that teaches this difficult lesson is not likely to retain its customer feedback and input, 11) communicate continually with stakeholders concerning improvements and progress, and 12) ensure management review of metrics continually." customers. Whether customers are satisfied will depend on the sum of their perceptions relative to all of these factors. The issue of customer satisfaction is complicated even more by the fact that different customers place a different priority on these factors. That fact makes it even more critical that organiza- tions maintain close, personal, and continual contact with their customers. CUSTOMER-DEFINED VALUE It is important for organizations to understand how custom- ers define value. The value of a product or service is the sum of a customer's perceptions of the following factors: a telephone survey, one-on-one interviews, or focus groups. • Product or service quality Customer-Defined Value at Federal Express 2. Rate the relative importance of the attributes. Ask customers to prioritize the list of attributes identified in the first step. The ranking should run from most impor- tant to least important. 3. Assess your organization's performance relative to the prioritized list of attributes. Is the most important attribute on the list the strongest attribute of the product or service in question? Ideally, the relative strength of the attributes of a given product or service will match the priorities established by customers. Service provided by the organization Federal Express is one of the most successful package de- livery companies on the globe. Many businesspeople think Federal Express sets the worldwide standard in customer service. One of the keys to the success of this company is its commitment to customer-defined value. Part of the operat- ing philosophy of Federal Express is that customers are the best judges of quality. In order to capture customers' input in a meaningful and useful manner, Federal Express developed a system of Service Quality Indicators (SQIS). These indicators reflect the customers' views concerning their satisfaction with the performance of Federal Express. The list of SQIS is as follows: 1. Delivery on the right day but after the promised time CUSTOMER SATISFACTION PROCESS • The organization's personnel The organization's image - Customer focus is more than just sending out surveys. Customer focus is part of a process that leads to continual improvements in the organization that, in turn, result in customer satisfaction. Resources are limited; consequently, they must be applied where they will do the most to improve customer satisfaction and customer retention. The process described in the following list will help meet all these goals: 1) identify your customers, 2) identify the product or service attributes your customers value, 3) prioritize these attributes, 4) determine customer satisfaction with the attributes, 5) tie customer feedback to your processes, 6) develop metrics, 7) implement monitoring at the lowest levels, 8) put the most effort into high value attributes that show show cus- tomer satisfaction, 9) focus on process areas that have the best opportunities for improvement, 10) continually update Selling price of the product or service Overall cost of the product or service All of these factors are important to customers. The product or service must have the attributes customers want, and those attributes must be of the quality expected. The customer's interaction with the organization and how this interaction is measured are important. Just making a good product or service available is not enough. Customer satisfaction will also be affected by how effectively, courte- ously, and promptly customers are served. The appearance, knowledge, and attitudes of an organization's personnel also affect the level of satisfaction that customers experience. Customers will build relationships with personnel in the organization who are knowledgeable, professional in appear- ance, and positive. Such relationships promote loyalty. On the other hand, no matter how satisfied customers are with a Ask customers to rate all attributes of your product or service against the same attributes of a competitor's product or service. To consistently beat the compe- tition, an organization's product or service must have more value for customers on an attribute-by-attribute basis. By asking customers to rate attributes, the orga- nization can determine how they perceive the value, on a relative basis, of its product or service attributes. This gives the organization the information it needs to im- prove the attributes of its products or services in accor- dance with customer preferences. 5. Repeat the process periodically. Over time, cus- tomer preferences might change, as might the attributes of competing products or services. Consequently, it is important to periodically repeat the CVA process. 4. 2. Delivery on the wrong day 3. Unsuccessful trace of a package 4. Customer complaints 5. Proof of performance is missing 6 Mice 6. Missed pickups from customers 7. Damaged packages 8. Lost packages 9. Unanswered calls from customers (not answered within 20 seconds) product or service, if they don't like an organization's people, they are likely to defect to the competition. An organization's image is important to customers. Consequently, it is vital not just to have quality products, service, and personnel but also to project an image that is consistent with these quality characteristics. Think of the adage that one should "not just talk the talk but walk the walk." In establishing and nurturing an image, it is important to do both those things. The key is that organizations must be concerned with both substance and appearances. An or- ganization's image is defined by what customers believe to be true about it. Federal Express continually collects data for all of these criteria and uses the data to identify service problems and their root causes. Of course, identifying the problems is just the first step. Correcting them and eliminating the root causes follow quickly once a cause has been identified. Customer Value Analysis Selling price is important to customers, of course. It is the easiest characteristic to compare. The point to under- stand here is that customers have become so sophisticated that they no longer confuse selling price and cost. In other words, they know the difference between cheap and inex- pensive. A competitive selling price is a must in the modern workplace, but it should not be achieved by sacrificing qual- What is it that customers want from our organization? What is it about our products or services that customers value? A total quality organization must know the answers to these questions. Organizations that don't know what their custom- ers value run the risk of wasting valuable resources and, in turn, improve the wrong things. The process used to deter- mine what is important to customers is called customer value analysis (CVA). The CVA process consists of the following five steps: ity or service. Most customers know that the selling price is just the beginning of the actual cost of a product. Only when main- tenance, upkeep, replacement parts, warranty issues, and service are factored in does one know the product's real cost. Customers who don't understand the difference between price and cost soon learn-the hard way. The organization 1. Determine what attributes customers value most. Ask customers to describe the attributes of the product or service. At this point, no priority value is assigned to the attributes. This can be done using a written survey,