In the previous two blogs I have outlined a couple of issues that Six Sigma practitioners should consider when trying to capture buyer input. Let me conclude this focus on customer satisfaction versus customer value with a couple of final thoughts regarding methodology. My intent is not to turn Black Belts into market researchers but to make them more informed buyers of buyer information.
Most companies that rely on customer satisfaction often engage marketing research firms to obtain the measures. These firms, not all mind you, rely on an overly simplistic methodology that results in information that has little actionability.
First, some pay little attention to market segments and instead group all customer groups into one large aggregated sample. This ignores the differences in markets and segments and provides information that is too general to Six Sigma practitioners. It lacks actionability and provokes questions such as “What are we supposed to do with this information? How can I use this? There’s just not sufficient resolution in the information.
Second, many research firms rely on stated importance asking buyers “Please indicate how important each factor is to you”. They respondent is then given a long list of attributes and surprise, surprise, price surfaces as one of the most important attributes. This immediately causes everyone to focus on those elements that affect price, namely costs, and sends them on a cost cutting frenzy. This approach ignores the interaction between price and the different quality factors (CTQs) and fails to recognize that for higher levels of quality, buyers are willing to pay more. Mercedes Benz, BMW, Chanel, and other high end companies recognize this. Moreover, as I have pointed out in other blogs, cost cutting without understanding how buyers define value can lead to the cutting of those costs that actually are important to the organization’s value proposition.
Third, many organizations survey only their own customers. This provides them with the VOC when, in fact, they need the VOM (voice of the market). Market share is a competitive dynamic that can only be explained in the give and take of action and reaction by competing organizations. If you know that your score on “responsiveness” is a 7.8 on a 10 point scale – is this good? What if I tell you that your key competitor is scoring a 9.2 on the same 10 point scale? How does this alter your response? In this same vein, many Six Sigma practitioners refer to internal stakeholders as customers. Now accountants, IT personnel, shippers, etc. become customers. This leads to confusion and waste since there is no real line of sight to the market. The only real customer is the one who pays for the product or service.
Finally, long lists of attributes are unlikely to surface the real critical-to-quality factors. What does “responsiveness” mean? Put ten Black belts around a table and I would bet you come up with ten different definitions of “responsiveness”. How can this identify and direct projects designed to enhance the organization’s responsiveness? These CTQs are the factors that Six Sigma practitioners need to focus on if they are to be able to make changes in the organization’s competitive value proposition and drive positive changes in market share.
Six Sigma Marketing has evolved in response to these weaknesses, those identified in the customer satisfaction methodology and those inherent in the concept of satisfaction and its lack of linkage to market performance. SSM provides a solid, market driven approach for turning the power and discipline of Six Sigma on those issues that drive market performance. It does so by using the VOM to drive initiatives that leverage the organization’s competitive value proposition into greater market share and growing top line revenues.