TOPIC 5

CUSTOMER FOCUS
IN THE PUBLIC SECTOR

Quality Improvement Pyramid

Vision
Efficient
Processes

Strategic Plans
Leaders

Staff

Trustworthy
Trustworthy
Trusting of Others
Trusting of Others
Approachable, Inspiring Collaborative, Committed

Quality Improvement System

Trained Staff

Customer Focus
3-2

Teamwork

Recognition
Empowered Staff
Quality Processes

Data Analysis
Problem Solving
Measurement Systems

Identifying Customers

Understanding Customer-Defined
Quality
Giorgio Merli (1990) --- Total Manufacturing
Management
- The customer must be the organizations top
priority
- Reliable customers are the most important --buy repeatedly from the organization and feel the
satisfaction via their purchases
- Customers satisfaction is ensured by producing
high-quality products --- satisfaction implies
continual improvement
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 Customer --- people who interact with the

organization after the processes have produced
the product.
In TQ setting --- customer includes the employees
i.e. those whose work follows that of another
employee and it is dependent on it in some way.
It is easier to identify customers via thinking in
terms of customer-supplier relationships.
Three types of customers --- internal; external and
consumers.
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Identifying Customers
Need/Requirements in the
Public Sector

Internal Customers Needs

Internal customer --- those at the process
level, departments and key cross-functional
processes within an organization
Contribute to organizations mission
Depend on the departments / functions
products / services to ultimately serve
consumers and external customers
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Internal Customers Needs (Cont)

Some fundamental questions need to know:
-

What products / services are produced?

Who uses these products & services?
Who do employees call, write to / answer
questions for?
Who supplies the inputs to the process?

 A matter of ensuring that employees (depend on

one another as individuals) & departments
(depend on each other as units), communicate
their needs to one another continually.
Communication must be encouraged & facilitated.

Improving communication mechanisms --- e.g.

quality circles, cross-departmental teams &
improvement teams.
Facilitate
communication
customers & suppliers.

among

internal
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External Customers Needs

External customers --- those who receive / pay for
the products and/or services
The outsiders who deals with the organization
E.g.: Retail stores are external customers to the
manufacturers of products sold --- Kedai Runcit Ali
& TESCO
E.g.: Students are the external customers to UiTM
& other institutions
Depending on our business process, all of these could be your
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customers.

6-step strategy for identifying external customers needs:

Speculate about the results
Plan how to gather information
Gather information
Analyze the results
Check the validity of conclusions
Take action
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Primary and Secondary Customers

Primary customers: the outputs of the processes are ultimately designed,
developed and supplied for them.
Secondary customers: receive process outputs or are impacted by the
process, but are not the reason that the process exists.
Example:

Process Buying a new car

Primary Customer Buyer
Secondary Customer Salesperson, Service Dept.
Dealership

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Focus on the needs of your Primary Customers

Relationship between Internal &

External Customers
Nature of customer-supplier linkages --build up chain of customers throughout
the organization that connect every
individual & function to the external
customers
--characterizing
the
organizations value chain

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Building Customer
Satisfaction Vs.
Strategizing Customer
Loyalty
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Importance of Customer Satisfaction

and Loyalty
Satisfaction is an attitude; loyalty is a
behavior
Loyal customers spend more; willing to pay
higher prices; refer new clients; and less costly
to do business with.
It costs five times more to find a new customer
than to keep an existing one happy.
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 A firm cannot create loyal customers without first

creating satisfied customers.
Satisfaction and loyalty are influenced greatly by
value, service quality, integrity and the
relationships that organizations build with
customers.
Loyalty can be maintained --- telling the truth to
the customers, whether it is good or bad news.
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Creating Satisfied Customers

Many organizations still focus more on
processes and products from an internal
perspective, rather than taking the
perspective of the external customer.
(producers should look at processes
through the customers eyes, not the
organizations).
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Three Aspects of Customer-Driven Quality:

- Expected Quality
What the customer assumes will be received from the
good or service.
What is the role of producer?
- Actual Quality
The outcome of the process and what is delivered to the
market.
What should be expected by producer?
-

Perceived Quality
Perception by comparing expectations (expected quality)
with actual quality.
What are the consequences?
Perceptions are not always accurate.
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5 principal dimensions contribute to

customer perceptions of Q
Tangibles: Appearance of physical elements
Reliability: Dependable and accurate performance
Responsiveness: Promptness; helpfulness
Assurance: Competence, courtesy, credibility, security
Empathy: Easy access, good communication,
understanding of customer

 Six steps
practices:

for

customer-oriented

1. Define and segment key customer

markets.

groups and

2. Understand the voice of the customer (VOC)

3. Understand linkages between VOC and design,
production, and delivery.

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4.

Build relationships through commitments,

provide accessibility to people and
information, set service standards, and
follow-up on transactions.

5.

Effective
processes.

6.

Measure customer
improvement.

complaint

management

satisfaction

for
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Strategizing Loyal Customer

Theory of loyal customer --- a customer forever.
Karl Albrecht (1998) --- Theory of Service
Relativity:
V=RE
V = Value
R = Results
E = Expectations
The producer needs to go beyond meeting the
expectation --- creating value.

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 Customer Loyalty Model --- 4 components:

- Business performance
Consideration of several factors, i.e. product
quality; service quality; relationship quality;
image strength; and price perception.
-

Global perception
Based on the evaluation of an organization.
Positive --- loyalty.
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Loyalty behaviors
Measured through defection rate of
customers
and
business-volume-bycustomer rate.

Financial outcomes
Affected by several key factors.
Market share; reduced costs; employee
attitudes; profit; and shareholder value.

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Characteristics of a
Customer Focused
Public Organization

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Richard C. Whitely (1991) suggests

characteristics of customer focus.

seven

1. Vision, commitment and climate.

2. Alignment with customers.
3. Willingness to find and eliminate
customers
problem.
4. Use of customer information.
5. Reaching out to customers.
6. Competence, capability and empowerment of
people.
7. Continual improvement of products and
processes.
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Quick Quote

The customer is not an interruption of our

work, they are the purpose of our work.
- Anonymous

3-27

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