Customer Experience Metric

Our newsletters provide information on business management systems and process improvement methods. These systems include our services such as ISO 9001 Management System, AS9100 Aviation, Space and Defense, TS 16949 Automotive, ISO 27001 Information Security, ISO 13485 Medical Devices, and ISO 14001 Environmental Management Standards, and more!
Further subjects include methods of performance improvement such as Six Sigma, Lean Enterprise, and other topics of interest to our readers.
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Customer Experience Metrics
While supply chain organizations have a variety of internal metrics in place, supply chain leaders must also take into consideration the customer experience, according to Gartner, Inc. a leading research and advisory company.
Supply chain leaders spend a lot of time working to understand and improve their internal operational metrics, but they rarely take the time to understand their impact on the customer.

That’s why it’s important to introduce customer experience metrics into the supply chain scorecard. For example, the customer is more interested in having an item delivered on the requested day and time than having it shipped on time. So, the first step is to define and measure your success using the same metrics as your customer does.

According to a Gartner survey among customer experience leaders, more than 60% said that their most important priority was to develop customer experience metrics and integrate them across all business units. The following three are a good starting point as customer-centric metrics suitable for the supply chain organization.

Customer Satisfaction (CSAT)
To determine the CSAT, customers are asked to rate their satisfaction with a product, solution, or service. The questions are often not standardized making benchmarking difficult. One option is to leverage the American Customer Satisfaction Index (ACSI). With the ASCI, it takes on average five years for a company to move by 1%. The score movement for a single company is often less than 2% in a decade, which means that benchmarking against industry peers is more important than trying to improve the score. Don’t make any short-term commitments, as the movement is very slow. Instead, use the index to benchmark against your industry peers and see how you compare.

Net Promoter Score (NPS)

The purpose of the NPS is to determine if the customer is an advocate to drive growth and would recommend a specific product or service. While companies should always aim for a high score, it’s important to note that there are cultural differences to consider. For example, in Europe and other countries it’s less common to give the highest rating for a satisfying experience than in North or Latin America. Don’t be surprised if the same product or service produces different NPS in different regions.

Customer Effort Score (CES)

This score works best in a service environment and measures how easy it is for the customer to do business with an organization, or to handle an issue. Customers can, for example, rate how a return process was handled or how fast they were able to talk with a customer service agent.
Investments in customer experience can take a couple of years to pay off in terms of increased customer loyalty. To help build the business case, look at metrics such as cost of service or compensation costs. These can help to justify the move to more customer-centric practices.
Outsourced Process Controls
What is considered an outsourced process? It can be described as a process that has been identified as needed for the quality management system, but one which the organization has chosen to be carried out by an external party.
An outsourced process can be performed by a supplier that is totally independent from the organization, or which is part of the same parent organization.

For example, a separate department or division not subject to the same quality management system. The process may be provided within the physical premises or work environment of the organization, or at an independent site. The nature of this control will depend on the importance of the outsourced process, the risk involved, and the competence of the supplier.

There are two situations that frequently must be considered when deciding the appropriate level of control of an outsourced process:

1. When an organization has the competence and ability to carry out a process, but chooses to outsource that process (for commercial or other reasons), the process control criteria should already have been defined and can be transposed into requirements for the supplier, if necessary.

2. When the organization does not have the competence to carry out the process itself, and chooses to outsource it, the organization has to ensure the controls proposed by the supplier of the outsourced process are adequate. In some cases, it may be necessary to involve external specialists in making this evaluation and/or conducting an onsite supplier audit.
It most cases, it is necessary to define some or all of the methods to be used for control of the outsourced processes in a contract between the organization and the supplier. To audit the outsourcing of your processes, you should be asking these types of questions:
  • Have any processes been outsourced?
  • What is your criteria for outsourcing?
  • How are the suppliers being evaluated?
  • Are relevant requirements assigned?
  • What outsourcing controls are in place?
  • How is risk considered in the controls?
  • How is supplier performance evaluated?
  • How are supplier problems handled?
A robust supplier nonconforming product process is also a must to ensure not only supplier accountability and proper disposition decision making, but also to be used as an effective method for conducting a supplier re-evaluation process with specific measurable objectives used.
Desired Problem-Solving Behaviors
No matter what type of product or service you deliver, we all have customers, and you are the supplier. Our decades of experience has taught us that too many organizations exhibit poor and inconsistent behavioral methods when it comes to the direct customer overall experience.

The following Desired Problem-Solving Behaviors for Suppliers should be your modus operandi:

1.   Know the details of how your product works in the customer’s process and product. Know how the failure modes of your product affect the customer. For a given thing that goes wrong with your process or product, what is the exact effect on the customer?
2.   React quickly to a customer notification. Suppliers should take a customer notification of a problem as an alarm for their organization. Containment should be a priority, with all investigation started after containment is achieved.
3.   Be sure to obtain as much detail from the customer as possible. Make sure you listen to your customer for the details of what is occurring. Make requests for data, samples, or further agreed upon objective evidence.
4.   Develop a plan for the problem-solving efforts and stick to it. Be realistic with your customer on the time frame that is needed for a thorough investigation and resolution of the problem. Once a plan is developed and agreed to, the timing must be considered sacred.
5.   Communicate with your customer regularly on the status of the problem-solving efforts. Make sure your customer knows exactly where you are in the problem-solving process. Ensure that your customer understands all that is being done, including verification of containment measures as the process proceeds.
New Year = Improved Performance
At year end, many businesses are rolling their sleeves-up developing revised management strategies and seeking methods for driving improved business performance in the coming year. Successful organizations understand that to thrive in an ever-changing business environment, they must identify key risks and opportunities to realize competitive gains.

A recent Best Practices Study focused on understanding leading practices and approaches for successful performance improvement.

 Identifying Actionable Measures 
  1. Have senior management analyze business processes that have the greatest impact on strategic organizational imperatives. 
  2. Use collaboration systems that allow direct stakeholder feedback, and link measures to specific business processes.
  3. Align individual employee measures with departmental performance measures.
  4. Use a balance of leading and lagging indicators.
  5. Use fewer than 5 measures to access each business process. Include a diverse blend of cost, efficiency, and quality measures.  
Effective Measurement Through Staff Buy-In
  1. Involve staff in developing the measurement system, and provide employees with a documented road map of the measurement process and outcomes.
  2. Include process measures as part of performance appraisals, and connect measures with compensation.
  3. Use a variety of techniques (meetings, dashboards, scorecards) to communicate the importance of measurement to all employees. 
  4. Involve executive staff in communicating with employees about measurement. 
Success Factors
There are five factors that the best-practice organizations use to create successful measurement systems.
  1. A business process management (BPM) center of excellence.
  2. Strong alignment of the organization’s measures with its strategic objectives.
  3. Compensation and rewards linked to the achievement of metric targets/results.
  4. A process to provide measurement data to employees doing the work being measured.
  5. A culture of accountability for measures and results, and a centralized group responsible for analytics.     
Effective information is needed to focus attention on desired behaviors and results. Contributing employees at all levels need information that is sufficiently complete, accurate, and consistent in order to demonstrate results and be given the ability to focus on outcomes.
Certification Success
Congratulations to our client Phoenix Cable, Inc. for achieving certification to the ISO 9001:2015 Standard!! Phoenix Cable, Inc. (PCI) has been manufacturing custom cable and wire harnesses for twenty-six years. RF Cable Assemblies are one of their key specialties. Quality preparation and termination tooling combined with skilled assemblers with years of cable assembly experience enables them to offer customers a variety of precision coax cable assemblies. 

For more information and products visit the Phoenix Cable, Inc. Website.

Training Courses
Due to COVID-19 Virus course scheduling is currently suspended. Let us know if you have a future onsite Year 2021 training need, we can deliver! Stay Safe.

All courses can be delivered at your company or at our training centers. We do provide training beyond our home state of Arizona. Click on the course title for description, schedule, registration and payment. Group discounts are available. We also provide custom designed training to fit your specific needs. All training is fully documented for your training records and certificates of training are awarded.

Make a Difference in 2021!
At this time of year it is natural to reflect on your annual performance and set personal and business goals for the upcoming year.

The question is what kind of results do you want to create for yourself and your business? Do you have customers coming back for more of your product or service? Do you have a set of ideal customers you want to cultivate? Are your business processes in control and capable of producing what you and your customers require on a continuous basis?

The demands of today’s business environment have caused many of us to shift our approach from thinking as a professional to acting as an entrepreneur. Avoiding past mistakes and taking the time to plan your next moves can make the difference between an exceptional year, and a mediocre year for you and your organization.

Being Generic. Do you act, look, and sound like your top competitor? Sales material, customer approach, support center processes, website content, all similar? Look for an edge that breaks you away from the rest of the herd.
Happy Holidays and All the Best of the Coming Year!!
Best regards,
Walter Tighe and SES Team  

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