Measuring Customer Satisfaction of Ford Motors Company - Research Paper Example

? Best practices of measuring satisfaction of the Measuring Satisfaction of Ford Motors INTRODUCTION: customer relationship management has become an important phenomenon in the business world. Companies today, realize the importance of retaining existing customers by meeting/exceeding their expectations, as the cost of attracting new customers is must more than the cost of retaining an existing customer. For this purpose, it is important to measure customer satisfaction on regular basis in order to understand their needs, wants and demands so that final product can be developed that not only gives maximum value to the customers but also helps in realizing valuable profits. BEST PRACTICES OF MEASURING CUSTOMER SATISFACTION: methods of collecting customer data can be divided into two broad categories; Direct Methods and Indirect Methods. Direct methods involve face to face conversations, phone calls, questionnaires, surveys, interviews, emails, chat communications and feedback cards. While indirect methods include observation, mystery shopping, industry positioning reports and automated recording machines. Whatever methods the company uses, the company must take into account best practices of measuring customer satisfaction so that realistic and accurate results can be derived from the research. The key factors to consider before measuring customer satisfaction are: 1. Define the goals: it is important to set clear objectives before measuring customer satisfaction and stick to those goals throughout the data evaluation process. Try to focus on the critical topics and avoid respondent fatigue. 2. Measuring what matters: it is important to measure the drivers that affect the customer behavior. These drivers can be; cost, quality, speed of customer service, availability, packaging of the product, trust, positioning of the brand etc. 3. Scientifically designed questionnaire: the questionnaire should be specific and focused. “Precise questions, phrasing, and scales should be used to accurately measure customer satisfaction. Rigorous scientific testing and decades of empirical evidence enable this methodology to link satisfaction to financial performance” (CFI group 2008) 4. The post-calls should be short and polite: If information is gathered through phone calls or post-call interactive voice recording machines, the call should be at most 2- 3 minutes long. Customers usually get frustrated by multiple questions, therefore the questions should be short and simple and must be asked in a polite manner 5. Use right scale to measure the response: it is better to use a five-point scale to measure the response. A ten-point or seven-point scale can confuse the customers. 6. Strive for the right-mark, not the benchmark: right-marking means that customer satisfaction rate is measured on the basis of operational goals set by the company. It identifies the service levels at which the customers will be satisfied at most. However, benchmarking the best-in-class will perhaps make you set unrealistic and unachievable goals. 7. Measuring, analyzing and interpretation of results: customer data should be recorded in a separate data base and customer satisfaction results should not be used to punish or reward employees rather it should be viewed as a roadmap to success. Efforts must be made to interpret the data quickly so that necessary actions can be taken to improve the performance. Measuring customer satisfaction results is not the end of the process. It is equally important to align business strategies, goals and day to day operations to increase customer satisfaction. Following factors contribute to increasing customer satisfaction. Commitment of upper management. Setting Customer-focused improvement goals. Employee training programs should focus on making the customer’s happy. Front-line employees who contribute to customer’s satisfaction should be recognized. Direct and indirect factors should be identified that have a direct impact on customer satisfaction. Conducting regular surveys to check the customer satisfaction level. INDUSTRY: Different industries focus on different variables that affect their customer satisfaction level. For instance, for airline industry “safety” is the most important factor, while “price” is a serious factor affecting customers in oil and gas industry. On the other hand, telecommunication industry must consider the element of “signal coverage”. For restaurants “taste” has direct impact on future sales, while “variety” is a major driving factor in fashion industry. We have chosen “automotive” industry to analyze the customer relations programs of Ford Motor Company. FORD MOTOR COMPANY: CUSTOMER RELATIONS PROGRAMS: In order to measure and improve customers satisfaction and after sales service, Ford Motors have launched two websites; www.dealersaskford.com and www.customersaskford.com where customers and dealers can find information specific to their area of interest. Furthermore, the company has introduced web 2.0 channels to talk to car owners. O’Malley, manager of customer and dealer contact, reported that, in an automotive industry, the kind of interaction and experience people have with the dealer when they are making their purchasing decision will have a direct impact on the repeat sales. Therefore, Ford took initiatives to introduce new web-based and high-tech tools to store customer database on the websites which is quite cheaper than managing call centers. In order to overcome the challenges of improving customers-dealers experience and achieving lower operating cost Ford developed a comprehensive plan along with CISCO Internet Business Solutions Group (IBSG) and developed innovative automotive “customer experience demo”. Also, separate website is created for dealers to provide them up-to-date information. These self serving websites contains interactive Q/A which provide solutions to the dealers and customers. Moreover, the company has also added chat rooms and blogs into their websites which helps the company to collect customer feedback and check their satisfaction. Furthermore, IP connected vehicle can also be used as an interactive channel by the customer. Finally, the most significant benefit of this new system was the fact that call centers were consolidated resulting in the reduction of staff and identification of flexible business models. Business results achieved from customer relations programs are seen in the improvement of brand image and company’s positioning because blogs and chat rooms were user friendly. “Ford has experienced a 3 percent improvement in customer sentiments” (Cisco, 2007). Plus the visits at customer service website tripled and reached 250,000 visitors /year. On the other hand, 1/3 of the dealer’s calls were moved to dealer’s website which declined the cost by 20% over 3 years. RECOMMENDATIONS: The business results of Ford Motor Company suggest that the company has achieved its desired goal of measuring and improving customer satisfaction by improving customers-dealers experience. However, the company has ignored other factors that affect the purchasing decision in automotive industry. The company should use the information stored in its database to identify the factors that affect customer behavior for e.g. price, durability, design, colors, brand name etc. After identifying these variables, the activities of all the departments must be aligned to produce the end product which ultimately exceeds customer’s expectations. Finally, this process should be carried out periodically because identifying, tracking and recording customer’s satisfaction is a never ending process. References Cisco, (2007). Ford’s Innovative Customer Relations Programs Increase Owner Satisfaction and Promise 20 Percent Growth in Annual Savings: success stories. Retrieved from: http://www.cisco.com/web/about/ac79/docs/wp/Ford_CS_1119.pdf CFI group (2008). Top 10 Customer Satisfaction Best Practices. Company report. Retrieved from: http://docs.google.com/viewer?a=v&q=cache:u3QE4kktnWIJ:www.inin.com/resources/Documents/Top-Ten-Customer-Satisfaction-Best-Practices-for-Contact-Center-IVR-Surveys.pdf+best+practices+to+measure+customer+satisfaction&hl=en&gl=pk&pid=bl&srcid=ADGEESgNiXDRBKC5dhZNqtR2s7mKsltEQHnKJ-GpF_RHU4DGrAyEvPr-Ofk9CcnLSNr_Al5SrBkvpIGCI16lUp15J6xdrLWD8jAEPzsbVCqnNjDqQ6OMcYcrCBUc7QlkgL-uVd-CGZPC&sig=AHIEtbQgevToR2SlI5twPHxfUeMSBdNbtg Stevens, M. Measuring Client Satisfaction: The Types of Information That Will Help Enhance Your Performance. Online blog. Retrieved from: http://www.1000ventures.com/business_guide/crosscuttings/customer_satisfaction_measuring_bygtms.html Hernandez, L., Momney, A. & Cherbosque J. (2005). The effectiveness Of Customer satisfaction Measurements: Research paper. Retrieved from: http://docs.google.com/viewer?a=v&q=cache:88kOdwAEpxgJ:www.rdagroup.com/download_post.asp%3Fid%3D2+ford+motors+best+practices+to+measuring+customer+satisfaction&hl=en&gl=pk&pid=bl&srcid=ADGEESijxspZ83J6cf8ilocKzpLgRq-nws_LgRQQdcyymijz3srqIWR69o5PaXUKhAO1ghf7OMWdOjGctnuwh25WBIrVAi-mmcyIU4blgd9GUTMpT4W0BtEVCQxCUCi6LPLxuZKb-1Kk&sig=AHIEtbTQTq3TxUi-GDrJm_quJwhwO4nf9A USA.gov, (2010). Measuring Customer Satisfaction. web analysis. Retrieved from: http://www.usa.gov/webcontent/analytics/measuring-customer-satisfaction.shtml Management Study Guide, (2011). Methods of Measuring Customer Satisfaction: e-article. Retrieved from: http://www.managementstudyguide.com/methods-of-measuring-customer-satisfaction.htm Read More