Social scientists have established the critical importance of customer satisfaction and customer loyalty. Hansemark and Albinsson (2004) define customer satisfaction as “an overall customer attitude towards a service provider, or an emotional reaction to the difference between what customers anticipate and what they receive, regarding the fulfillment of some need, goal or desire”. Anderson and Jacobsen (2000) define customer loyalty as “the result of an organization creating a benefit for a customer so that they will maintain or increase their purchases from the organization.”
The Six Sigma strategy aims at improving business processes by eliminating mistakes and improving quality. The pioneers adopted a customer-oriented approach covered in four basic steps to achieve process improvement, and met with remarkable success. The four major steps are:
- Quantifying what satisfies the customer
- Identification of the gap between customer needs and the organization’s current performance level
- Analysis of reasons on why such gaps exist
- Devising methods to remove such gap
Such a customer oriented Six Sigma approach helps organizations:
- eliminate mistakes
- enhance product quality
- innovate products
A major thrust of Six Sigma lies in elimination of mistakes by doing things right the first time. A customer oriented approach enables the project team to direct energies and provide solutions in areas that matter.
In projects for the service sector, the process has a direct impact on the customer, and understanding what satisfies the customer helps to remove mistakes that matter. For instance, attempting to improve scheduling appointments for doctors in hospitals would yield better results with an understanding of what satisfies the patients. If patients identify having to wait for long as a major issue, the Six Sigma initiative tries to identify ways to improve the existing process of scheduling appointments to reduce waiting time for patients.
For projects related to the assembly line, a mistake may directly influence the customer and may nevertheless add to the cost or have an impact on quality, influencing customer satisfaction and customer loyalty in a big way. For instance, a project focused on the product rather than customer satisfaction might quicken the product delivery time by altering the packing process. However the altered packing might affect the durability of the product, leading to customer dissatisfaction. Starting the project by understanding the customer preference for durable products would help the Six Sigma project team identify ways to improve product delivery without affecting durability.
Six Sigma’s focus on customer satisfaction allows the organization to make better quality products and improve customer loyalty in the long run. A product-focused approach benchmark the product against the competitor’s products to match such levels or slightly exceed them. A customer-focused approach on the other hand strives to understand what the customer requires and drives the organization to develop the product to match or exceed such requirements.
General Electric (GE) invested $300 million for its Six Sigma initiative in 1995. This resulted in a direct savings of $400 to $500 million by elimination of waste, and also provided an additional $100 to $200 million of incremental margins due to increased customer loyalty.
Six Sigma drives innovation. An organization that understands what customers want but finds no way to eliminate mistakes or improve current processes to match customer expectations tends to innovate and bring out new products or processes to retain the customer.
In today’s highly competitive world, understanding what the customers want is the key to remaining in business. Leading global companies such as Motorola, General Electric, Allied Signal, and Citibank have all benefited from the application of Six Sigma project customer satisfaction. The resultant increase in customer loyalty, introduction of new products, and leverage of market position saves millions in costs.
- Douglas, P. C. “Six Sigma’s focus on total customer satisfaction". Journal for Quality and Participation. Retrieved from findarticles.com on 04 May 2010.
- Motorola Six Sigma Black Belt Program. Motorola University.
- Singh, Harkiranpal. (May 2006) The Importance of Customer Satisfaction in Relation to Customer Loyalty and Retention.
Image Credit: N Nayab