Linking Customer and Employee Satisfaction to the Bottom Line

Morris Wilburn, Derek R. Allen

Description

Most organizations recognize the impact that both customer and employee satisfaction have on overall financial performance. Actually acting on that information is the hard part. That is the focus of Linking Customer and Employee Satisfaction to the Bottom Line, which focuses on the relationship between customer satisfaction and tangible business outcomes like market share, revenue, and profitability. Intended for advanced service quality managers and marketing researchers with more than a modest exposure to statistical data analysis, this book provides a comprehensive overview of how these data may be related to critical business outcomes. Perhaps more importantly, researchers with mature customer satisfaction systems may use the techniques described in this book to maximize the value of their existing programs. While no technique or methodology can guarantee a strong link between customer satisfaction and key business outcomes, this book can ensure that appropriate scales, variables, and assumptions are used.

Sujets

• Gestion et management
• management
• Economics
• Business

Informations

• Publié par: ASQ Quality Press
• Date de parution: 30 juin 2002
• Nombre de lectures: 0
• EAN13: 9780873899475
• Langue: English
• Poids de l'ouvrage: 1 Mo

Extrait

Linking Customer and Employee Satisfaction to the Bottom Line A comprehensive guide to e s t a b l i s h i n g the impact of customer and

Derek R. Allen & Morris Wilburn

Linking Customer and Employee Satisfaction to the Bottom Line

Also Available from ASQ Quality Press:

Analysis of Customer Satisfaction Data Derek R. Allen and Tanniru R. Rao

ustomers,

Customer Centered Six Sigma: Linking C and Financial Results Earl Naumann and Steven H. Hoisington

Customer Satisfaction Measurement Simplified: for ISO 9001:2000 Certification Terry G. Vavra

Process Improvement,

A Step-by-Step Guide

Improving Your Measurement of Customer Satisfaction: A Guide to Creating, Conducting, Analyzing, and Reporting Customer Satisfaction Measurement Programs Terry G. Vavra

Measuring Customer Satisfaction: Survey Design, Use, and Statistical Analysis Methods, Second Edition Bob E. Hayes

The Trust Imperative: Performance Improvement through Productive Relationships Stephen Hacker and Marsha Willard

Customer Satisfaction Measurement and Management Earl Naumann and Kathleen Giel

Performance Measurement Explained: Your State-of-the-Art System Bjørn Andersen and Tom Fagerhaug

Value Leadership: Michael C. Harris

Designing and Implementing

Winning Competitive Advantage in the Information Age

To request a complimentary catalog of ASQ Quality Press publications, call 800-248-1946, or visit our Web site at http://qualitypress.asq.org .

Linking Customer and Employee Satisfaction to the Bottom Line

A Comprehensive Guide to Establishing the Impact of Customer and Employee Satisfaction on Critical Business Outcomes

Derek R. Allen and Morris Wilburn

ASQ Quality Press Milwaukee, Wisconsin

Linking Customer and Employee Satisfaction to the Bottom Line Derek R. Allen and Morris Wilburn Library of Congress Cataloging-in-Publication Data Allen, Derek R., 1959– Linking customer and employee satisfaction to the bottom line: a comprehensive guide to establishing the impact of customer and employee satisfaction on critical business outcomes / Derek R. Allen and Morris Wilburn. p. cm. Includes bibliographical references and index. ISBN 0-87389-501-0 1. Consumer satisfaction. 2. Job satisfaction. 3. Industrial management. 4. Success in business. I. Wilburn, Morris, 1953– II. Title. HF5415.335 .A433 2002 658.3'1422—dc21 2002001314 © 2002 by ASQ All rights reserved. No part of this book may be reproduced in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. 10 9 8 7 6 5 4 3 2 1 ISBN 0-87389-501-0 Acquisitions Editor: Annemieke Koudstaal Project Editor: Craig S. Powell Production Administrator: Gretchen Trautman Special Marketing Representative: David Luth

ASQ Mission: The American Society for Quality advances individual, organizational, and community excellence worldwide through learning, quality improvement, and knowledge exchange.

Attention Bookstores, Wholesalers, Schools, and Corporations: ASQ Quality Press books, videotapes, audiotapes, and software are available at quantity discounts with bulk purchases for business, educational, or instructional use. For information, please contact ASQ Quality Press at 800-248-1946, or write to ASQ Quality Press, P.O. Box 3005, Milwaukee, WI 53201-3005. To place orders or to request a free copy of the ASQ Quality Press Publications Catalog, including ASQ membership information, call 800-248-1946. Visit our Web site at www.asq.org or http://qualitypress.asq.org . Printed in the United States of America Printed on acid-free paper

QualityPress 600N. Plankinton Avenue Milwaukee,Wisconsin 53203 Call toll free8002481946 Fax 4142721734 www.asq.org http://qualitypress.asq.org http://standardsgroup.asq.org Email: [e-mail]

Table of Contents

ListofFigures . . . . . . . . . . . . . . . . . . . . . . . . . . . ix Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xv Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . xvii Chapter1 WhyCustomerSatisfaction? . . . . . . . . . . . . 1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 DerivingAttributeImportance . . . . . . . . . . . . . . . . . 5 MeasurementIssuesandCustomerSatisfaction . . . . . . . . 6 AlternativestoCustomerSatisfaction . . . . . . . . . . . . . 9 CustomerValueversusCustomerSatisfaction . . . . . . . . . 10 CustomerLoyaltyversusCustomerSatisfaction . . . . . . . 11 TheFutureofCustomerSatisfactionResearch . . . . . . . . 15 Chapter 2 Employee Satisfaction and Related Phenomena . . Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 PotentialEffectsofEmployeeSatisfaction . . . . . . . . . . 18 SomeAdditionalCommentsonPreviousWork . . . . . . . . 18 DimensionsofSatisfaction . . . . . . . . . . . . . . . . . . . 20 OverallEmployeeSatisfaction . . . . . . . . . . . . . . . . . 23 Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . 24 MarketOrientationandServiceClimate . . . . . . . . . . . . 26 Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

v

17

vi

Table of Contents

Chapter3 TheSixSigmaApproach . . . . . . . . . . . . . . 33 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 TheSixSigmaProcess . . . . . . . . . . . . . . . . . . . . . 37 SixSigmaTools . . . . . . . . . . . . . . . . . . . . . . . . 39 QualityFunctionDeployment . . . . . . . . . . . . . . . . . 41 LinkingSixSigmatoFinancialPerformance . . . . . . . . . 46

Chapter4 TheCustomerSatisfaction–ProfitLink . . . . . . 51 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 LinkingSatisfactiontotheBottomLine . . . . . . . . . . . . 54 AnInterveningVariable: CustomerRetention . . . . . . . . . 55 The Impact of Customer Satisfaction in a Healthcare Setting . . CustomerSatisfaction, Share, andProfitability . . . . . . . . 59 A“ReturnonQuality” Model . . . . . . . . . . . . . . . . . 61 TheACSIStudy . . . . . . . . . . . . . . . . . . . . . . . . 64 WhatIsLoyalty? . . . . . . . . . . . . . . . . . . . . . . . . 67

Chapter5 Retention: ABehavioralStrategy . . . . . . . . . 71 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 AnIntroductiontoSurvivalAnalysis . . . . . . . . . . . . . 73 TheTechnicalAspectsofSurvivalAnalysis . . . . . . . . . . 74 CaseStudyBackground . . . . . . . . . . . . . . . . . . . . 77 Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . 78 ModelDevelopment . . . . . . . . . . . . . . . . . . . . . . 79 TheSignificantPredictorVariables . . . . . . . . . . . . . . 80 ModelValidation . . . . . . . . . . . . . . . . . . . . . . . . 80 ModelImplementation . . . . . . . . . . . . . . . . . . . . . 81 InterveningtoSaveProfitableCustomers . . . . . . . . . . . 82

Chapter6 KeyBusinessOutcomeMetrics . . . . . . . . . . . 87 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 TheCostofCustomerAcquisition . . . . . . . . . . . . . . . 88 ResearchDesignandMeasurementImplications . . . . . . . 89 TheRoleofCustomerRetention . . . . . . . . . . . . . . . . 92 CustomerSatisfactionandMarketShare . . . . . . . . . . . 92 CustomerSatisfactionandProfitability . . . . . . . . . . . . 95

Chapter7 DataPreparation . . . . . . . . . . . . . . . . . . 103 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 The Relationship between Employee Attitudes and CustomerLoyalty . . . . . . . . . . . . . . . . . . . . . . 104 The Relationship between Customer Loyalty and BusinessOutcomes . . . . . . . . . . . . . . . . . . . . . 111 SummaryComments . . . . . . . . . . . . . . . . . . . . . . 115

57

Table of Contents

Chapter 8 Analysis Framework: Bivariate Relationships . . Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 BivariateMeasuresofAssociation . . . . . . . . . . . . . . . 121 CaseStudy: CanonicalCorrelationAnalysis . . . . . . . . . 124 CausalFramework . . . . . . . . . . . . . . . . . . . . . . . 130

Chapter9 AnalysisFramework: RegressionModels . . . . . 133 DependenceModelingwithMultipleRegression . . . . . . . 133 AlternativeRegressionModels . . . . . . . . . . . . . . . . 137 LogisticRegressionAnalysis . . . . . . . . . . . . . . . . . 137 PrincipalComponentsRegression . . . . . . . . . . . . . . . 142 OtherRegressionModels . . . . . . . . . . . . . . . . . . . 150 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151 Chapter10 AnalysisFramework: CausalModeling . . . . . 153 CausalModelingwithPathAnalysis . . . . . . . . . . . . . . 153 PathAnalysis . . . . . . . . . . . . . . . . . . . . . . . . . . 154 AssessingModelFit . . . . . . . . . . . . . . . . . . . . . . 158 Case Study: PitStop Employee Satisfaction, Customer Satisfaction, andProfitability . . . . . . . . . . . . . . . . 159 LatentVariablePathAnalysis . . . . . . . . . . . . . . . . . 165 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . 171 AssessingtheModel . . . . . . . . . . . . . . . . . . . . . . 172 Chapter11 TheFutureofLinkageResearch . . . . . . . . . 175 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . 175 SimulationSystems: SatNav . . . . . . . . . . . . . . . . . . 175 ManagementDecisionTools: LoyaltyRx . . . . . . . . . . . 179 TheGlobalPerspective . . . . . . . . . . . . . . . . . . . . . 184 RefiningOurUnderstandingofLoyalty . . . . . . . . . . . . 189 IntangibleDriversofCustomerLoyalty . . . . . . . . . . . . 191 ConcludingRemarks . . . . . . . . . . . . . . . . . . . . . . 191 Appendix: MatrixAlgebrainStatistics . . . . . . . . . . . . . 195 MatrixandVectorOperations . . . . . . . . . . . . . . . . . 196 MatrixMultiplication . . . . . . . . . . . . . . . . . . . . . 197 LeastSquaresRegression . . . . . . . . . . . . . . . . . . . 202 PrincipalComponentsAnalysis . . . . . . . . . . . . . . . . 205 EigenvectorScaling . . . . . . . . . . . . . . . . . . . . . . 209 EigenvectorRotation . . . . . . . . . . . . . . . . . . . . . . 211 GlossaryofTerms . . . . . . . . . . . . . . . . . . . . . . . . . 213 Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233

vii

117

Figure 1.1

Figure1.2 Figure1.3 Figure1.4 Figure1.5 Figure1.6 Figure1.7 Figure 2.1 Figure2.2 Figure2.3 Figure2.4 Figure2.5 Figure2.6 Figure 2.7 Figure3.1 Figure 3.2

Figure 3.3

Figure3.4 Figure3.5 Figure3.6 Figure3.7 Figure3.8 Figure3.9 Figure4.1 Figure 4.2

List of Figures

Malcolm Baldrige National Quality Award evaluationcriteria. . . . . . . . . . . . . . . . . . . . . . 2 Principaldisparitiesaffectingservicequality. . . . . . . . 3 SERVQUALscaledimensions. . . . . . . . . . . . . . . . 4 Customervaluemap. . . . . . . . . . . . . . . . . . . . . 10 Reasonsforautomobilerepurchase. . . . . . . . . . . . . 12 Affectiveandcognitivedimensionsofloyalty. . . . . . . . 12 Relationshipbetweenloyaltyandsatisfaction. . . . . . . . 13 Elements of the Minnesota Satisfaction Questionnaire. . . Summaryofemployeesatisfactionquestions. . . . . . . . 23 Commitmentquestions. . . . . . . . . . . . . . . . . . . . 25 ItemsproposedbyNarver, Jacobson, andSlater. . . . . . . 27 ItemsproposedbyKohli, Jaworski, andKumar. . . . . . . 28 ItemsproposedbyDeshpandé, Farley, andWebster. . . . . 29 Items proposed by Schneider, Parkington, and Buxton. . . SixSigmaprocessvariancereduction. . . . . . . . . . . . 34 Hard dollar and soft dollar outcomes of processimprovement. . . . . . . . . . . . . . . . . . . . . 35 Blue Sky Airlines: relationship between customer andemployeesatisfactionandprofitability. . . . . . . . . 36 TheSixSigmaprocess. . . . . . . . . . . . . . . . . . . . 37 SixSigmacontrolchart. . . . . . . . . . . . . . . . . . . 39 SixSigmasequentialreliabilitytest. . . . . . . . . . . . . 40 Qualityfunctiondeployment. . . . . . . . . . . . . . . . . 41 Thehouseofquality: BlueSkyAirlines. . . . . . . . . . . 43 Processimprovementlinktoprofitability. . . . . . . . . . 47 Fivedimensionsofbehavioralintention. . . . . . . . . . . 56 Hypotheses relating customer satisfaction toeconomicreturns. . . . . . . . . . . . . . . . . . . . . . 59

ix

19

30