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Total Quality Management

Notes In the following section we look at a number of positive customer retention strategies, including
meeting and exceeding customer expectations, finding ways to add value, creating social and
structural bonds, and building commitment.

6.2.2 Positive Retention Strategies

It is very difficult to build long-term relationships with customers if their needs and expectations
are not understood and well met. It is a fundamental precept of modern customer management
that companies should understand customers, then acquire and deploy resources to ensure their
satisfaction and retention. Customers that you are not positioned to serve may be better served
by your competitors.
Exceeding customer expectations means going beyond what would normally satisfy the customer.
This does not necessarily mean being world-class or best-in-class. It does mean being aware of
what it usually takes to satisfy the customer and what it might take to delight or pleasantly
surprise the customer. You cannot really strategize to delight the customer if you do not
understand the customer’s fundamental expectations. You may stumble onto attributes of your
performance that do delight the customer, but you cannot consistent efforts to delight customers
show your commitments to the relationship. Commitment builds trust. Trust begets relationship
longevity.
Customer delight occurs when the customer’s perception of their experience of doing business
with you exceeds their expectation. In formulaic terms:

Customer delight = P > E
Where P = perception and E = expectation.
This formula implies that customer delight can be influenced in two ways: by managing
expectations or by managing performance. In most commercial contexts customers expectations
are ahead of perceptions. In other words, customers generally can find cause for dissatisfaction.
You might think that this would encourage companies to attempt to manage customer expectation
down to levels that can be delivered. However, competitors may well be improving their
performance in an attempt to meet customer expectations. If your strategy is to manage
expectations down, you may well lose customers to the better performing company. This is
particularly so if you fail to meet customer expectations on important attributes.

Customers have expectations of many attributes.

Example: Product quality, service responsiveness, price stability, and the physical
appearance of your people and vehicles.
These are unlikely to be equally important. It is important to meet customer expectations on
attributes that are important to the customer. Online Customers, for example, look for rapid and
accurate order fulfillment good price, high levels of customer service and website functionality.
Dell Computers believes that Customer retention is the outcome of their performance against
three variables: order fulfillment on time, in full, no error, product performance and after sales
service. The comments in parentheses are the metrics that Dell uses.
Kano has developed a product quality model that distinguishes between three forms of quality.
Basic qualities are those that the customer routinely expects in the product. These expectations
are often unexpressed until the product fails.

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