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Customer Satisfaction at Lower Cost

(illustration - piggy bank)

"Consumers are expected to cut out more 'wants' in favor of 'needs'," reported a newspaper recently. [Ann Arbor News, Jan. 4, 2009]

Businesses all over are being tested in this tough economy. Many are teetering on a strategic tight rope. On one hand, they feel they need to cut costs in every direction and curtail any new activities that require investment. On the other hand, they know that bare-bones products will not be competitive enough to allure even in this poor economy. They may lose their innovative edge to competitors if this delicate balancing act dips even a little.

Is it possible to reduce cost and still ensure customer satisfaction? How do you determine what product features can be reduced, what functional levels must be maintained, and which projects can be postponed or must be added -- in a manner that least affects the quality, project goals, customer satisfaction, and the bottom line? In other words, how can you distinguish between the nice-to-have 'wants' and the absolutely must-have 'needs' in your customer's mind?

"This is really an issue of priorities. They can be effectively resolved by utilizing AHP (Analytic Hierarchy Process) in your QFD analysis." [Mazur 2009]  If you have been using Modern Blitz QFD® tools on your project, you need not start from scratch. You can revisit the Customer Voice Table with your team and update the customer needs hierarchy to reflect changing customer priorities and market conditions. If you have not been trained on Modern QFD, this is a good time to pick it up.

Take advantage of the economic slowdown for this educational and career enhancing opportunity. The concise yet powerful new tools that you will learn in the QFD Green Belt® Course are much more efficient than the House of Quality matrix and so versatile that many six sigma black belts are revising their methods. Prioritization and decision-making are vital topics in any organization. Is there a better way to evaluate wants vs needs, than considering them different classes of data, which is often seen by those still doing traditional QFD?

The key is to get customers to prioritize solution-independent needs. Why? Because frequently customers think a particular feature will address their need based on certain unvoiced assumptions they hold. And frequently, the customer gets it wrong. By getting the customer to prioritize what they know better than we do, i.e., their needs, not only do we get better information, but we can then determine the features and technology that will best fulfill those needs at a price the customer is willing to pay.

"Put another way, in tough economic times, Blitz QFD® can help assure that the feature and technology costs of the product are things that satisfy the customer. The customer will not pay $100 to solve a $10 problem, but they might pay $99 to solve a $100 problem. Until we know the priority of the need based on the magnitude of the customer's problem, we cannot know what features to offer or delete." [Mazur 2009]

Now, can we integrate this thinking with Dr. Kano's model? This model was originally used to classify product features in terms of level of fulfillment and level of satisfaction. Dr. Kano's research team was challenging the engineering assumption that the more performance or functionality a feature provided (# of automobile transmission gears, for example), the more satisfied they would be. What he found was that instead of a one-dimensional relationship of 'the more, the better,' in fact there were two-dimensional relationships as well, where greater fulfillment resulted in tapering satisfaction (expected) and where less fulfillment did not increase dissatisfaction (exciting).

"I believe Kano's model can be applied to customer needs as well as features. Better yet, New Kano Model techniques would be stronger... But the survey techniques need to be modified. And when applied to needs, there are interesting market segments that can be extracted. Some of these segments are based on traditional demographics, but others can be related to affordability and priority of needs. This is especially true in this struggling economy where we must make sure high priority needs are fulfilled. For example, the raw Voice of Customer (VOC) data for a new vehicle might include "I want good fuel economy," "I want a roomy car," and "I want a car that pollutes less." Are these VOCs customer needs or are they product features? ... If we ask the customer to prioritize these features, it would not be unusual for them to say they all are important." [Mazur 2009]

"In Blitz QFD®, we will translate the VOCs into true customer needs. Using AHP, the customer can then give us a more accurate sense of their priorities, and depending on the results, we can find innovative ways to deliver solutions at a price they are willing to pay.  "If a car manufacturer used AHP and Blitz QFD®, they would know not only which of the three VOC was the top priority at any given time or in any given segment, but also how close the second priority was to the first priority and the third to the second. This would help them predict the tipping point to make a better strategic decision early on, and then allocate their resources and development schedule to more quickly react to changing market and economic conditions. You would not be able to do this easily by using the traditional QFD."

An excellent example of such use of Modern QFD was presented by Blue Cross Blue Shield of Florida at the 2008 Symposium. In health care, the challenge is to balance conflicting stakeholder interests and business goals. In government, difficult budget decisions will affect service levels and economic development policy.

Modern QFD offers excellent tools for such complex decision-making with little more than fuzzy cognitive data, by identifying spoken and unspoken true customer needs, building hierarchy of these needs to get true customer prioritization, and then determining what, if any, trade-offs must be addressed. AHP provides the mathematical and logical validation to open up a wider range of discussions about the customer needs and experience.

Without this clear prioritization, decisions may become skewed by customers' assumptions that can blind you to alternative solutions that may turn into be a viable business opportunity in these challenging times.

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