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Improving Customer Satisfaction and Profit At The Same Time — Possible?

By Bob Prosen    

 

It’s one thing to outspend your competition when it comes to improving customer satisfaction.

It’s quite another to do this while maintaining your bottom line, and in fact enhancing it.

With all the investments made in Operational Excellence and quality processes over the years, you would think small business would have this well in hand.

Yet when small business leaders are asked about improving customer satisfaction and how many of them have defined processes in place to reduce inefficiencies and rework, very few do.

I believe the reason for this is that leaders don’t know which tools to use or how to use them to get results without getting bogged down in the process.

My philosophy is to keep things simple!

A Simple Solution For Improving Customer Satisfaction

One of the most effective ways to improve quality, customer satisfaction and profit is to implement a robust quality process that utilizes root-cause analysis (RCA) and irreversible corrective action (ICA).

These techniques enable you to eliminate inefficiencies and reduce rework by doing the right thing the first time.

Done well, more projects will meet customer expectations, be completed on time, within budget and with little to no rework.

Now that’s nirvana for a small business owner.

Root Cause Analysis:

RCA in its simplest form means identifying the root cause of problems and inefficiencies instead of dealing with symptoms.

Let’s look at a quick example.

The symptom associated with a customer complaint might be that a delivery date was missed.

The root cause was a product shortage that your purchasing department knew about but either failed to obtain approval to replenish that shortage, or give advance notice to the customer.

By addressing the symptom, you’ll apologize to the customer and possibly issue some form of credit, leaving yourself open for the same problem to happen again.

However, if you identify the root cause and implement ICA by training the purchasing department and updating the process, you will prevent the same problem from recurring. The protocols you set from those previous mistakes will also go a long way towards improving customer satisfaction and avoiding unnecessary costs going forward.

Irreversible Corrective Action:

ICA ensures that the root causes of problems are resolved so they never occur again.

Here’s another example that I encountered personally.

The web hosting company I ran had a number of network failures that denied customers access to their vital systems. When this happened, it seemed easy to pat ourselves on the back after restoring service in record time.

Instead of a two-hour outage, we reduced it to a one-hour outage. Yet from the customer’s perspective, the time differential meant nothing. The customer didn’t want any kind of outage!

So, we began by looking at what caused that problem.

Was it hardware? What specific component failed? Was it a procedure that didn’t work? Or was it a training problem? We were determined to find the root cause instead of dealing with symptoms.

We realized that, while potentially tedious and time consuming initially,  this approach would lead to improved customer satisfaction and lower costs.

Long story short, we found the root cause of the outage, implemented ICA and shortly thereafter led the industry in network availability.

It turns out the root cause was a combination of ineffective change-management procedures and inferior network architecture. ICA involved documenting processes, training, and installing some additional hardware.

Eventually we ran the entire company using these problem-solving techniques because they turned out to be so successful.

Once we had enough results to back up our success, we invited customers to see our quality processes in action which translated into more sales, better service, and, ultimately, higher customer satisfaction.

Making continuous process improvement and zero defects the standard instead of the exception has allowed companies such as FedEx to differentiate and dominate their market.

So I have a simple question for you.

What is your company doing to remedy the holes in your processes and services so that you are always working towards improving customer satisfaction and increasing profit?

Areas You Can Implement These Changes In Your Business

Another proven way to make problem elimination a part of your culture is to hold recurring operations reviews with your business leaders.

Conversation during these reviews should focus solely on how RCA and ICA are being used to accomplish these goal. Let the numbers do the talking. You’d be surprised by what they reveal about your organization’s level of understanding and accountability.

Here are some areas that your business will benefit greatly from RCA and ICA analysis:

• Customer service calls

• Billing errors

• Employee productivity

• Accounts receivable

• Project completion time and budget

• Improving customer satisfaction

• Employee turnover

Couple RCA and ICA with increased accountability and watch your organization’s effectiveness, efficiency and customer satisfaction improve!

What is your company’s biggest shortcoming when it comes to root-cause analysis (RCA) and irreversible corrective action (ICA)? What are some ways that your business can take action immediately to not only improve customer satisfaction as an overarching theme, but also improve profits as a result?

I’d love to hear your thoughts and comments below.

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Comments

One Response to “Improving Customer Satisfaction and Profit At The Same Time — Possible?”
  1. Sam Blumen says:

    Bob,

    In October of 2002 I was fortunate enough to work for a company that engaged you for a series of consultations on business practice management and quality improvement in a service delivery industry. I have kept my hand written notes from those sessions. Your training on RCA / ICA as well as the techniques for effective implementation have served me and my clients very well for now over a decade. By following your strategies and producing operational consistency, we have been able to repeatedly provide stunning improvements to our operations and our clients operations. As a result we have demonstrated improvements in efficiency at the same time significantly reduced recurring issues that create 90% of “the noise”. By reducing the overall “noise level”, we have been had more quality time to focus on the actionable tasks that really count.

    I thank you often and tell people regularly about the gift of knowledge and your expertise in transferring those techniques in a substantial and lasting manner.

    My most enduring appreciation to you,

    Sincerely,
    Sam A Blumen – Operations Director / IT Infrastructure Manager

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