfaction.
