What’s the real link between quality management and customer satisfaction?
Anyone in business will agree that it is easier to grow sales from existing customers than constantly to seek new ones. That is why keeping clients happy is a top priority for most companies. However, there are no fast solutions to achieving customer satisfaction; it can only be done by consistently providing quality products and services and excellent customer care. Implementing a quality management system (QMS) can help increase customer satisfaction, and putting this target center stage from the outset allows companies to design a QMS perfectly suited to their needs.
Why does customer satisfaction matter?
Our era has been hailed as the “Age of the Customer”, one in which the internet, and in particular, social networks, give customers the power to share information with thousands of others instantly and internationally. Customer satisfaction is therefore crucial to protecting a company’s reputation, retaining existing clients, and achieving potentially lucrative up- and cross-sales.
That said, customer satisfaction is also the best path to new sales. According to the Net Promoter System® developed by management consultants Bain & Company, customers can be divided into three categories: promoters, passives and detractors. Promoters are loyal enthusiasts who keep buying from a company and encourage others to do likewise; detractors are unhappy customers reluctant to take their business elsewhere. Passives are satisfied but unenthusiastic customers who would be easily converted by a competitor. Bain calculate a company’s Net Promoter Score® (NPS) by subtracting the percentage of a company’s customers that are detractors from the percentage that are promoters.
Why does all this matter? Bain’s research shows that companies that achieve long-term profitable growth have an NPS two times higher than average. Furthermore, an industry’s Net Promoter leader grows on average at more than twice the rate of its competitors.
Customer satisfaction is thus intrinsically linked to a company’s organic growth, contributing to both customer retention and acquisition.
Customer experience lasts throughout your product’s life
In an age where the customer is not so much king, more judge, jury and executioner, companies seeking success must go beyond being customer-centric to being “customer-obsessed”. Understanding and meeting their needs while communicating your efforts is the surest way to achieve customer satisfaction and grow sales.
It sounds straightforward, but the path to customer satisfaction is fraught with potential errors. One major mistake companies make is to focus on a narrow definition of the customer experience, carefully cultivated by the marketing department through advertising, and at point of sale. In reality, your customer’s experience of your brand starts when they take their purchase out of the box.
This means that to be customer-obsessed, companies must also be obsessed with quality in every aspect of their operations, from product components and manufacturing process, to speed of delivery and after-sales service. However, this kind of company-wide focus is not automatic for most businesses – it must be constructed and managed.
Building a “customer-obsessed” management system
The ISO 9001 quality management system standard goes beyond a narrow definition of quality as products or services that are fit for purpose to focus on how customers experience your business. ISO 9001 involves implementing a management system uniquely suited to your business’ – and customers’ – needs, and certified by an external accredited body such as Bureau Veritas.
The standard’s specifications for customer satisfaction are few but important. One of the clauses with the most potential to deliver lasting value to your organization makes the distinction between customer needs and expectations1. A need is a contractual requirement such as an agreed delivery date, while a customer’s expectations are often unexpressed, implicit and different from one individual to another. The standard demands that companies understand both and requires that they put in place processes to meet them. It also sets out how “customer focus” itself should be managed, with clearly defined responsibilities and strong leadership.
Making sure customers stay satisfied
One of ISO 9001’s main focuses is determining and selecting opportunities for improvement that target customer needs and satisfaction. The standard requires that companies define their methods for monitoring and reviewing customer perceptions – that is to say customers’ beliefs about a brand, both positive and negative.
Of course, it is negative feedback that will provide the most valuable input for improving products and services. An important way of identifying improvement projects is through nonconformities. Nonconformities can be anything from product defects to service delays, and can be garnered from customer feedback or indeed from internal audits and employee observations. They are defined as any problem within the organization that could negatively impact the customer experience. It is neither necessary nor possible to address all non-conformities, but where a non-conformity poses a real problem, you must take steps to understand it, determine its causes, and rectify it.
Targeting customer satisfaction as a route to long-term growth
Putting customer satisfaction achieved through a structured and certified quality management system at the heart of your growth strategy means taking the long view. It requires you to have faith that happy customers will become loyal ambassadors for your brand and convert others. It is not an easy approach, but it can yield real results. Take care of your customers… and they will take care of you!
1 ISO 9001:2015 Clause 9: Planning and Evaluation