Providing Outstanding Value

Every once in a while we run into an incredible value delivery situation and feel compelled to comment. I just had such an experience with a supplier of color printer supplies. These folks obviously know what the critical to quality factors are for their business customers – and they deliver!

I had just tried this supplier of color toner for the first time. After replacing one of my toner cartridges I began having printing problems – streaking of the toner I had just replaced. I contacted the supplier, and they immediately agreed to replace the cartridge – and did so overnight. Unfortunately, the problem continued and I reported back.

This time the supplier began to act like a repair service. They sent me specific files to print to try to assess the problem, They made several suggestions, which we tried – to no avail. Then – get this – they had a working model of my printer in their facility which they disassembled – while instructing me to do the same – in order to diagnose the problem. At this point, they believe that the problem is associated with another part in the printer (the transfer belt, for you technophobes). I expected them to toss the problem back in my lap. Are you ready? They volunteered to send a replacement for the malfunctioning part in order to see if that will solve the problem. And they expect the new part to be here tomorrow (Friday). And they asked if they could call back on Monday to see how things turned out!

Here’s a manufacturer of printer products that clearly understands what drives quality and value from a customer point of view – and they understand that it goes well beyond the physical product itself. As for the physical product – that’s table stakes. So long as they make good products, they’ll remain in the game. How do they differentiate? By understanding those CTQs better than the competition! Do their people and processes deliver the goods? In remarkable fashion! Will they continue to get my business? You bet!

By the way – the name of the company: Media Sciences. And no, I have nothing to do with them other than being a (future) loyal customer.

 

Leveraging VOC

I came across an interesting question at the Customer Management IQ site today that should be of interest to any executive or manager responsible for voice of the customer at their organization. The questioner wanted to know how to leverage her VOC, and whether some customer opinions are more imortant than others. Here’s my $.02:

Her question really has several facets: (1) what type of VOC will be most leverageable? (2) How should that VOC be analyzed? (3) Which customers are most important?, and (4) How do you actually leverage that information? I’ll address those issues in that order.

(1) As you know, there are many types of VOC, ranging from the passive and reactive (complaints) to the more proactive but qualitative (interviews, focus groups) to the proactive and quantitative (surveys and panels). Each serves a purpose, but to truly leverage your VOC it should be proactive, purposive, and quantitative. Moreover, if you really want to leverage your customer information, you should extend VOC to become the Voice of the Market (VOM) – which means that you would be surveying not only your own customers but those of key competitors as well.

(2) Your next task will be to transform that survey data into meaningful metrics. By meaningful, I mean that the resulting metrics should (a) be predictive of future business performance, and (b) provide managerial direction. This will require a shift from the metrics of customer satisfaction to the metrics of customer value. There is now lots of evidence (Gale, Reidenbach, Reichheld, and others) that the metrics of customer satisfaction do not correlate well with business performance. Why would you rely upon a metric that is unrelated to your business goals? The metrics of customer value, on the other hand, have proven to be the best leading indicators of market share – leading to both high levels of customer acquisition and customer retention (loyalty).

(3) Now we get to the crux of the matter: the metrics of customer value are both product- and market-specific. People buying a luxury sedan will define value differently from people looking for a sports car. And the business user of a computer will define value differently than will the typical home user. You want to focus your investment in value metrics on those market segments that are most attractive for your business (they’ll provide the greatest ROI) – and you want to use those metrics to understand value within those segments better than anyone else against whom you are competing. There are some great tools available that will help you identify those high-priority segments.

(4) Finally, you want to be able to truly leverage your value metrics into superior business performance. Those value metrics should enable you to identify competitive performance gaps on those factors that are critical to quality from a market perspective (CTQs, in Six Sigma parlance). The nature of those gaps, whether positive or negative, will point you to the specific product (service), people, or process issues that you can improve to achieve or sustain a competitive advantage. You’ll find some great information on the “how to” in one of our most recent books, “Competing for Customers and Winning with Value.”

 

Six Sigma Marketing: You Can’t Pound a Nail with a Screwdriver

Several writers have commented on Six Sigma Marketing. The major thrust of these comments is focused on how to apply Six Sigma to Marketing. And, while making Marketing and Marketing activities more efficient, Six Sigma Marketing must focus on making Marketing more effective – actually acheiving sales and market share objectives.

Six Sigma Marketing is all about integrating the disciplined, data driven principles of Six Sigma with Marketing’s focus on revenue growth and market share. This integration has as its core the idea of value – creating and delivering the highest quality at the best price. Value has been shown to be the best leading indicator of sales and market share growth.

Six Sigma Marketing accordingly, requires a new set of tools not resident in either Six Sigma or Marketing. In other words, applying the tools of Six Sigma to Marketing will not do the job. You can’t pound a nail with a screwdriver. You have to learn how to use a hammer.

Six Sigma Marketing requires the jettisoning of much of the conventional wisdom surrounding both Six Sigma and Marketing. Chief among the ideas that have to change is the reliance on customer satisfaction as the principle metric. Satisfaction has little, if any, linkage to changes in sales and market share. Consequently it makes little sense to rely upon customer satisfaction as the strategic goal since it does not impact either sales or market share. Customer value does.

Market Value Solutions has been practicing Six Sigma Marketing for about ten years and experiencing significant successes. The tools of Six Sigma Marketing are powerful and provide a clear guidance for growing sales and share. No longer does Marketing have to be agenda driven or based on company lore. Six Sigma Marketing is driven by the voice of the market (VOM) and not the VOC (voice of the customer).

In subsequent blogs I will be discussing several other points of departure between Six Sigma Marketing and Six Sigma and Marketing as it is currently practiced.

For more information on Six Sigma Marketing contact Dr. Eric Reidenbach at Eric@marketvaluesolutions.com or call 601 213 4849. Dr. Reidenbach is the author of the soon to be released book, Six Sigma Marketing, to be published by ASQ’s Quality Press.

 

The Black Belt and Six Sigma Marketing

(With apologies to Lewis Carroll, the Walrus and the Carpenter)

“The time has come,” the Black Belt said,
“To talk of many things:
Of Markets, and value and quality
OF Six Sigma Marketing,
Why we are short of projects
And, how to move away from simple cost cutting.”

“But wait a bit” the CEO cried,
“Our market share is low
With poor quality and poor value
How are we to make our sales grow?”
“No worries” said the Black Belt
“Six Sigma Marketing is clearly the way to go!”

“The Voice of the Market,” the Black Belt said
“Is what we chiefly need-
Value and value tools besides
Are very handy indeed…
Now if you’re ready, O Six Sigma team
Let us plant, grow and nurture the SSM seed.”

“But lose the VOC?” the team cried
Turning a little blue,
“After such a long dependence, that would be
A very radical thing to do.”
“The path is clear,” the Black Belt said
For now, more than ever, we need the market view!”

“But what of DMAIC?” all the lesser belts did cry,
“Or the 4Ps?” the diffident marketers whined.
“No sweat” said the Black Belt
“Six Sigma and Marketing are now aligned.
It’s time for us to change,
For Six Sigma Marketing – this is the exactly time.”

“Six Sigma Marketing” the Black Belt said
“Is what we need to do.
Forget the cost cutting
Instead, let’s concentrate on revenue.
It’s time to think externally
And how we can create and deliver superior value.”

“O defect reduction”, the Black Belt intoned,
“You’ve had a pleasant run.
Let’s turn our face to market share
And start to count the mun!
With Six Sigma Marketing our success is guaranteed
Our superior value will put all of our competitors quickly on the run.”

For information on Six Sigma marketing contact Eric Reidenbach at eric@marketvaluesolutions.com or 601 213 4849.

 

Six Sigma Marketing

How many Six Sigma practitioners have been successful in migrating Six Sigma practices to marketing? Why have Six Sigma writers so often thought about the two “disciplines” as water and oil, art and science, fire and water and all of those other comparisons that express an incompatability? What are the success factors in merging the two? What will doom the integration? I am not talking about making marketing activities less expensive or making Six Sigma more “customer friendly”, but rather a full scale integration to create a new type of marketing and an extension of Six Sigma.

I know there is growing interest in this topic and would like to use an “open source” approach for discussing it. Let’s start a conversation regarding Six Sigma and Marketing and begin to explore some of these issues. As a start, you might want to read a couple of whitepapers that I have come across:

The Quest for Quality: Applying Six Sigma Principles to Marketing
The Power of Six Sigma and Marketing: Increased Marketing Effectiveness

Both of these whitepapers are free at www.Tocquigny.com.

 

Six Sigma Enthusiasts: Input Needed

Please take a few minutes right now to participate in iSixSigma’s latest survey about Six Sigma and VOC. This survey will explore the Voice of the Customer as it relates to a Six Sigma initiative. To participate, click on the link below:

http://www.isixsigma.com/vocsurvey

All responses will remain absolutely anonymous and confidential. Your information will be reported only in an aggregate fashion so that no one will be able to link your response back to you.

This survey will close soon. Please participate today. Here’s that link

again:

http://www.isixsigma.com/vocsurvey 

 

Actionable survey instruments

Several days ago, an anonymous reader posted a pretty basic, but important question on the iSixSigma forum and was seeking assistance.  Basically, the reader was seeking to create an actionable survey instrument, was wondering about the utilty of an “importance-satisfaction” approach, and was looking for additional information on scaling and analyses.  Several readers provided helpful advice, with one especially helpful response from George Chynoweth. That said, most of those who responded seemed to overlook 4 critical questions underlying the original question:

1.  Are the metrics of customer satisfaction the right ones to be using for actionable results?

2.  What are the benefits/drawbacks to the importance/performance paradigm?

3.  What’s the best source of questions for a survey?

4.  What types of analyses will produce the most actionable results? (relates back to issue #1)

The answers to these questions are so critical to the original question that I include my responses here.

1.  The metrics of customer satisfaction have repeatedly been shown to lack a substantive connection to business results (see Reichheld.  See also Reidenbach.)  People make purchase decisions – whether buying pizza, cars, insurance, or tractors – based upon their perceptions of the value received.  And perceived value is a function of perceived quality relative to perceived price.  This interaction of quality and price (plus image) is simply not addressesed with the metrics of satisfaction.  For that, you need the metrics of value.

2.  There are several problems with the importance/performance paradigm.  One of those was addressed in the original iSixSigm thread,, namely, the issue of respondent fatigue and attrition.  Another has to do with the distinction between qualifiers and determiners.  Qualifiers are “table stakes: typically very important, but typically not a source of differentiation.  Airline safety would be a good example: very important, but probably not worth investing for differentiation.

3.  I applaud the suggestion by QualityColorado to couple surveys with focus groups, but would differ on the timing.  Focus groups (and/or customer interviews) should be the source of your survey questions.  For more information on designing good questionnaires based on value, I’d recommend the ASQ publication, Strategic Six Sigma for Champions: Keys to Sustainable Competitive Advantage, especially chapters 4 – 6.

4.  Finally, the anonymous questionner was correct in assuming that one of the primary analytical tools will be regression-based.  But, for a market-focused definition of CTQs, you’ll need to precede your regression analyses with factor analyses.  Then you’ll need to identify specific competitive value performance gaps – whether positive or negative – because these gaps will serve as the starting point in identifying and prioritizing Six Sigma projects.  Chapters 1 – 3 of Strategic Six Sigma for Champions will explain just how that works

If you’d like more information regarding the issues you’ve raised, or have additional questions, you can contact me offline.  Providing your organization with the type of information that can drive both competitive strategy and significant process improvements will make your services invaluable.