Bip 2005-2003

IMS:
Customer Satisfaction
Integrated Management Systems Series
The Integrated Management Systems (IMS) series of books provides

practical guidance and advice on integrating the systems operating within an
organization. The IMS series provides a framework into which additional
management systems can be incorporated.
Each volume is written by an acknowledged expert in the field. The series
editor is David Smith of IMS Risk Solutions Ltd, who has been involved in
writing management system standards since the early 1990s and is himself
the author of a number of BSI books on the subject.
IMS: The Framework
IMS: Implementing and Operating
IMS: Customer Satisfaction
IMS: Creating a Manual
IMS: Information Security
IMS: Managing Food Safety
IMS: Risk Management for Good Governance
IMS: The Excellence Model
IMS: Audit and Review
IMS: Human Resources
I n tegrated M an agem en t System s Seri es
IMS:
Customer Satisfaction
George Nowacki
First published 2003

© George Nowacki, 2003
ISBN 0 580 41426 4
BSI reference: BIP 2005
The right of George Nowacki to be identified as the author of this work
has been asserted in accordance with the Copyright, Designs and
Patents Act 1988.
A catalogue record for this book is available from the British Library.
Copyright subsists in all BSI publications. Except as permitted under the
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obtained from the Copyright Manager, British Standards Institution,
389 Chiswick High Road, London W4 4AL.
Great care has been taken to ensure accuracy in the compilation and
preparation of this publication. However, since it is intended as a guide
and not a definitive statement, the author and BSI cannot in any
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on the basis of the information contained in the publication nor for any
errors or omissions. This does not affect your statutory rights.
Typeset by Monolith – www.monolith.uk.com
Printed by PIMS Digital
Contents
Acknowledgements vii
1. Introduction 1
2. Initial status review 4

Why satisfy the customer? 5
What is satisfaction? 8
What is our business? 12
Who are the customers? 13
Customer needs 14
Customer expectations 20
Customer complaints 23
3. Policy and its development 24

Documentation of policy 27
4. Identification of processes 28
Process mapping 29
5. Planning in detail 31
Identification of aspects 32
Determining objectives 38
Gap analysis 40
Identification of resources 41
Roles and responsibilities 42
Planning of operational control 42
Contingency preparedness 42
v
6. Implementation and operation 44

Operational control 45
Management of human resources 46
Documentation and its control 47
Communication 51
Relationship with suppliers and contractors 52
7. Performance assessment 53
Monitoring and measurement 54
Analysing and handling nonconformities 55
Management system audit 56
8. Improvement 57
Corrective action 58
Preventive action 59
Continual improvement 60
9. Management review 61
Review input 62
Review output 63
Appendices
1. IMS framework 64
2. Common elements of management systems and the
IMS framework 72
3. An example of a customer satisfaction policy 74
4. Process mapping 75
5. Evaluating customer satisfaction 77
6. Outline plan of a complaints management system (BS 8600:1999) 79
7. Outline model for a simple manual 80
8. Performance assessment checklists 82
References 95
vi
Acknowledgements
Acknowledgements
I would like to thank the many people that helped me in the writing of this
book: David Smith who persuaded me not just to start it but to finish it as
well, Mike Robbins for his practical help and encouragement and Chris
Millidge for his guidance during planning and many helpful comments at
various stages of drafting.
I would also like to thank Roger Bolton for providing an outsider’s
perspective and for giving me some very constructive criticism so gently
that we still remain good friends.
I would like to thank the following for granting permission to reproduce
their material in this book: City & Guilds, COBA-Aquent, the Institute of
Customer Service, and Professor Kano of the Tokyo Institute of Science.
Lastly, I would like to thank the BSI production team, in particular
Jonathan Silver and Christine Cox for their help, advice and, above all,
patience.
vii
1 . I n trod u cti on
Success is a journey, not a destination. (Ben Sweetland, American writer)

This book is intended to help those who are considering setting up a system
to manage customer satisfaction. The system can be used on its own, or be
aligned with or integrated into an existing management system. It follows the
principles and format set out in IMS: The Framework (Smith, 2001) and IMS:
Implementing and Operating (Smith, 2002). If you already have management
systems set up that align with these books or with ISO 9001 or ISO 14001, you
will be able to implement this customer satisfaction management system so
that it will become an integral part of the management system rather than a
separate system.
The principle on which this management system is based is the PDCA
(Plan, Do, Check, Act) cycle. In short:
• plan what you are going to do based on your needs;

• carry out your plan;
• check to see whether or not it is working;
• carry out actions to remedy shortcomings and prevent their
recurrence then review periodically to see whether or not your plans
and objectives are achieving the desired result; if not, repeat the cycle.
PDCA is plain common sense. It encompasses the process approach of

ISO 9001:2000 and the systems approach used in ISO 14001:1996.
Such an approach provides control not only of the processes used in
running a business, but also of the links and interactions between the
processes. The application of the PDCA cycle to a business is a way of
driving continual improvement. Strictly speaking, the term ‘continual
improvement’ was originally applied in ISO 9001 to improvement of the
management system. However, one of the objectives of the management
1
system is to achieve customer satisfaction, and its continual improvement

is essential, not just for improved efficiency but for survival.
Monitoring the satisfaction of interested parties requires the
evaluation of information relating to the perception of interested
parties as to whether the organization has met their requirements.
(ISO 9004:2000)
The process of planning, putting in place, running, monitoring, reviewing
and improving the process is described in the following pages. A flow
diagram of the operations is shown in Figure 1.1. This figure is repeated at
the beginning of each chapter to show the progress of the development of
the system.
Where extracts from ISO 9001:2000 and ISO 9004:2000 have been
included they have been referred to by clause number. Extracts from IMS:
The Framework have been identified using the numbering system used in
the integrated management system (IMS) framework; the framework is
shown in Appendix 1. This shows how customer satisfaction can be slotted
in as an element of an IMS.
The way in which elements of management of customer satisfaction
relate to requirements in management systems for quality, environment
and occupational health and safety is shown in Appendix 2.
2
Introduction
Identification of business needs
Policy and its development
Identification of processes
Identification of business risks and aspects

Plan
Prioritization of aspects
Determining objectives
Gap analysis of requirements vs current status

Development of action plans
Implementation
Do
Operation
Check Performance assessment monitoring
Improvement
Act
Management review
Figure 1 . 1
3
2. I n i ti al statu s revi ew

Implementation
Operation
Performance assessment monitoring
Improvement
Management review
Figure 2. 1
4
Initial status review
We must beware of needless innovations, especially when guided by logic.

(Winston Churchill, 1942)
The initial status review, in the language of management system standards,
determines where we are now and where we want to be in the future, ie
identifies our business needs.
Managers should aim at establishing an ethos in their enterprise where
all employees understand that they are responsible for the pursuit of all the
objectives of the enterprise and should contribute to their attainment
where relevant. The vision, mission statements and objectives of an
organization should be reflected in the objectives of every employee so that
all employees are aware of their responsibilities and contribute to the
business. The real need is for the managers to manage all activities in
concert rather than in isolation. The role of the Quality Manager is then to
ensure that all the activities can be managed (monitored, controlled,
recorded and improved) in accordance with the same principles and to
improve the system where required.
The needs of the organization, and the resources that can be made
available, should be considered. The top management of the organization
should define what the business is, who the customers are, what their
needs are, what their expectations are and how the organization should
meet these requirements.
Why satisfy the customer?
All organizations plan to survive and even to prosper and to expand.

Survival is usually the minimum requirement. In the private sector this
means avoiding liquidation or takeover; this implies making a profit.
Without profits there can be no (long-term) survival. In the public sector
the organization has to convince those paying for the service (directly or
indirectly) that they are getting value for money in meeting public need
(NHS, government departments, etc). In each case survival is dependent on
giving satisfaction to customers, ie users of the service whether they are
paying for it or not. David Wilkinson of Ernst and Young says that ‘two
years ago, our entrepreneur awards were jam-packed full of technology
firms. This year, (2002) most entries were consumer focused.’
Johnston (2001) gave the average profit per employee as:
• £8,365 for an organization with poor service;

• £14,362 for an organization with good service.
5
He also reported that an increase of 5 per cent customer retention resulted

in a 25 to 125 per cent increase in profit.
Obviously, the final figures are highly dependent on the source data but the
strong message is that you need to give good service to make good profits.
There are different ways of giving satisfaction. A shop gives satisfaction
in supplying to customers what they have asked for or what they have
chosen. In a hypermarket customers know what they want. Satisfaction is
linked to the whole shopping experience and will be dependent on price,
range of goods, ease of purchase, advice or help, car parking, pleasantness
of surroundings and credit facilities, not just the product alone. It will be
measured by the number of customers increasing or decreasing, not by the
number of complaints. If the shop invites complaints or suggestions, as
many supermarkets do, they must at least be acknowledged, and in due
course replied to.
In the case of a pharmacy or a hardware shop, perhaps the shopkeeper is
asked for advice in establishing what the customer needs, not just what has
been asked for, and the quality of this advice may be more important than
the quality of the article supplied. This is even more marked in those
seeking legal advice where the quality of the product supplied is more
important than the price, assuming you can afford it.
In the public domain, measurement of satisfaction is more difficult.
Complaints about a service can usually be made only to someone who is not
able directly to put it right such as an Ombudsman. It then often becomes
a political question, with, for example, the setting up of schemes like the
Charter Mark. It is anomalous that in those public services that provide
unsatisfactory service, the demand from the public is to spend more (NHS,
schools, police) but in the private sector customers rarely demand that the
price should be increased.
Satisfaction is also subject to scale. A particular train journey may be
completely satisfactory but the train service in general may be rated as
poor (and the same with a visit to a hospital). Equally, the total service can
be satisfactory or even good, but with occasional instances when the usual
standards are not met, for example, air travel.
In the private sector satisfaction will have many dimensions. The product
must be right in design, price, quality and delivery; likewise the packaging
should be adequate but not excessive and so on.
The organization will be trying to build a reputation for the company or the
brand name (slow to build, easy to destroy, eg Perrier, Marconi) and
complaints, even if unjustified, may often be bought off. Retailers offering a
‘no quibble money back guarantee if dissatisfied’ is an example; in some cases
the slowness of the procedure discourages frivolous application for a refund,
but the offer is there. If a customer writes to some food manufacturers with
6
what he or she perceives to be a complaint, the manufacturer may generously

reimburse the complainant (usually in kind) to keep him or her happy. At the
same time, the manufacturer may explain the cause of the apparent problem
that may not be the fault of the manufacturer (‘bloom’ on chocolate due to
sub-optimal storage conditions is an example).
• Satisfied customers will continue buying your product or service.

• Marketing pundits say that satisfied customers will tell five people of
their satisfaction while dissatisfied customers will tell nine people of
their complaint.
• It costs between five and seven times as much to gain a new
customer as to retain an existing one.
• If you lose a customer, you lose a lifetime of sales.
• Only 4 per cent of customers complain if they are dissatisfied; most
just vote with their feet. (In other countries the proportion
complaining may be higher, but it is not British to ‘make a fuss’.)
• The average business loses between 10 and 30 per cent of its
customers per year.
• Many businesses do not know which customers they have lost, when
or why they were lost or how much the loss has affected profits.
There was criticism from some quarters that ISO 9001:1994 concentrated
on improving the management system rather than the product. That
standard did not specifically state that if an organization made a product
that did not satisfy its customers, it would go out of business however well
it managed the provision of that product or service. As Aaron Altschul, the
American nutritionist once said: ‘The nutritional value of a food that
nobody wants to eat is zero.’ However, there may have been cases,
particularly in monopoly organizations such as government bodies and
businesses in centrally managed economies, where customers could not
vote with their feet. In these, the business could be ‘efficiently’ conducted
to the total satisfaction of its managers and the despair of its captive
customers. Some doctors’ waiting rooms spring to mind. To combat this,
the latest revision of ISO 9001 contained a specific requirement for
customer satisfaction to ensure that, to be assessed and certified as well
managed, an organization had to be customer oriented and provide a
product that satisfied its customers.
Top management shall ensure that customer requirements are
determined and are met with the aim of enhancing customer
satisfaction. (ISO 9001:2001, 5.2)
7
This means that, as a requirement of ISO 9001:2000, customer satisfaction

must be addressed in the organization’s policies and be an intrinsic part of
management responsibilities and commitment. In short, it is one of the
elements that are addressed in the ‘plan, do, check, act’ cycle.
What is satisfaction?
Satisfaction is meeting or exceeding the customer’s expressed or implied

needs, requirements and expectations on time, every time. The customer’s
needs may not be expressed, they may be incorrectly expressed or may even
conflict with their expressed wishes. An obese person who has suffered
heart problems may express a desire for deep-fried Mars bars, but does he
or she need them? Satisfaction is linked to customers’ expectations. These
may conflict with their own long-term interests or the interests of others.
If selling cigarettes, alcohol, armaments or drugs, one might decide that
strict controls are essential to avoid misuse of the product. But what car
manufacturer would survive if it produced only cars incapable of exceeding
70 mph? Ethical considerations are arbitrary and may change with time.
Any product that engenders dependency – drugs, gambling, fast cars – is
susceptible to moral arguments that may be irrelevant to the needs of (the
majority of?) consumers who are not habituated. The way that a customer’s
needs, expectations and requirements are met in the light of ethical and
business considerations may be a matter of company policy.
The organization’s management should set their objectives, agree on
their exclusions and develop their policies with a view to attaining them.
Providing customers with a product or service that satisfies their needs
must be a key element in fostering satisfaction. To do this, consistently and
in a controlled way, requires a quality management system. In order to show
that the system produces a product that satisfies the customer, ISO
9001:2000 requires that customer satisfaction is monitored.
Customer satisfaction is linked to customer loyalty and to customer
retention, but the relationship between them varies with the business.
If you support a football team, you may be retained, intensely loyal but
frequently dissatisfied. A customer who hunts around to get the cheapest
price for a branded product or a commodity (eg petrol) may be satisfied but
not loyal. You may retain customers because you have an effective monopoly
but the customers are rarely satisfied. Rail commuters and consumers in
centrally run economies may be familiar with this. If you reduce your price
for a well-known branded product, you may gain customer satisfaction until
a competitor does the same. Satisfaction must be long term to lead to
retention and loyalty. If you are merely retaining customers and your
8
competitors are increasing the number of theirs or their market is growing

faster than yours, you are falling behind. All of these are a part of the much
wider and more complex field of customer relationship management that
you might wish to explore after implementing the controls that are essential
for your particular business.
Satisfaction
Loyalty Attraction
Retention
Figure 2. 2 Interrelationship between attraction, satisfaction, loyalty and retention
Customer loyalty
According to Jones and Sasser (1995) one can segment customers by

‘loyalty segments’:
Loyalists: completely satisfied and a source of repeat business (can

recommend service to others).
Defectors: dissatisfied in various degrees (can become ‘terrorists’ and
spread disaffection).
Mercenaries: can be completely satisfied but show no loyalty (can be
expensive to acquire and easy to lose).
Hostages: have to accept whatever they are given (customers of monopolies).
BSI has recently published PAS 46, which covers managing loyalty for all
stakeholders, including employees, customers, suppliers and shareholders.
It defines several types of business loyalty:
9
• monopoly;
• inertia;
• convenience;
• price;
• incentivized; and
• emotional.
All of these terms are sufficiently self-explanatory for the purposes of this
book but show that customer motivation is a complex subject and should be
carefully researched for the particular business. Incentivized loyalty has
waxed and waned over the years. An early example, which may be
remembered by older readers was the Co-op dividend or ‘divvie’. On paying
their bill, shoppers would quote a number recorded by the cashier and
receive their dividend periodically. (This scheme is now modernized with
swipe cards as for other loyalty schemes.) Green shield stamps came later
but when the majority of retailers offered them, they defeated their own
object of encouraging loyalty and their use rapidly declined. Modern
schemes such as supermarket loyalty cards and air miles are used by many
larger organizations with highly developed IT systems. Although their use
may only move the market share by a percentage point or so, on a multi-
million pound turnover, this is significant.
Household and motor insurance is an area where traditionally customers
have shopped around to get the cheapest price. Brokers have to some extent
profited from this as they may offer their customers policies from different
companies when it comes to renewal. Insurance companies have been
strengthening their brand image and have introduced various loyalty
schemes or benefits such as European cover for vehicles, legal assistance,
air miles and retail discount cards in order to encourage customer loyalty
and retention.
Customer value
Another related concept that is gaining popularity in some quarters is

customer value. This encompasses many attributes including: overall quality,
customer relations, image, price, product range, delivery and service. It can
be regarded as a strategic approach to managing the overall business with a
view to attracting and retaining customers.
Customer value is only one aspect of value management that:
through its focus on outcomes, integrates corporate efforts to obtain
optimum value, taking into account the interests of the organization,
10
customers and stakeholders. It helps define and validate corporate

objectives and translates them into effective operational responses.
(PD 6663:2000)
Attraction, loyalty and retention depend to a considerable extent on the
policies of the organization, its marketing skills, the perception of the public
and competitive activity. Satisfaction is very much a function of how the
business is conducted and the attitude of employees towards their customers.
For the purposes of this book, let us assume that your customer has
freedom of choice and that you are not the manager of a football club. You
can then work on the premise that in order to retain customers and to win
their loyalty, you are going to have to satisfy them. The job of the marketing
and publicity departments should then be made clearer.
Value Management
Value to Value to Value to

organization customers stakeholders
Customer Customer
attraction loyalty
Customer Customer
satisfaction retention
Figure 2. 3 Customer satisfaction as a part of value management
11
Companies need to attract and acquire new customers and to retain existing
ones. In some circumstances, these two activities could be separated into
separate functional units: business development and relationship
management.
Customer ‘churning’ is a term coined for customers switching from one
supplier to another. This is increasing, particularly as businesses face
reduced profits and get more competitive. The increase is particularly
noticeable in the retail sector as market information is made more readily
available and is more widely used. The increase in e-commerce has made
window-shopping and price comparisons so much easier. Deregulation of
service industries (eg the utilities) has educated customers to look around
for the best deals in other areas as well. Suppliers need to offer their
customers added value in order to attract them and keep them.
What is our business?
It is very important to be clear what your business is. In many cases, this
changes over time as business needs change. Virgin used to be a record
company. It now runs a very diverse empire far wider than its original
market. Tesco, the supermarket chain, now also sells insurance and cars.
Perhaps one should take the view that one’s business is to ensure the long-
term survival and profitability of the organization by the best use of all
resources. If at some time, one of the resources happens to be money, then
investment, acquisition or expansion into novel areas could be options.
The questions to ask may include the following:
• What is our core business?

• What subsidiary or ancillary business do we conduct?
• What do our potential customers think we do? Is this view correct? If
not, should we meet their expectations or change them?
There may be a core business and subsidiary businesses. Sometimes, the

bulk of business may shift to one of the sidelines, making that the new core
or a new business. The business of J Arthur Rank as a film distributor
developed from making religious films for missionary outlets, a charitable
activity of the founder of the flour millers.
A large organization may have many businesses, in which case different
segments may have different customers with each group having different
needs and criteria of satisfaction. For example, an organization may offer
different levels of service or product, a luxury version and a cheap and
12
cheerful version where price is the major consideration. The importance of

satisfying each group of customers should be assessed separately and the
criteria for doing so established. If you have a diverse market, you may wish
to decide the following:
• What market segments do we serve?

• What is our customer base in these segments?
• What are the main criteria that we need to meet to satisfy the
customers?
• What is the cost benefit in satisfying customers in these segments?
• How should we allocate the resources devoted to customer
satisfaction between these various segments?
Who are the customers?
Customers are the recipients of a product or service. They can be internal

or external and may or may not pay directly for the product or service
received. A customer can be the purchaser of a product or the recipient of
a service such as a bus or train journey, medical treatment, an educational
course or be someone with a telephone enquiry.
How should customers be identified? The organization may have direct
contact with the customer (eg a small builder) or very indirect (eg a
manufacturer of high-volume consumer goods). In the latter case, you must
decide whether you need to aim to satisfy only the direct customer (eg a
wholesaler) or the entire supply chain down to the end-user or even those
responsible for the disposal of the product. If you have a unique product, it
may be sufficient to depend on your wholesaler or agent to provide
feedback on customer satisfaction but if your product is one of many, the
first feedback you might get of dissatisfaction is loss of market share. It is
therefore important to be aware of the popularity of the product all the way
down the retail chain, although you may decide to leave monitoring and
management of customer satisfaction to others.
To decide who your customers are, you may find it useful to ask the
following questions.
• Are they large corporations, smaller organizations or private

individuals?
– If organizations, who are the important decision makers who
have to be satisfied?
13
– What are the criteria of satisfaction? (Quality, reliable delivery,

price, flexibility?)
• If the customers are private individuals, are they a cross-section of
the population or are they a sector of the population that can be
identified by:
– age;
– gender;
– geographic area;
– income;
– lifestyle;
– education;
– special interest (sport, music, cookery, etc).
These sub-divisions are not rigid, there will always be blurring of boundaries,
but knowledge of the profile of the ‘most frequent’ customer will help to
identify the objectives and targets. The trend is now to identify markets
using lifestyle analysis rather than by using the traditional demographic
criteria of age, sex and occupation.
For commercial organizations, not all customers are profitable. It is
important to identify those customers whose requirements are so stringent
that they cannot be met without incurring a loss (that cannot be offset
against a worthwhile benefit). It is not practicable or profitable to provide
a world-class service to all customers and potential customers.
I n tern al cu stom ers
It is easy to forget that people in our own organization depend on our work
and cooperation. It is easier to remember that we depend on cooperation
from others. It is useful to map your inputs and outputs (what you get from
whom and what you pass on to others; see Chapter 4). Staff should examine
their inputs and outputs and discuss with the recipients and donors how
these could be improved. If the internal workings of the organization are not
proceeding smoothly, what chance has it of satisfying external customers?
C u stom er n eed s
Having identified your customers, you must decide on how their needs are
to be addressed (in the light of legislation, ethics, etc). This decision could
include the scope of the business possibly expressed in a formal vision or
14
mission statement if that reflects the culture of the business. This should
be communicated to potential customers so that they know what to expect.
Fortnum and Mason prides itself on quality produce and customers would
feel justified in returning goods with minor flaws or blemishes. On the
other hand, on a market stall, one would expect goods to be sold on an ‘as
seen’ basis. In any business the customer should know what to expect.
Guidance on the application of ISO 9001:2000 is given in ISO 9004:2000.
Clause 5.2, ‘Needs and expectations of interested parties’, includes
customers and end-users and lists examples of their needs and expectations
related to the organization’s products:
In order to understand and meet the needs and expectations of
interested parties, an organization should
— identify its interested parties and maintain a balanced response
to their needs and expectations,
— translate identified needs and expectations into requirements,
— communicate the requirements throughout the organization,
and
— focus on process improvement to ensure value for the interested
parties.
To satisfy customer and end-user needs and expectations, the
management of an organization should
— understand the needs and expectations of its customers,
including potential customers,
— determine key product characteristics for its customers and
end-users,
— identify and assess competition in its market, and
— identify market opportunities, weaknesses and future competitive
advantage.
Examples of customer and end-user needs and expectations, as
related to the organization’s products, include
— conformity,
— dependability,
— availability,
— delivery,
— post-realization activities,
— price and lifecycle costs,
— product safety,
— product liability, and
— environmental impact.
15
To help identify customer needs, the following questions may be useful:
• Do you have a breakdown of the types of customers you have?

• Do you know how your customers use your product or service?
• Have you given your customers the opportunity to tell you their
needs and have you listened?
• Do you measure and monitor the factors your customers consider
important?
• Are your employees involved in obtaining, recording and passing on
the above information?
In addition, for business customers the following questions are useful:
• Do you know how your product or service helps their business?

• Do you know how it affects their business?
A simple checklist such as the one in Table 2.1 may help to identify which
features of your business are most important to your various customers,
which customers are the most profitable and therefore, which features you
need to concentrate on to maximize profits.
For example, a small builder may have as customers: private individuals,
local authorities, owners of licensed premises (often breweries), offices,
shops, schools, etc. Each group will have its own priorities and expectations.
Many builders will develop a particular segment of the market and specialize
in that area.
Table 2. 1 Checklist to identify profitable customers
Customer type A B C
Total turnover
Profitability (Profit margin %)
Profit
Relative importance: quality

promptness
reliability
price
service
If the organization is serving a wide range of customers, the management

can identify the most important criteria for customer satisfaction in those
segments, can decide where the best prospects of long-term profitability
16
arise and can concentrate their resources in those areas. Remember that a
proportion of your customers may be unprofitable but you may want the
kudos that serving them may provide. (How would you like to have on your
letterhead: ‘By appointment to Her Majesty, Queen Elizabeth II…’?)
One way of categorizing customers is by adapting the Boston matrix (see
Figure 2.4), developed by the Boston Consulting Group, commonly used for
categorizing markets. This analogy should not be taken too far. Most
successful products go through the cycle from problem child, star, cash cow
and dog, and this tool is often used to identify the stage of the lifecycle of a
given product. Customers may move from being ‘problem children’ through
‘rising stars’ to ‘cash cows’ but should never be allowed to become ‘dogs’.
High market Low market

share share
High growth
(or profit) ‘ Rising Star’
‘ Problem
Child’
Low growth
(or profit) ‘ Cash Cow’ ‘ D og’
Figure 2. 4 Boston matrix
A similar tool, introduced by the Harvard Business School in 1957 is the

Ansoff matrix; Figure 2.5 is derived from Ansoff (1957). Many variants have
been developed but the one shown here may be found useful in formulating
a marketing strategy and in helping to identify the most profitable segments
of the market on which to concentrate.
The COBA matrix (COBA-Aquent, London) was designed to help
companies analyse their relationship with their customers and develop
marketing, sales and service strategies to use their resources where they
would provide the greatest benefit. The market is divided into segments
17
and each segment is analysed in accordance with the simple matrix shown
in Figure 2.6.
Customers
Existing New
Existing Maintain effort; Develop market
Products consolidate;
withdraw.
New Develop product/ Diversify:
service - existing customers;
- new customers.
Figure 2. 5 Ansoff matrix
Customer benefit
Positive Negative
Positive Cultivate and
develop
Optimiz e, make
routine
Company
benefit
Negative Tailor make
and charge
Axe
Figure 2. 6 COBA matrix
Obviously, a service or function that benefits both customer and company

should be cultivated and protected (eg regular timed deliveries).
An activity that is essential to the company but not particularly
welcomed by a customer (eg having to pay for goods or a service) should be
made as easy and painless as possible. If you develop a simple and efficient
routine, your customer will be more likely to go with the flow rather than
think about each bill individually.
18
Customers with special requirements or who require special treatment

may be worthwhile but only if the special service is paid for, either directly,
or as a quid pro quo .
Redundant or unnecessary activities should obviously be stopped but it is
remarkable how many of these continue for historical reasons long after
the need for them has ceased, eg sending information to departments or
companies that no longer exist or that are no longer involved in that
activity. At the very least, keep your mailing list up-to-date and relevant.
One should be cautious about putting too much faith in such simple tools.
Use them to provide a viewpoint, not a decision. A high market share and
high growth do not necessarily give rise to a high profit. The costs of product
and market development, realization and servicing must be considered.
You may need to conduct a survey to determine or confirm customer
needs. If you do, you should construct the questionnaire carefully or ensure
that, if you use a contractor to conduct the survey, the following points are
addressed:
• The customer must be able or willing to answer the questions. (You

may be asking questions that are commercially sensitive or beyond
the competence of the customer to answer.)
• Make sure that the customer is not in a position to gain an advantage
by misleading you.
• The questions must be unambiguous and capable of being answered
simply.
• The questions must elicit replies that make it clear what actions need
to be taken.
• Ask the customer about their general satisfaction with the way their
needs are being addressed.
• Ask the customer whether the questionnaire has missed any aspect
that should be addressed.
• Keep the questionnaire short.
• If doing the survey by mail, provide a stamped, addressed envelope.
Many organizations implement customer relationship management by

studying, identifying and anticipating or meeting customer needs in a
partnership deal. For example, an insurance company holding personal data
on customers may offer them products that are specific to the time of year
(holiday insurance) or stage of their life (information on mortgages,
retirement policies, savings policies to cover children’s education, etc). Raw
material suppliers may give their customers analytical or quality control data
on batches of material before they are delivered to save the customer having
19
to store the raw material until it is checked. The delivery of components ‘just
in time’ forms a bond between supplier and customer that is difficult for the
customer to break. Supermarkets used to use a significant part of their floor
space for refrigerated and ambient storage. They now negotiate regular,
timed deliveries and typically use only about 10 per cent of their floor space
for storage. These are all examples of how customer needs can be satisfied
and the customer can be made to depend on the supplier.
Customer expectations
Dr Noriaki Kano, a leading researcher in customer satisfaction in Japan,

tells us that unless we differentiate between types of customer requirement,
we risk:
• providing superfluous quality;

• delighting customers in one area and encouraging them to go to the
competition in another;
• acting on what customers say rather than on what they think.
Dr Kano’s model, developed in the 1980s, identifies three types of customer

requirement and two descriptors related to the fulfilment of the requirements.
The descriptors are:
• the degree to which the requirements are fulfilled (ranging from

‘completely’ to ‘not at all’);
• the customer’s subjective response to the first descriptor (ranging
from ‘delighted’ to ‘disgusted’ or other appropriate descriptors).
An important feature of this model is that the subjective response to the

fulfilment (or non-fulfilment) of a requirement depends on the nature of
the requirement. Figure 2.7 is based on the work of Kano et al (1984).
The requirements can be categorized as follows.
1. Expected: these may be so obvious that the customer may not state
them. If they are met, the customer may not even notice. If they are not met,
then the customer complains bitterly. Putting a lot of effort into improving
ways of meeting such requirements over and above an acceptable level will
not delight customers. They are analogous to ‘hygiene factors’ in Maslow’s
pyramid (hierarchy of needs.)
20
For example: response time to telephone enquiries, legibility of notices or

correspondence, clean sheets in a hotel, Wellington boots being waterproof,
trains running on time, watches and clocks being accurate. (Will a ten
thousand-fold improvement of accuracy in a domestic timepiece from one
second in a hundred years to one second in a million years make much
difference to a customer?)
High
satisfaction
(delighted)
Exciters and Normal

delighters (fundamental)
Low 3 2 High
quality quality
performance performance
1
Indifferent
Low
satisfaction
(disgusted)
Figure 2. 7 The Kano model
2. Normal : these are also known as ‘fundamental’. Customers are clear

what they are and they are often foremost in the customer’s mind. If they
are met, the customer is satisfied; if they are not, the customer is
dissatisfied. Improving fulfilment of such requirements will improve the
customer’s satisfaction. More is better.
For example: price, delivery, fitness for purpose, performance (up to a
point). Digital cameras are evolving rapidly. Their resolution of about 6
21
million pixels is approaching the maximum requirements of a home user

but improvements in the memory and battery life would be welcomed.
3. Delightful : these are sometimes known as ‘latent’ needs that the
customer may not be aware of until they are satisfied. If they are not
fulfilled, there is no reaction because the customer is not aware of them.
When a supplier identifies such a need and fulfils it, the customer is
delighted and that leads to customer loyalty and retention.
For example, a number of products exploited latent needs and created
their own markets:
• Microwave ovens : developed as a result of a side-effect of wireless and

radar installations; these attracted nesting birds seeking warmth (and
also, illegally, radar operators). Before they were introduced to the
market, customers were unaware that such a product was possible.
• Celluloid: originally developed as an explosive (nitrocellulose) but
found to be a versatile material used for photographic film, table-
tennis and billiard balls, lacquer for shoes, etc.
• Polyethylene : a polymer produced in a laboratory experiment that led
to an inexpensive new material with an enormous number of uses,
particularly in packaging and domestic utensils.
• Silicones : a laboratory worker found that, due to a leak in the
equipment, he was unable to write down his notes because the ink
just rolled off the paper. This led to the development of a whole new
range of raw materials, using their properties of stability,
temperature tolerance and waterproofing.
• Post-it notes : they resulted from an adhesive that didn’t stick
properly. Instead of rejecting it, 3M applied the physical property to a
novel (and obvious, but only in retrospect) use. How did we ever
manage without them?
Other examples of products that, before they were developed, one would
not feel the need for, let alone imagine their popularity, include the
Walkman and its derivatives, mobile phones, many other home electronic
products and fast food chains.
It is not necessary to develop new products to delight customers. Merely
working out their real needs, pointing them out and fulfilling them by
providing the correct product or service (of which the customer may not be
aware) can delight customers and is much more effective than very efficiently
carrying out their erroneous or inadequately informed instructions. The
examples below are commonplace but, like the best ideas, so obvious in
retrospect that one wonders why they are remarkable:
22
• A British electronics company sent a design for a micro-circuit to a

manufacturer in Japan requesting a quotation for volume production.
The Japanese company tested the circuit, found that the design was
flawed and offered a re-designed circuit together with the quotation.
• A ticket clerk at a railway station offered the cheapest ticket for a
specified journey rather than the one initially requested.
Customer complaints
When complaints are freely heard, deeply considered, and speedily

reformed, then is the utmost bound of civil liberty attained that wise
men look for. (Milton, Areopagitica )
If you are losing customers, you can ask a consultant to find out why or you can
listen to the customers. TMI (Time Manager International, an international
training and consultancy firm) and ICS (The Institute of Customer Service)
published a UK national complaints culture survey in 2001.
They concluded that a well-handled complaint can strengthen the
customer relationship and will have no negative impact in 90 per cent of
cases. Nearly all of the 4,000 customers surveyed would recommend a
company to friends if it handled a complaint efficiently but 80 per cent of
them would spread the word if their complaint had been badly handled.
Other highlights in the report were that two-thirds of over 50s complain
most of the time whereas the under 21s just go elsewhere. Only one in four
employees feels qualified to deal with complaints and only one in three
customer-facing staff is trained to deal with them.
The report concludes that ‘complaints are a gift’ or they can be if staff are
properly trained and empowered to deal with them.
23
3. Policy and its development

Implementation
Operation
Improvement
Management review
Figure 3. 1
24
1. Top management should ensure that the overall policy:

a) is appropriate to the organization;
b) includes a commitment to comply with all relevant requirements
and continually to improve the effectiveness of the management
system;
c) provides a framework for establishing and reviewing objectives;
d) is communicated, where appropriate, and is understood within
the organization;
e) is reviewed for continuing suitability. (Smith, 2001)
If you have a management system in place, you will already have a written
policy statement (mission statement, vision). If you have a quality system
(such as ISO 9001) in place, it will include a requirement to monitor
customer satisfaction and you will need to ensure that the way you deal
with customer satisfaction aligns with the review cycle. If you do not have
a formal system in place and are starting with customer satisfaction, you
should formulate a simple working policy and periodically review it and, if
necessary, amend and improve it. All elements in your policy should be
monitored, managed, continually reviewed and continually improved. This
should be a feature of your ‘high level’ policy and should apply to every
element of your operation.
You may decide to have a formal customer satisfaction policy that forms
a part of your overall policy or you may incorporate customer satisfaction
as one of the aspects of your overall quality management or integrated
management system.
a) The policy is appropriate to the organization
This means not just appropriate to the size and complexity of the organization
but also the type of business it is operating. The aspects of policy that affect
customer satisfaction should take into account the product or services offered,
the objectives of the organization, including who the customers are, which
needs are to be satisfied, how, and to what extent, and what resources can be
made available.
The top management need to identify or specify their market. Is the
business to be ‘pile it high and sell it cheap’ with price the major
consideration, or is it going to provide high-grade goods or services regardless
of cost? In practice of course, price, quality and service are all required but
the relative emphasis is one of the factors that organizations use to
differentiate themselves in the market.
25
The sector of the market that is being targeted is also very important (see
Chapter 2). Is the product or service one that is or can be aimed at a
particular demographic or lifestyle group? Can the target market be
expanded? For example, Club Mediterranee started out offering beach hut
holidays aimed at the under-30 swinging singles but later offered
fundamentally the same product to a different target group by catering for
young families. If you have captured a segment of the market with one
product, can you supply other products to the same market segment? Saga
started as a tour operator for the over-50s. It retained the same target
group but expanded its range of products by providing other services such
as insurance.
b) The policy includes a commitment to comply with all relevant

requirements and continually to improve the effectiveness of the
management system
The monitoring, review and continual improvement of customer satisfaction

(and other aspects of the total policy) should be covered by your ‘high level’
policy. This includes a commitment to comply with internal policies and with
relevant legislation and regulations.
This requirement should establish which long-term needs of customers
should be satisfied and how. Exclusions (for legal, political or ethical reasons)
should be identified and made clear. Ethical business considerations (such as
sourcing of raw materials or fabricated products), although not necessarily
legal requirements, may affect customer loyalty, retention and satisfaction
and can be addressed in the statement of policy.
c) The policy provides a framework for establishing and

reviewing objectives
This is intended to ensure that the policy shows by a clear and unambiguous
statement that the organization has a mechanism and commitment to
demonstrably achieve its objective of customer satisfaction and to react to
changes.
d) The policy is communicated, where appropriate, and is understood

within the organization
It is important that everyone in the organization understands and practises

the policy and does not just pay lip-service to it. The policy must be realistic
26
and should form the basis of the culture within the organization. The
implementation of the policy by different members of the organization will
depend on their specific jobs. Line managers should agree with their staff how
each staff member’s particular objectives contribute to the implementation of
the overall policy.
Customer satisfaction may be affected by every employee; the effect of
staff in customer-facing roles is obvious, but production workers, cleaners,
drivers of liveried company vans, collectors of baskets and trolleys in
supermarkets, accounts staff: the actions of all of these reflect on the
company image and can affect customer satisfaction in different ways.
e) The policy is reviewed for continuing suitability
The policy should be periodically reviewed so that it reflects accurately the

business, the customers and their current and future needs. Holidays
offered by Saga and Club 18-30 are obvious examples referred to above. The
needs of potential customers should also be reviewed otherwise there is a
danger of missing new and emerging markets. Markets, target groups,
objectives and policies must be periodically reviewed and amended according
to present and future business needs.
Documentation of policy
The management system documentation should include:

a) documented statements of the policies and objectives.
(Smith, 2001)
The customer satisfaction policy should, like all policies, be short, to the
point and understood by the employees who are expected to implement it.
Notes on the policy with details on how it should be implemented or its
success monitored should be available to any employee who feels the need
for more detailed knowledge.
Appendix 3 shows an example of a customer satisfaction policy, the elements
of which can be incorporated into a general policy document or in other
policies and procedures (eg quality policy), or they can stand alone.
27
4. I d en ti fi cati on of processes

Implementation
Operation
Improvement
Management review
Figure 4. 1
28
In order to satisfy customers, you must be aware of their needs and act to
satisfy those needs by offering a product or service. The need is an input;
the putting together of a product or service is a process, and the product or
service is the output.
A product is made by carrying out a number of operations on raw
materials (or unfinished product) coming in. A service is developed by
putting together various actions designed to meet the customer’s need. If
you want to deliver a product (or service) that satisfies your customers
consistently, you need to ensure that the inputs, outputs and processes are
monitored and controlled. In other words, you must have a quality system
of some kind (not necessarily a formal, documented system although such
a system would be preferable for all but the simplest operations).
Thus, a process is the way we convert an input into an output. It may be
simple, like converting a request for a brochure into its dispatch, or complex,
involving many sub-processes such as converting raw materials into final
products. A useful technique to identify the processes is process mapping. In
this, the activities that go on within the organization and the inputs and
outputs of the operation are identified. The processes, the outcome of which
may affect customer satisfaction, should be identified. Some aspects may not
be under the control of the organization: deliveries, supplies, postage and
legislation. You should identify those processes that may be critical to the
operation and either take steps to control them or make contingency plans
in case of malfunction or failure. If the process involves a significant cost,
you may need to plan for more cost-effective alternatives.
Process mapping
A process is an act or operation that converts an input (raw material,

information) into an output (product, conclusion, service). It can be
characterized by the following criteria:
• it concentrates on the ‘what’, not the ‘how’;

• always has measurement;
• activities and decisions are the responsibility of specific roles or job-
holders.
A process can be expressed as a flow diagram, and the conventions shown

in Figure 4.2 are commonly used.
29
Yes
Activity Decision Event
No
Flow
Figure 4. 2 Conventions used in process mapping
A decision can be a process or part of a process. Many processes are complex

and can be broken down into sub-processes. Shopping is a process but
involves many sub-processes: stocktaking, making up a shopping list,
deciding where to get the goods, getting there, buying the goods, paying for
them, getting them home and putting them away.
Process mapping is outside the scope of this book, but Appendix 4 gives
some more detail and the topic is more fully covered in Appendix 3 of IMS:
Implementing and Operating (Smith, 2002).
An organization cannot generate customer satisfaction without relating to
something tangible; meeting a perceived need and providing a satisfactory
product or service are essential to customer satisfaction. To achieve that
consistently, it may be beneficial to have a formal quality system to monitor
and control the processes in the operation of the business.
30
5. Planning in detail

Implementation
Operation
Improvement
Management review
Figure 5. 1
31
I d en ti fi cati on of aspects
Nothing is more terrible than activity without insight. (Thomas

Carlyle, 1795–1881)
The basic steps in aspect identification and impact assessment are:
1. identify processes;
2. identify aspects;
3. determine impacts;
4. decide if impact is tolerable;
5. prepare control action plan;
6. review adequacy of action plan.
Operati on al aspects
When mapping the processes carried out in the organization, a number of

inputs, operations and outputs are identified for each operation. Features of
each of these will have an effect on the desired outcome of the operation and
may influence it in many ways, eg quality, health and safety, timeliness,
environmental waste, cost, etc. These features are known as ‘aspects’.
Customer satisfaction should be one of those aspects. It is likely that
customer satisfaction will be a primary aspect of any input, process or
output that affects quality and cost. Any system managing these should be
driven by customer satisfaction. Examples of other aspects that may affect
customer satisfaction include waste, noise, social policy and industrial
relations. When planning and implementing these policies, the effect on the
public perception of the organization and the way it might influence
customer reaction, should be taken into account. The identification of
aspects that impinge on customer satisfaction should be done in cooperation
with the staff concerned with the relevant operations.
Figure 5.2 shows a scheme linking two separate inputs to a process with
two distinct outputs or consequences.
Table 5.1 gives a checklist for monitoring customer satisfaction. At each
stage you are asking yourself, ‘Is there anything here that might affect
customer satisfaction?’ (It might promote satisfaction or it might have an
adverse effect.)
32
Planning in detail
Input A Output C
OPERATION
Input B Output D
Figure 5.2 An operation with two inputs and two outputs
Table 5.1 Checklist to identify aspects affecting customer satisfaction

Question No Yes Details
Input A
Input B
The operation
Output C
Output D
If, for example, the operation is a manufacturing process, inputs might be:
• raw materials;
• energy;
• human resources;
• transport of goods or people.
Features that might affect customer satisfaction could be:
• noise;
• smell;
• traffic;
• social aspects of employment;
• origin of raw materials, etc.
33
The operation might involve:
• noise or other pollution;

• health and safety aspects;
• quality aspects;
• appearance of the manufacturing plant, etc.
The outputs could be:
• a product or intermediate;
• by-products;
• waste streams;
• transportation;
• storage, etc.
Features of all of these could affect the output quality and price. They
therefore have an impact upon customers’ perceptions of the business and
therefore their satisfaction.
Consumer reaction in recent years against prominent petrol distributors,
sportswear manufacturers and makers of mothers’ milk substitutes was not
based on poor product quality but on other impacts of the operations that
were seen in an unfavourable light by consumers. For example, the
inappropriate disposal of outdated machinery, environmental damage
caused by inconsiderate industrial development, the use of child labour, or
the pressurizing of ill-informed potential customers have each caused an
adverse reaction among the general public including customers for those
products or services. The consequence was an adverse financial effect on the
companies concerned.
Legal compliance
If you wish to stay in business, you need to ensure that your organization is
operating legally. You might satisfy some customers by operating illegally
but the business is likely to be short-lived. Also, if there are any complaints
from customers, your position will be weak if you are not complying with the
law. You should be aware of the legal restrictions attached to any of your
operations, services or products. You may need to inform your customers
about the need for you to comply with the law; they may not be aware of all
of the legal aspects. It may not always be in their short-term interests.
34
Planning in detail
For example, working hours for commercial vehicle drivers and pilots are
limited by law. This is for the safety of passengers and employees but can
result in passengers or goods being stranded if working times are
unexpectedly in danger of being exceeded. Making passengers aware that the
carrier is bound by and complies with safety regulations before a trip would
obviously be preferable to waiting until they started complaining. Informing
customers of contingency plans might be reassuring (eg safety procedure
demonstration on airlines). Deciding how much warning customers should
have of possible mishaps and doing so diplomatically, so as not to make
passengers reluctant to board is an exercise in public relations.
Notices in bars, off-licences and shops informing the public about age
limits for buying alcohol and tobacco are prominently displayed to inform
and prepare customers, to avoid arguments and to divert any dissatisfaction
to the legislators rather than the retail outlet. There are strict regulations
covering the sale of petrol into containers. Notices covering this are seldom,
if ever, displayed in garages. Motorists who have run out of petrol and who
have not checked that their petrol can complies with the regulations may be
dissatisfied with the garage they have walked to in the hope of getting
petrol. Customer oriented garages keep a stock of ‘legal’ containers to lend
or sell to their customers. Cinemas display assessments of the suitability of
the films for various age groups.
You should identify any aspects of the business that are affected by
legislation and ensure that customers are made aware of those that may affect
them directly in an understandable and friendly way (not in microscopic print
on the back of an invoice). These might include:
• international conventions;
• regional laws;
• national laws and regulations;
• industry codes of practice;
• society requirements (not necessarily legal requirements).
You cannot be expected to inform customers about all the legal constraints
under which your business operates, merely those which might affect them
or their decision to do business with you. A statement that you are aware
of some legal considerations and support them may show your customers
that yours is a business that takes its responsibilities seriously.
The most common examples are in retail sales. For example, there are
legal restrictions on the sale of:
35
• tobacco;
• alcohol;
• knives;
• products containing organic solvents;
• fireworks;
• guns and ammunition;
• some drugs and medicines.
Some of these are obvious but many retailers display notices warning of
such restrictions.
Management should ensure that the organization has knowledge of
the statutory and prospective requirements that apply to its products,
processes and activities and should include such requirements as part
of the quality management system. Consideration should also be
given to
— the promotion of ethical, effective and efficient compliance with
current and prospective requirements,
— the benefits to interested parties from exceeding compliance, and
— the role of the organization in the protection of community
interests. (ISO 9004:2000, 5.2.3)
Determination of impacts and prioritization of aspects
Once you have identified the aspects of the processes that impinge on
customer satisfaction, you should, with the help of the members of staff
involved in the operations, determine which have the greatest impact. If
there are many aspects, it may be convenient to draw up a risk table. Risk
can be considered as a product of two variables: likelihood and consequence
(or hazard). It will usually be sufficient to classify each as having one of
three values in accordance with Table 5.2.
Each event is then allocated a value that is the product of the two scores
and the events listed in order of priority. A product of 9 is a matter that it
is essential to control whereas an event scoring 1 is probably trivial and can
be ignored.
Note: Although the scale runs from 1 to 9, it is not continuous. The values
5, 7 and 8 are missing. An unlikely disaster will have a lower score than a
moderate mishap with medium probability. If the consequences of a given
event are exceptionally severe, and you wish to avoid it at all costs, you may
wish to assign it a score higher than 3.
36
Planning in detail
Table 5.2 Risk assessment table
Likelihood Score Consequence Score
Very likely 3 Severe 3
Medium 2 Medium 2
Unlikely 1 Low 1
The management must decide the level at which an event is sufficiently

significant to need monitoring and controlling. This depends on the type of
business or service being offered and its sensitivity to customer satisfaction.
Examples of aspects that might affect customers and impacts that might
adversely affect customer perception (and thus satisfaction, loyalty and
retention) are given in Table 5.3. All these aspects need to be monitored,
measured and controlled and targets set to ensure that failures do not
threaten the business. The ultimate aim, of course, is continual improvement.
Table 5.3 Potential adverse impacts on customer satisfaction
Aspect Potential adverse impact
Product quality Product performance failure
Product safety failure
Product obsolescence
Product recalls
Price Product over-priced, cost-cutting by competitors
Luxury product under-priced
Delivery Slow, unreliable
Expensive
Environmental performance Effluents, pollution, noise, raw materials usage
Labour relations Adverse publicity
Unreliable production schedules
Low staff morale and high turnover
Legislation Litigation or fines
Customer service Reputation, complaints, customers defecting
37
The provision of the appropriate level of quality or service can be difficult to

judge. If you have a production line making consumer goods, you cannot
guarantee that there will never be any defective products. You must make an
informed judgement on the chance of failure and the severity of the adverse
impact. Manufacturers of perishable processed foods measure the microbial
load and calculate the shelf-life of the food under specified storage conditions.
They add a considerable safety factor so that the likelihood of microbial
spoilage is very small. However, the safety factor depends on the severity of
the impact. The growth of yeast in yoghurt is unlikely to cause more than an
unexpected taste, whereas the growth of botulinum spores in canned meat or
fish is much more serious and is more strictly guarded against.
BSI publishes several standards that give statistical sampling plans to
enable manufacturers to choose the degree of certainty that products will
meet their specifications. These include BS 5701, BS 5702-1, BS 5703 and
the BS 6001 series. BS 5701 is being revised and is expected to be published
in 2003. It describes the simplest method of statistical process control for a
process that produces individual units rather than a continuous product.
Although customers want reliable products, it is possible to satisfy them
and even delight them by other means. In the 1930s, a manufacturer of
electrical equipment for the automobile industry employed about 20 per cent
of its production staff in various testing and inspection roles. After the war,
the resources spent on testing were reduced and arrangements made for car
dealers to replace electrical equipment found to be faulty within a specified
period with a brand new unit fitted free of charge to the customer. The
customers were usually delighted when they received a ‘new for old’
component, little realizing that they had conducted, free of charge, a valuable
and expensive testing procedure on the product.
Determining objectives (control action plan)
If you don’t know where you are going, you will probably end up
somewhere else. (Laurence J Peter)
Every organization needs to achieve its objectives in order to succeed or

even survive in its enterprise. These objectives can be regarded as targets
for the outputs or outcomes of its operations. All management involves the
setting, monitoring and assessing of objectives; it is the basis of the PDCA
cycle or any other management model.
Some of the objectives may depend on and be set by policy decisions.
Examples of such policy decisions are:
38
Planning in detail
• defining the market for the product or service;

• deciding on the products or services to be provided;
• investment.
Other objectives may relate to operational aspects. Operational objectives

are dependent on those responsible for carrying out the operations. All staff
involved in the operation should be involved in setting the objectives. This
will benefit the organization in two ways:
1. Those who are involved practically in the work will buy in to the
system, own and take responsibility for it and will be committed to
its successful implementation.
2. Those who carry out the operations often know more about the
details of an operation and its problems and idiosyncrasies than
senior management.
After mapping the processes you will have identified those aspects that
impinge on customer satisfaction and selected those that have the greatest
effect in order of priority. The operations involved in these aspects need to be
examined in collaboration with those responsible for their implementation
and targets and objectives set.
The objectives should be realistic and achievable: the common acronym
used is SMART (Specific, Measurable, Achievable, Realistic, Timely). Before
setting objectives, the current situation must be determined first if targets
are to be measurable. The effects of corrective action can then be assessed
and new targets set.
The objectives should be a part of the performance objectives of every
member of the organization who has a significant influence on customer
satisfaction. They should be continually monitored, assessed and reviewed
at intervals that depend on the timescale of the assessment. For instance,
in a call centre, targets for dealing with customer enquiries may be set on
a daily or a weekly basis. Such a frequency is unlikely to be necessary for
an organization dealing with low-volume, high-cost capital goods.
Objectives differ widely between businesses but might include the following:
• reduce number of complaints (or returned goods) by a percent over

six months;
• reduce time to resolve complaints by b per cent within three months;
• increase market share by c per cent in six months;
• improve market position by d places within 12 months;
39
• acknowledge letters within 48 hours and reply within seven days;

• obtain award for quality of service within 12 months;
• obtain favourable mention in local/consumer media within 12 months;
• conduct survey to verify/modify ideas of customer needs within three
months;
• conduct survey of customer satisfaction within three months;
• reduce waiting time at counters/checkouts to a maximum of e minutes.
Johnston (2001) shows how one can decide priorities depending on one’s
performance against competitors and the importance to the business of
the aspect being considered. A simplified version of his chart is shown in
Figure 5.3.
Better than
Excess
Appropriate
Performance
against Improve
competitors
Urgent action
Worse than
Less Importance Critical
important
Figure 5. 3 Prioritizing actions in the light of importance

and comparison with competitors’ performance
40
Planning in detail
G ap an al ysi s of req u i rem en ts vs cu rren t statu s an d
d evel opm en t of acti on pl an s
Our plans miscarry because they have no aim. When a man does not
know what harbour he is making for, no wind is the right wind.
(Seneca, 4 BC – AD 65)
If an organization has management systems in place, managers need to be
aware of the differences in scope of the various systems. Do the various
elements and aspects of the management system address customer
satisfaction? It is important to go through the various elements of the
management system to make sure that the relevance of each aspect to
customer satisfaction has been examined and, if appropriate, acted upon. This
is particularly important if customer satisfaction is integrated into a holistic
management system rather than managed by a stand-alone system. Table 5.4
shows the various elements of a management system and can be used as a
checklist to identify any missing areas that should be addressed. The purpose
of the checklist is to include the achievement of customer satisfaction when
you are setting up a management system and developing the objective aspects:
identification of resources, planning of operational control, etc.
For example, if you are a manufacturer, you probably have back-up
methods for delivering finished goods to your customers, but do you have a
procedure to inform them in advance of possible delays and changes in the
normal delivery method and the reasons for doing so? You have identified
those responsible for sales, production, etc but have you identified the
roles, responsibilities and authorities of those responsible for managing
customer satisfaction and made it clear how they fit into the organizational
structure of your business?
I d en ti fi cati on of resou rces
2.4 The organization should ensure the availability of human,

infrastructure and financial resources. It should determine and
provide the resources needed:
a) to implement and maintain the management system and
continually improve its effectiveness; and
b) to enhance satisfaction by meeting requirements. (Smith,
2002, based on ISO 9004:2000, 6.1.1)
41
The role of different members of staff in the achievement of customer

satisfaction depends on their role in the organization. All members of staff
should be aware of the need to satisfy the customer but their input may be
more or less direct or ‘customer facing’. In an organization dealing with
retail sales, customer satisfaction is so important that a person or a
department may be set up to deal with it. In smaller organizations, it may
be a part of every manager’s function, but unless sufficient time is allowed,
it is unlikely to be managed well. All too often such duties are piled onto
managers in addition to all their current tasks. Something has to suffer. It
is essential that the person with the ultimate responsibility for ensuring
customer satisfaction has the competence, resources (including time) and
authority to manage it.
Roles and responsibilities
All staff should be aware of their responsibility for satisfying customers. In

critical areas this should be monitored and measured. A nominated person
should be responsible for ensuring that the necessary actions are carried
out. A clear and defined reporting chain to top management should be
established and publicized.
Planning of operational control
The methods of monitoring and measuring customer satisfaction should be

recorded and the methodology reviewed periodically and assessed for
effectiveness (see Chapter 6).
Contingency preparedness
If the organization provides an essential service (computer bureau, hospital,

emergency services, pharmacy, breakdown service, etc) it will make some
provision for servicing customers if it cannot do so itself. Doctors will use a
locum service, pharmacists will have a duty rota, and schools will have supply
teachers. Suppliers of goods will have contingency supplies; manufacturers
will have subcontractors. It is not unknown for competitors to help each
other out in emergencies for the good of the customer and that of the
industry as a whole. An industrial client probably assures its own continuity
of supply but if suppliers have to be switched, confidence will be undermined.
42
Planning in detail
It would be sensible for a manufacturer to have in reserve another
manufacturer who could maintain the supply to the customer. This is
common practice for agents and distributors.
Table 5.4 Checklist to identify gaps in the management system
Element Objective Quality Health Environ- Customer Other
aspect and safety ment satisfaction
Management system Yes/no Yes/no Yes/no Yes/no Yes/no
Policy
Policy and/or principles
Planning:
• identification of business risks
and aspects;
• selection of significant aspects to
be addressed;
• objectives and targets;
• identification of resources;
• identification of organizational
structures, roles, responsibilities
and authorities;
• planning of operational control;
• contingency preparedness for
foreseeable events.
Implementation and operation:
• operation control;
• management of human resources;
• management of other resources;
• documentation and its control;
• communication;
• relationship with suppliers and
contractors.
Performance assessment:
• general;
• monitoring and measurement;
• analysing and handling
nonconformities;
• management system audit.
Improvement:
• corrective action;
• preventive action;
• continual improvement.
Management review:
• general;
• review input;
• review output.
If you intend to change your service to the customer in any way, even for the
better, you should inform him or her well in advance, and explain the reasons.
43
6. I m pl em en tati on an d operati on

Implementation
Operation
Improvement
Management review
Figure 6. 1
44
Implementation and operation
Operational control
The organization should ensure arrangements are in place at the

operational level that ensure that:
a) the objectives and requirements for the product/service are
being met;
b) the necessary processes, documents and resources specific to the
product/service are provided;
c) the necessary verification, validation, monitoring, inspection
and test activities specific to the product/service are instigated;
d) the records needed to provide evidence of the realization
processes meeting requirements are produced. (Smith, 2001)
The above requirement, taken from ISO 9001:2000, 7.2 to 7.5, applies to all
objectives and requirements of the business, and therefore includes
customer satisfaction.
You now need to implement the planned control measures for carrying out
the policy, for meeting objectives and targets, for activating preventive and
corrective measures and for ‘aspect mitigation’ (avoidance and limitation of
damage). You should ensure that the necessary documents, processes and
resources are in place. Keep records so that a continuous history of progress
is available to enable proper reviews to be undertaken.
The monitoring and control measures need to be validated to ensure that
they are measuring and controlling the required aspects. In the case of
customer satisfaction, this can be very difficult. Different types of customers
(eg internal and external) may have different criteria for satisfaction and
the targets may be different for different inputs and outputs. The
distinction between external and internal customers may become blurred
since, in some organizations (both large and small), some duties are
contracted out, for example, catering, cleaning, maintenance, security, IT
services, sales and marketing and some aspects of personnel management,
particularly recruitment.
Customer satisfaction is one of the requirements of ISO 9001 and other
quality systems. All products or services should aim at satisfying the customer
but the definition of ‘customer’ has to be carefully considered, along with their
needs and expectations. Customers must understand the purpose of a
product, or objectives of a service, so that their expectations are realistic,
otherwise they may be dissatisfied. All customers are equal but ‘some are
more equal than others’. You must decide who are your most important
customers and concentrate on satisfying those (see Chapter 2).
45
You have already decided what your customer base is and what your
customer satisfaction objectives and targets are. In order to determine
whether objectives are being met carry out the following:
• Establish and document controls on whether or not the customer

satisfaction requirements for the product or service are being met.
(QA or QM systems?)
• Establish and document the processes and resources necessary to
monitor and control customer satisfaction. How is satisfaction
determined (eg questionnaires, surveys, sales figures, market
research, complaints), who is in charge, and how and where are the
documents kept?
Management of human resources
A customer service department is, all too often, the place where complaints
are lured and quietly strangled. It is essential to instil a culture of striving
for customer satisfaction throughout the organization. It is not just a
matter for those whose principal duties are in customer-facing roles. How
often, particularly in an open-plan office, have you heard a phone ringing
with people sitting at the next desk ignoring it? The person ringing is a
customer, whether inside or outside the organization.
Many time-management trainers encourage the practice of having
telephone calls diverted and only accepting them during a set time.
Occasionally this may be necessary, but it inconveniences two people: the
person making the call and the person to whom it is diverted. Is this
approach customer friendly and for whose benefit is it? In which
departments should it be allowed if any? Obviously not call centres, but
where do you draw the line? The effects can be mitigated to some extent if
the ‘deputy’ can truthfully say, ‘I am sorry but John Smith is not available
right now but he will ring you at 2.15.’ The next best thing to prompt
service is information, as anyone who has ever waited for a delayed train
will endorse. A good communications policy is essential for customer
satisfaction. Townsend (1970) suggested that when we are away from the
office we should try to telephone ourselves to see what indignities others
may have to put up with when they try to reach us.
Different people within the organization will have different levels of
contact with customers and more or less influence on their satisfaction.
Those people who have the greatest effect on customer satisfaction must be
46
identified. Their effects and impacts should be prioritized so that objectives

and controls can be set and resources deployed appropriately. It may be
necessary to have a customer relations department. Whatever the size of the
department (many people or part of one person’s job) senior management
must be committed to the department and actively support it.
Once the critical functions have been identified and prioritized:
• agree and set objectives;

• agree and set targets;
• implement monitoring and control measures;
• train staff to operate the controls.
Once again, it is essential to involve the staff in any target setting and
methodology (see Chapter 5 and Appendix 5). It may be advantageous to
employ an outside organization to train key members of staff.
Documentation and its control
We can lick gravity but sometimes the paperwork is overwhelming.

(Wernher von Braun)
Documentation requirements
The management system documentation should include:

a) documented statements of the policies and objectives;
b) a manual describing the working of the management system;
c) documented procedures that are required by particular
standards;
d) documents needed by the organization to ensure the effective
planning, operation and control of its processes; and
e) records required by any specific standards.
Note 1: Where the term ‘documented procedure’ appears, this means
that the procedure is established, documented, implemented,
controlled and maintained.
Note 2: The extent of the management system documentation can
differ from one organization to another due to:
47
a) the size of organization and type of activities;

b) the complexity of processes and their interactions; and
c) the competence of personnel.
Note 3: The documentation can be in any form of medium.
(Smith, 2001)
The documentation for the customer satisfaction management system
(CSMS) should slot into the overall management system documentation, if
there is one, as one aspect of an integrated system. If there are other specific
systems set up to deal with, for example, occupational health and safety, the
CSMS should be aligned with them by using the same terminology and
similar control, reporting and monitoring procedures. Again, remember,
there is one management running the business and it should be run in a
consistent and coherent way.
Flowcharts are very useful ways of setting out procedures. The more
complex the procedure, the greater is the advantage of using a flowchart
approach. The elements of the flowchart can be supplemented by
instructions or narrative given in text. Once those following the procedure
are reasonably familiar with it, a flowchart can act as a very valuable and
concise guide, checklist or aide memoire. It also helps those using it to
understand the logic of the operations, interactions with other processes and
critical decision areas. Appendix 6 shows an outline plan of a complaints
management system in the form of a flowchart (taken from BS 8600).
The system manual
The organization should establish and maintain a manual that includes:

a) the scope of the management system, including details of and
justification for any exclusions;
b) the documented procedures established for the management
system or reference to them;
c) a description of the interaction between the processes of the
management system. (Smith, 2001)
Such a manual is often a requirement of management systems. Item c)
refers to identifying and describing any interactions with other processes,
for example:
• finance or accounts for refunds or compensation payments;
48
• quality management or quality control to provide warning of

perceived shortcomings in the product (the warning can come from
quality control to warn sales staff or vice versa);
• feedback from customers via sales staff;
• public relations and advertising to advertise the organization’s record
of customer satisfaction, etc.
Control of documents
Documents required by the management system should be
controlled. Records are a special type of document and should be
controlled according to the requirements of those specific standards
covered by the IMS.
A documented procedure should be established to define the controls
needed:
a) to approve documents for adequacy prior to issue;
b) to review and update as necessary and re-approve documents;
c) to ensure that changes and current revision status of documents
are identified;
d) to ensure that relevant versions of applicable documents are
available at points of use;
e) to ensure that documents remain legible and readily identifiable;
f) to ensure that documents of external origin are identified and
their distribution controlled; and
g) to prevent the unintended use of obsolete documents and to
apply suitable identification to them if they are retained for any
purpose. (Smith, 2001)
In a small organization, it would be sufficient if the documents contained on
a cover sheet the signature of the person authorizing the document (the
‘owner’), the issue number and date, the frequency of review (or the date of
the next review). These could even be in the form of a footer to the page. The
owner of the system would be responsible for maintaining and distributing
the documents to appropriate staff (including the authorization and
identification of any external documents used as part of the system). Any
obsolete documents retained for the record could simply be stamped
‘withdrawn’ or ‘obsolete’. The work instruction for this would take up no
more than half a page of A4. These responsibilities would appear on the
owner’s job description.
This documented procedure may be applied to any system in use in the
organization. In the case of customer satisfaction, the procedures dealing
with customer complaints need to be maintained particularly carefully as
49
documentation may be needed as evidence in legal actions. Appendix 7

gives an outline model of a simple form of manual.
Control of records
Records should be established and maintained to provide evidence of

conformity to requirements and of the effective operation of the
management system. Records should remain legible, readily identifiable
and retrievable. A documented procedure should be established to define
the controls needed for the identification, storage, protection, retrieval,
retention and disposal of records. (Smith, 2001)
Some records, such as design plans, exposure to workplace risks, etc need
to be retained for long periods. Management should decide on how long to
retain records relating to the quality of goods. For high-value capital goods
with safety implications (eg an aeroplane) it would be sensible to keep
records for the lifetime of the product. For high-volume goods, there are
probably specifications, type testing and quality control records, so that a
manufacturer can say with statistical evidence, that a given article has, say,
a 99 per cent probability of meeting the specification. Records relating to
perishables, particularly foods, may need to be more carefully kept. For
example, an ice-cream factory codes its tubs so that it can identify not only
on what line an ice cream was made, but also the time to the nearest few
minutes. At the other end of the scale, quality control data for paper clips
is not critical and it is probably sufficient to ensure that production quality
(x per cent meeting specifications) remains constant.
The Consumer Protection Act may give a cause for action over a product
for up to 10 years. It might take up to three years for a product to reach its
final customer. If there is any danger of legal action over a product, it would
be advisable to keep quality records for that product for 13 years. Records
of complaints need not be kept much longer after the matter is closed;
perhaps a year or two. Records relating to customer satisfaction are solely
a management tool and only need to be kept until actioned or superseded.
For ease of comparison, summarized data might be kept to give historical
background and to demonstrate continuous improvement.
A procedure should be established to control access to records to prevent
unauthorized removal, alteration or destruction.
50
Communication
A memorandum is written not to inform the reader but to protect the

writer. (Dean Acheson, 1893–1971, American government official)
The organization should determine and implement effective

arrangements for communication:
a) between the various levels of the organization as appropriate to
their needs;
b) for receiving, documenting and responding to relevant
communication from external interested parties. (Smith, 2001)
Customer satisfaction is a vital component of any business. It needs to be
among the objectives of every employee as well as the top management. In
order to spread this culture to make it pervade the whole business, feedback
is required. All staff must be aware of the success or failure of their joint
efforts. A simple way of doing this is by a periodic newsletter or report. This
should be circulated to all staff. It should give quantitative data on past
targets and achievements, future targets and recommendations on how to
achieve them. There is a danger that such a report can be used or seen to be
used as a means of transferring blame. A great failure in some unsuccessful
managements is the idea that it is better to find a culprit than to remedy the
situation, possibly because it is easier. If there is a fire, the first thing to do
is to put it out, not to find out how it started. Only then should you consider
remedial and preventive actions.
In customer satisfaction, the most important communication is with
customers. They should know what they are getting and, if appropriate,
how long it will take, how long it should last (for a product), how much it
is going to cost (initially and to run, maintain and, if necessary, repair).
Even if customers are not given this information, they should be told that
it is available and where to find it. Customers should also be told how to
complain, to whom, and how their complaint will be handled. Unless
customers have this information, their expectations may be unrealistic and
disappointment will lead to dissatisfaction. Unfortunately, the advertising
industry actively promotes unrealistic expectations by implication.
One has to decide on the level of sophistication of potential customers when
offering information. There is the danger of over-emphasizing the obvious.
‘Batteries not included’ on packaging is a reasonable warning but ‘Sports car
51
not included’ on a house for sale advert would seem to be superfluous. (A

pious hope perhaps, for examples of unnecessarily literal labels abound.)
Relationship with suppliers and contractors
The organization should formalize its arrangements for those who

supply and contract their services, both internal and external, which
have an impact on the organization’s performance. (Smith, 2001)
If any outside contractor is used by the organization in any function that
could significantly affect customer satisfaction, a formal agreement,
detailing objectives and targets, controls and monitoring and reporting
methods, should be made. Servicing of cars is an example where the
manufacturer agrees or sets certain standards that have to be met by the
garage. In the better-known franchise operations, the owner of the franchise
is very careful to control and monitor every aspect of the franchisee’s
operation. Poor performance at one branch could spoil the reputation of the
whole chain.
A relatively recent practice is for some large organizations to diversify into
activities far removed from their core business: Tesco provides insurance,
Marks and Spencer provides financial services, etc. It is likely that many, if
not most, of such services are provided by strategic partnerships between
organizations with a famous name and a large customer base on the one part,
and established experts in the area on the other. The ‘front’ organization that
gives its name and brand image to the business must ensure that the
contractor meets the standards of service demanded by the purchaser. This
would usually involve a contract based on service agreements.
52
7. Performance assessment

Implementation
Operation
Improvement
Management review
Figure 7. 1
53
The organization should establish and measure the characteristics of

the product and/or services to verify that requirements have been
met. This should be carried out at the appropriate stages of the
process in accordance with the planned arrangements. (Smith, 2001)
Most formal management systems require continuous improvement. This
requires mechanisms for:
• monitoring;
• measuring;
• auditing;
• recording, and analysing performance;
• corrective measures for dealing with nonconformities; and
• preventive measures.
Monitoring and measurement
In desperation we end up by filling in some notional figures that give

the expected kind of answer. These are the murky beginnings of a
grand edifice that is ultimately constructed to provide a spurious
accuracy for the whole process. (Sir Michael Atiyah, President of the
Royal Society, referring in 1991 to government funding of research)
You will have already decided who your significant customers are: the ones
you need to satisfy for your business to thrive. Those customers will know
what to expect from you (or your contractors). You now have to decide how
to measure to what extent those expectations have been met and also
whether those expectations are good enough in comparison with
products/services offered by competitors.
The organization should establish and maintain arrangements to
monitor and measure, on a regular basis, the key characteristics of its
operations and activities that can have a significant impact. This
should include the recording of information to track performance,
relevant operational controls and conformance with the organization’s
objectives and targets. The organization should establish and maintain
a process for periodically evaluating the performance against
stakeholder requirements. (Smith, 2001)
54
Performance assessment
Having determined who the customers are and what their needs are, you
need to know how their satisfaction with the product or process should be
determined. Methods include:
• surveys;
• customer panels;
• questionnaires;
• complaints;
• sales figures;
• repeat sales;
• referrals;
• marketing consultants;
• consumer organizations;
• press reports.
Customers themselves are an excellent (valuable and low-cost) source of

information if they are allowed to give it. They should be encouraged.
Communication channels should be set up so that customers can talk or
write to members of staff who have the responsibility and authority to
resolve any problems. One way to treat customer complaints is given in BS
8600:1999. A complaints management system like this can be operated in
alignment with ISO 9001, ISO 14001 and BS 8800 and can form one part
of an integrated management system.
Analysing and handling nonconformities
Statistics are like a bikini. What they reveal is suggestive but what
they conceal is vital. (Aaron Levenstein, American writer)
The methods used for analysing performance should demonstrate
the ability of the processes to achieve planned results. When planned
results are not achieved, corrective action should be taken. Evidence
of conformity with the acceptance criteria should be maintained and
recorded. (Smith, 2001)
This means that it is not sufficient to record nonconformities; records of
specifications being met also need to be recorded.
55
Management system audit
The organization should establish and maintain a programme for

periodic management system audits to be carried out in order to
determine whether or not the management system:
a) conforms to planned arrangements for the management system;
b) has been properly implemented and maintained and is being
adhered to.
The audit programme, including any schedule, should be based on the
results of risk assessment of the organization’s activities, and the
results of previous audits. The audit arrangements should cover the
scope, frequency, methodologies and competencies, as well as the
responsibilities and requirements for conducting audits and reporting
results. Wherever possible, audits should be conducted by personnel
independent of those having direct responsibility for the activity
being examined. (Smith, 2001)
When the system is reviewed to check that it is producing the required
results, it is important to know whether any failures are due to:
• inappropriate design;
• inappropriate metrics;
• faults in the system; or
• errors in the way the system is being operated.
If the failures are due to staff not operating the system correctly, this could
be due to the following deficiencies:
• competence: this might be a failure of, or in, the general level of

competence or lack of training in the particular skills needed;
• management: this could be poor self-management, lack of
organizational skills or inadequate supervision and mentoring;
• motivation: all staff need to be committed to achieving customer
satisfaction; commitment cannot be delegated.
56
8. I m provem en t

Implementation
Operation
Improvement
Management review
Figure 8. 1
57
Corrective action
The organization should establish a process for defining responsibility

and authority for implementing action to eliminate the cause of
nonconformities in order to prevent recurrence. Corrective actions
should be appropriate to the effect of the nonconformities encountered.
A process should be established to define requirements for:
a) reviewing nonconformities;
b) determining the cause of nonconformities;
c) evaluating the need for action to ensure that nonconformities do
not recur;
d) determining and implementing the action needed;
e) recording the results of the action taken; and
f) reviewing corrective action taken. (Smith, 2001)
In the case of management of customer satisfaction, nonconformities may
mean failures in the implementation of the system or customer
dissatisfaction. Note that d), e) and f) are included in the processes for dealing
with customer complaints.
The corrective action might involve compensating the customer or, in the
case of an unjustified complaint, preparing a defence if appropriate in that
case. On many occasions, to foster good public relations, some organizations
(particularly retail) may give customers the benefit of the doubt and even
allow flagrantly dishonest claims. The extent to which an organization does
this should be the subject of policy. A supermarket will usually exchange
damaged fruit with only a cursory examination. It will be more difficult to
convince a car dealer to exchange a car.
If there are complaints, they may be justified or not. In either case, the
customer needs to be informed what action is going to be taken or, if no
action is to be taken, the reason for that (eg appropriate action has already
been taken or the product is discontinued). If the complaint is justified,
remedial action needs to be taken to satisfy the customer. Also, corrective
action needs to be taken to correct the process that resulted in the delivery
or realization of an unsatisfactory product or service. Preventive action
needs to be taken to avoid the recurrence of the problem.
There are some cases where it is inevitable that some products will be
faulty (not all seeds will germinate, not all plants will grow, not all meals
will be perfect). In such cases, the supplier may wish to implement and
advertise (except perhaps in restaurants) a replacement policy.
The risk of failing to meet expectations can be laid off to a third party
such as an insurance company.
58
Improvement
Preventive action
The organization should establish a process for defining responsibility

and authority for implementing action appropriate to the risk. (Smith,
2001)
The ‘Determination of impacts and prioritization of aspects’ section in
Chapter 5 suggests a number of aspects of a business that could give rise to
various adverse impacts on customer satisfaction. These aspects and their
impacts should be identified, priorities assigned and, if they are considered
significant, assigned to a specific person to plan preventive action. For
example, in the aspects listed in Table 5.3 (see page 37, the preventive
actions given in Table 8.1 could be considered.
Table 8. 1 Preventive actions related to potential adverse impacts
Aspect Potential adverse impact Preventive action

Product quality Product performance failure Quality management system
Product safety failure Quality management
Product obsolescence Market research
Product recalls Quality management
Price Product overpriced, Market research, information
cost-cutting by competitors on competition
Luxury product under priced Market research
Delivery Slow, unreliable Monitor deliveries, have
alternatives
Expensive Keep alternatives in reserve or
give them part of the business
Environmental Effluents, pollution, noise, raw Environmental management
performance materials usage system. Involve local
environmental groups
Labour relations Adverse publicity Good personnel policy. Good
relationship with media
Unreliable production schedules Involve staff in decisions
Low staff morale and high Treat employees as
turnover important stakeholders
59
Aspect Potential adverse impact Preventive action

Legislation Litigation or fines Keep abreast of regulations
Join a trade organization
Retain a lawyer
Customer service Reputation, complaints, Monitor customer movements
customers defecting and complaints closely and act
sooner rather than later.
Retaining existing customers is
less costly than acquiring new
ones
Continual improvement
The organization should continually improve the effectiveness of the

management system through the use of the policy, objectives, audit
results, analysis of data from monitoring and measurement, corrective
and preventive actions and management review. (Smith, 2001)
This is a restatement of the use of the PDCA cycle to improve the system.
It is implicit that, if the system is improved, it will function more effectively
and lead to improved results and outcomes.
60
9. Management review

Implementation
Operation
Improvement
Management review
Figure 9. 1
61
Where is the wisdom we have lost in knowledge?

Where is the knowledge we have lost in information? (T S Eliot,
The Rock )
Any management system requires periodic review. When setting it up you

need to conduct an initial status review. Once the system is working, you
need to review it periodically to ensure that it is working properly and
achieving the required objectives.
Top management should review the organization’s management
system at planned intervals to ensure its continuing suitability,
adequacy and effectiveness. The review should include assessing
opportunities for improvement and the need for changes to the
management system, including policy and objectives.
Records from management reviews should be maintained. (Smith,
2001)
Customer expectations and needs are likely to change, particularly in a
competitive market, so qualitative and quantitative objectives may need to
be periodically updated.
Review input
The input to management review should include information on:

a) results of audits;
b) stakeholder feedback;
c) status of preventive and corrective actions;
d) follow-up actions from previous management reviews;
e) changes that could affect the management system; and
f) recommendations for improvement. (Smith, 2001)
Stakeholder feedback in the present context means customer feedback.
This should also include reports from the media, in particular consumer
publications, as well as solicited and, perhaps more important, unsolicited
comments received directly from customers.
Appendix 8 gives examples of checklists that can be used to determine
how effectively the organization is working towards achieving customer
satisfaction.
62
Management review
Review output
The output from the management review should include any

decisions and actions related to:
a) improvement of the effectiveness of the management system and
its processes;
b) improvement related to stakeholder requirements; and
c) resource needs. (Smith, 2001)
Customer satisfaction is the main stakeholder requirement that needs to be
met by this particular part of the management system. You have already
mapped interactions with other aspects of the business so that the effect of
changes in one aspect on others may be foreseen. Management must decide
and perhaps lay down in the policies the priorities between conflicting
objectives, eg quality/profitability/price/volume.
63
Appen d i x 1 . I M S fram ework
Elements
0 M an agem en t system
0 The organization should establish, document, implement and

maintain a management system and seek to continually
improve its effectiveness.
The organization should:

a) identify the processes needed for the management system and
their application throughout the organization
b) determine the sequence and interaction of these processes
c) determine criteria and methods needed to ensure that both
the operation and control of these processes are effective
d) ensure the availability of resources and information necessary
to support the operation and monitoring of these processes
e) monitor, measure and analyse these processes, and
f) implement actions necessary to achieve planned results and
continual improvement of these processes.
64
Appendix 1
Elements
1 Policy
1 Policy and principles 1 Top management should ensure that the overall policy:
a) is appropriate to the organization
b) includes a commitment to comply with all relevant
requirements and continually to improve the effectiveness
of the management system
c) provides a framework for establishing and reviewing
objectives
d) is communicated, where appropriate, and is understood
within the organization, and
e) is reviewed for continuing suitability.
65
Elements
2 Planning
2.1 Identification of aspects 2.1 The organization should establish a process for identifying
and risks those aspects of its operations which need to be controlled
and/or improved in order to satisfy the relevant interested
party(ies). This includes research and design. Where
appropriate, legal requirements should be identified.
2.2 Selection of significant 2.2 The organization should establish a process for prioritizing its
aspects to be addressed aspects, so that those that would have a significant impact are
readily identified for control measures where this is appropriate.
2.3 Objectives and targets 2.3 Top management should ensure that the objectives, including
those needed to meet requirements for product and/or
service, are established at relevant functions and levels within
the organization. The objectives should be measurable and
consistent with the policy.
2.4 Identification of resources 2.4 The organization should ensure the availability of adequate
human, infrastructure and financial resources. It should
determine and provide the resources needed:
a) to implement and maintain the management system and
continually improve its effectiveness, and
b) to enhance satisfaction by meeting requirements.
2.5 Identification of 2.5 The organization should identify the roles, responsibilities,
organizational structures, accountabilities and their interrelationships within the
roles, responsibilities and organization as far as needed to ensure effective and efficient
authorities operation. Top management should ensure the responsibilities
and authorities are defined and communicated within
the organization.
2.6 Planning of operational 2.6 The organization should identify those operations and activities
control that are associated with the identified significant aspects in line
with its policy, objectives and targets. The organization should
plan and develop the process necessary for effective
implementation of the operational control measures.
2.7 Contingency preparedness 2.7 The organization should establish and maintain a process for
for foreseeable events identifying and responding to any potential emergency
situation. The process should seek to prevent and mitigate the
consequences of any such occurrence.
66
Appendix 1
Elements
3 I m pl em en tati on an d
operati on
3.1 Operational control 3.1 The organization should ensure arrangements are in place at
the operational level that ensure that:
a) the objectives and requirements for the product/services
are being met
b) the necessary processes, documents, and resources
specific to the product/service are provided
c) the necessary verification, validation, monitoring, inspection
and test activities specific to the product/service are
instigated
d) the records needed to provide evidence of the realization
processes meeting requirements are produced.
3.2 Management of human 3.2 The organization should ensure that the personnel carrying
resources out activities on its behalf should be competent on the basis of
appropriate education, training, skills and experience to enable
them to undertake all their duties.
The organization should:

a) evaluate the effectiveness of the actions taken
b) ensure that its personnel are aware of the relevance and
importance of their activities and how they contribute to
the achievement of the objectives.
3.3 Management of other 3.3 The organization should determine, provide and maintain the
resources infrastructure needed to achieve its objectives. Infrastructure
includes, as applicable:
a) buildings, workspace and associated utilities
b) process equipment (both hardware and software), and
c) supporting services (such as transport or communication).
3.4 Documentation and its 3.4.1 Documentation requirements
control The management system documentation should include:
a) documented statements of the policies and objectives
b) a manual describing the working of the management
system (see 3.4.2 below)
c) documented procedures that are required by specific
standards
d) documents needed by the organization to ensure the
effective planning, operation and control of its processes, and
e) records required by any specific standard.
Note 1 : Where the term ‘documented procedure’ appears, this

means that the procedure is established, documented,
implemented, controlled and maintained.
Note 2: The extent of the management system documentation can
differ from one organization to another due to:
a) the size of organization and type of activities
b) the complexity of processes and their interactions, and
c) the competence of personnel.
67
Note 3: The documentation can be in any form or type of medium.
3.4.2 Integrated management system manual

The organization should establish and maintain a manual that
includes:
a) the scope of the management system, including details of
and justification for any exclusions
b) the documented procedures established for the
management system, or reference to them, and
c) a description of the interaction between the processes of
the management system.
3.4.3 Control of documents
Documents required by the management system should be
controlled. Records are a special type of document and should
be controlled according to the requirements of those specific
standards covered by the IMS.
A documented procedure should be established to define the

controls needed:
a) to approve documents for adequacy prior to issue
b) to review and update as necessary and re-approve
documents
c) to ensure that changes and current revision status of
documents are identified
d) to ensure that relevant versions of applicable documents
are available at points of use
e) to ensure that documents remain legible and readily
identifiable
f) to ensure that documents of external origin are identified
and their distribution controlled, and
g) to prevent the unintended use of obsolete documents, and
to apply suitable identification to them if they are retained
for any purpose.
3.4.4 Control of records
Records should be established and maintained to provide
evidence of conformity to requirements and of the effective
operation of the management system. Records should remain
legible, readily identifiable and retrievable. A documented
procedure should be established to define the controls needed
for the identification, storage, protection, retrieval, retention
and disposal of records.
3.5 Communication 3.5 The organization should determine and implement effective
arrangements for communication:
a) between the various levels of the organization as
appropriate to their needs
b) for receiving, documenting and responding to relevant
communication from external interested parties.
3.6 Relationship with suppliers 3.6 The organization should formalize its arrangements for those
and contractors who supply and contract their services, both internal and
external, which have an impact on the organization’s performance.
68
Appendix 1
Elements
4 Performance assessment
4 General 4 The organization should establish and measure the

characteristics of the product and/or services to verify that
requirements have been met. This should be carried out at
appropriate stages of the process in accordance with the
planned arrangements.
4.1 Monitoring and 4.1 The organization should establish and maintain arrangements
measurement to monitor and measure, on a regular basis, the key
characteristics of its operations and activities that can have a
significant impact. This should include the recording of
information to track performance, relevant operational
controls and conformance with the organization's objectives
and targets. The organization should establish and maintain a
process for periodically evaluating the performance against
stakeholder requirements.
4.2 Analysing and handling 4.2 The methods used for analysing performance should
nonconformities demonstrate the ability of the processes to achieve planned
results. When planned results are not achieved, corrective
action should be taken. Evidence of conformity with the
acceptance criteria should be maintained and recorded.
4.3 Management system 4.3 The organization should establish and maintain a programme
audit for periodic management system audits to be carried out, in
order to determine whether or not the management system:
a) conforms to planned arrangements for the management
system
b) has been properly implemented and maintained, and is
being adhered to.
The audit programme, including any schedule, should be based
on the results of risk assessment of the organization’s
activities, and the results of previous audits. The audit
arrangements should cover the scope, frequency,
methodologies and competencies, as well as the responsibilities
and requirements for conducting audits and reporting results.
Wherever possible, audits should be conducted by personnel
independent of those having direct responsibility for the
activity being examined.
69
Elements
5 I m provem en t
5.1 Corrective action 5.1 The organization should establish a process for defining
responsibility and authority for implementing action to
eliminate the cause of nonconformities in order to prevent
recurrence. Corrective actions should be appropriate to the
effect of the nonconformities encountered.
A process should be established to define requirements for:

a) reviewing nonconformities (including stakeholder comments)
b) determining the causes of nonconformities
c) evaluating the need for action to ensure that
nonconformities do not recur
d) determining and implementing the action needed
e) recording the results of action taken, and
f) reviewing corrective action taken.
5.2 Preventive action 5.2 The organization should establish a process for defining
responsibility and authority for implementing action
appropriate to the risk.
5.3 Continual improvement 5.3 The organization should continually improve the effectiveness
of the management system through the use of the policy,
objectives, audit results, analysis of data from monitoring and
measurement, corrective and preventive actions and
management review.
70
Appendix 1
Elements
6 Management review
6.1 General 6.1 Top management should review the organization’s management
system at planned intervals to ensure its continuing suitability,
adequacy and effectiveness. This review should include assessing
opportunities for improvement and the need for changes to the
management system, including policy and objectives.
Records from management reviews should be maintained.
6.2 Review input 6.2 The input to management review should include information on:
a) results of audits
b) stakeholder feedback
c) status of preventive and corrective actions
d) follow-up actions from previous management reviews
e) changes that could affect the management system, and
f) recommendations for improvement.
6.3 Review output 6.3 The output from the management review should include any
decisions and actions related to:
a) improvement of the effectiveness of the management
system and its processes
b) improvement related to stakeholder requirements, and
c) resource needs.
71
Appen dix 2. Com m on el em ents of
m anagem ent system s and the I M S fram ework
Fram ework elem en ts ISO 9001 :2 000 ISO 1 4001 :1 996 OHSAS 1 8001 :1 999
clause clause clause
0 M an agem en t system
1 Pol i cy
1 .1 Policy and principles 5.1 , 5.3 4.2 4.2

2 Pl an n i n g
2.1 Identification of aspects and risks 5.2, 5.4.2, 7.2.1 , 4.3.1 , 4.3.2 4.3.1 , 4.3.2
7.2.2
2.2 Selection of significant aspects –– –– 4.3.3
to be addressed
2.3 Objectives and targets 5.4.1 4.3.3 4.3.4
2.4 Identification of resources 5.4.2 4.3.4 4.4.1
2.5 Identification of organizational 5.5.2, 5.5.3 4.4.1 ––
structures, roles, responsibilities
and authorities
2.6 Planning of operational control –– –– 4.4.6
2.7 Contingency preparedness for 7.1 , 8.3 4.4.6, 4.4.7 4.4.7
foreseeable events
3 I m pl em en tati on an d
operati on
3.1 Operational control 7.2 to 7.5 4.4.6 4.4.6

3.2 Management of human resources 6.2.2 4.4.2, 4.4.6 4.4.2, 4.4.6
3.3 Management of other resources –– 4.4.6, 4.4.4 4.4.6, 4.4.4
3.4 Documentation and its control 4.2 4.4.5, 4.5.3 4.4.5, 4.5.3
3.5 Communication 5.5.4 4.4.3 4.4.3
3.6 Relationship with suppliers and 7.2.3 4.4.5 4.4.5
contractors
4 Perform an ce assessm en t
4.1 Monitoring and measurement 8.2 4.5.1 4.5.1

4.2 Analysing and handling 8.3 4.5.2 4.5.2
nonconformities
4.3 Management system audit 8.2.2 4.5.4 4.5.4
72
Appendix 2
5 I m provem en t
5.1 Corrective action 8.5.2 4.5.2 4.5.2

5.2 Preventive action 8.5.3 4.5.2 4.5.2
5.3 Continual improvement 5.4.2, 8.5 –– ––
6 M an agem en t
6.1 General 5.6 4.6 4.6

6.2 Review input –– –– ––
6.3 Review output –– –– ––
73
Appendix 3. An example of a customer
satisfaction policy
PQR is a small engineering company making moulded plastics components

for a variety of uses: domestic appliances, toys, consumer goods, etc. It sells
to larger manufacturers and does not deal directly with the public.
Policy
PQR will provide moulded plastics components against specifications agreed
with the customers who have sub-contracted the work to us.
PQR will take care to ensure that the specifications meet the technical requirements
for the known uses and also any legislative requirements (eg for materials in contact
with food, emissions of volatile organic compounds, fire safety regulations).
PQR will inform customers of any technical improvements (design, formulation)
that may be applied to the products.
PQR will ensure that all staff are aware that achieving and improving customer
satisfaction is one of the objectives of the company and, where appropriate, one
of the objectives of individual staff members.
PQR will ensure that, where appropriate, staff members will receive training and
guidance in customer relations.
PQR will monitor customer satisfaction and keep records for each customer.
PQR will periodically review the current and future needs of existing and potential
customers to ensure that we can be flexible and adapt to changes in the market.
This does not have to be a specific written policy but the elements addressed
should appear somewhere in the policies or, particularly, in procedures and job
descriptions in the organization and should all be addressed and implemented.
74
Appendix 4. Process mapping
The processes in a business can be described in varying levels of detail. A

high-level process map could be shown in accordance with Figure A4.1.
Receive Make Dispatch Collect

order product product money
Figure A4.1 Simple high-level process chain

‘Receive order’ could include lower-level (more detailed) activities in sales
and marketing functions, call centres, communication with agents and
customers, stock control, and links to production, marketing, finance, etc.
‘Make product’ could involve a number of processes, each with their own
inputs and outputs; see Figure A4.2.
Water Power Labour
Raw material A
PROCESS Product C
Raw material B
Water Heat Noise Waste
Figure A4.2 Expansion of ‘make product’ element in Figure A4.1
75
I n pu ts
‘Raw material A’ and ‘Raw material B’ could involve testing and selection of
material, sourcing supplies, storage, quality control, movement, measuring
the quantity, safety precautions for storing and handling the material, etc.
‘Water’ and ‘power’ could also involve sourcing, quality control, and
storage. ‘Labour’ could involve not just the supervision but also the training,
health and safety aspects and other personnel functions.
Ou tpu ts
The outputs ‘water, heat, noise and waste’ could involve health and safety
considerations, personnel involvement, and environmental aspects.
The ‘Product C’ would also need testing, measurement, storage (perhaps
only in a buffer stock) and transportation to the next stage in the production
chain.
M appi n g th e processes
In order to manage the business, all processes and their interactions should
be mapped so that they can be properly monitored, controlled and
managed. It is important that, during that analysis, aspects that can
impinge on customer satisfaction are identified and taken into account.
The following questions may be appropriate:
• Is the manufacturing process noisy or smelly?

• Does it generate unsightly waste (smoke, waste materials)?
• Does the transport of raw materials, waste and finished product
bring itself to the attention of the public? (For example: waste skips,
heavy lorries, noisy deliveries or early morning or late night
deliveries. Most hypermarkets and supermarkets are out-of-town and
in non-residential areas so that deliveries do not annoy residents.
This is not purely altruistic.)
• Are the raw materials sourced ethically? (Even diamonds can now be
certified as being from non-conflict areas.)
76
Appendix 5. Evaluating customer satisfaction
The questions given in Figure A5.1 have been taken from PAS 46 and are used
to evaluate loyalty. They can be used equally well to evaluate satisfaction.
Based on your experience during the last six months, how

satisfied are you with ABC organization?
Very Somewhat Neither Somewhat Very
satisfied satisfied satisfied dissatisfied dissatisfied
nor
dissatisfied
Based on your overall experience, how likely would you be to

continue to use ABC organization in the foreseeable future?
Definitely Probably Might or Probably Definitely
would would might not would not would not
Based on your overall experience, how likely are you to

recommend ABC organization to a friend or colleague?
Definitely Probably Might or Probably Definitely
would would might not would not would not
Figure A5. 1 Examples of key questions for a customer questionnaire
77
Very Somewhat Neither Somewhat Very

satisfied satisfied satisfied dissatisfied dissatisfied
nor
dissatisfied
The quality of
ABC’s products
The range of
ABC’s products
The ‘value for money’
of ABC’s products
The knowledge and
skills of ABC’s sales
staff
The reliability and
efficiency of ABC’s
delivery service
The frequency of
contact from ABC
The accuracy of ABC’s
billing processes
Figure A5. 2 Examples of additional questions for a customer questionnaire
The following is an example of a scoring system to establish satisfaction

indicators. Each question is scored out of a maximum score of 100. The first
column, (very satisfied, definitely would, etc) scores 100 points, the second
column (somewhat satisfied, probably would, etc) scores 75 points and so on,
down to zero for the last column (very dissatisfied, definitely would not, etc).
For a given customer, add up all the scores and divide by the number of
questions to give an average. This can be regarded as a ‘satisfaction index’
for that customer and can be monitored periodically.
You can average the satisfaction indices for all your customers to give an
overall customer satisfaction index for the business. However, you should
bear in mind that the Pareto principle probably applies and 80 per cent of
your profits come from 20 per cent of your customers. It is not equally
important to satisfy all customers; some are more important and profitable
than others and it is more important to keep those happy.
78
Appendix 6. Outline plan of a complaints
management system (BS 8600:1 999)
NORMAL PROCEDURE ESCALATION PROCEDURE EXTERNAL PROCEDURE
Customer feedback received
- referenced and recorded by
recipient
Is there No
sufficient information Recipient seeks
to take action ? more information Customer advised of progress:
- who is handling complaint
- target time
- reference number etc.
Yes
Is there External No
sufficient competence Record passed to No review process
to take action ? escalation procedure: available ?
- further steps available?
Yes Yes Yes
Fast response In house review External review
Yes
Yes
Advise customer of
Proposed No Proposed No - legal rights
action agreed by action agreed by - and remedies
customer ? customer ?
Yes Yes
RESOLUTION
Follow up action:
-corrective and preventive action
- audit and review - complaints policy
79
Appendix 7. Outline model for a
simple manual
Owner……………………………………………….………
Date of issue………………Valid until……………………….(review date)
Scope
This manual covers the management of customer satisfaction and

management and resolution of customer complaints.
It covers existing customers, potential customers, agents and distributors
and members of the public who could represent customers.
It does not cover competitors, companies with whom this organization may
have business associations, or trade associations: such contacts may be
subject to special policies and agreements and are dealt with by the Directors.
Responsibilities
The owner of the policy is the Sales Director who reports to the Board of
Directors.
Procedures
This manual contains procedures for:
• measuring, recording and reporting customer satisfaction;

• managing customer complaints (including actions needed to resolve
them);
80
Appendix 7
• document control (including identification, distribution, maintenance

and storage).
I n teracti on s
This manual identifies the other departments (or people) who are to be
informed and who may need to act on this information:
• quality control;
• production;
• sales;
• finance;
• personnel;
• public relations;
• top management.
81
Appendix 8. Performance assessment
checklists
Our task is now not to fix the blame for the past, but to fix the course
for the future. (John F Kennedy)
To assess how well you are satisfying customers, you will need to decide on
the criteria of success. A good measure is the degree to which your customers
are satisfied and loyal, particularly where there is strong competition.
The checklists below give a range of factors that may need to be examined
and optimized to ensure that customers are likely to be satisfied and loyal.
It is up to those responsible for implementing the management system to
decide which of the suggested factors are important in their particular
organization and to add others if they see fit.
The checklists show a score against each item, a box for not applicable
and a box to mark if urgent action is needed. The scoring system is:
0 no evidence of this found;
1 early stages of progress;
2 active progress being made;
3 fully operational and well documented.
They also leave space for reference to a document that will give
corroborative evidence, preferably numerical. Without this, the answers
would be purely subjective and the scheme at the mercy of lazy optimists.
For example, on the question of satisfaction with delivery times, the reply
could refer to records analysing the causes of complaints over a given
period. Not everything can be measured but quantitative evidence should
be used wherever possible.
Such checklists can be used as an indicator of continuous improvement,
but only if the assessments are credible and verifiable. The checklists are
82
Ap p en di x 8
adapted from and broadly aligned with the requirements of the City &
Guilds NVQ/SVQ in Customer Service levels 2 and 3. The candidate packs
for this qualification give more detailed and further requirements,
explanations and examples of how to obtain evidence to verify that
requirements have been met.
No te:the form ‘you’ has been used in this appendix. It is meant to include
‘you, the organization’ or that part of it responsible for that aspect of the
operation being assessed.
1 . D el i very of prod u cts or servi ces to cu stom ers
Assuming that the product quality is at least satisfactory, timeliness is

probably the second most important factor for customer satisfaction. It is
an example of normal or expected properties of the product or service. If a
seven-day delivery is expected, three days will not usually delight the
customer. If three days is expected, seven will most probably annoy them
even if the timing was not critical.
Customers’ delivery requirements may change or become more critical. It
is therefore very important to keep careful watch on customer delivery
needs and ensure that they are being met.
Information is important. If you cannot meet a delivery date, inform the
customer as soon as possible with your new date and agree on any actions
that may help. Knowing that a delivery will be late is bad enough; not
knowing when or even whether it is going to arrive is intolerable.
C h eckl i st 1 . Assessi n g d el i very of prod u cts
Score Referen ce Acti on
I tem assessed n /a 0 1 2 3
Are the customers satisfied with delivery times?

Are the customers satisfied with the types of
products or services offered?
Are customers’ needs determined and
periodically verified?
Are new products/services developed in the
light of customer feedback?
Are there procedures in place to maintain
deliveries if the usual systems fail?
Are there procedures in place to deliver a
product very quickly in case of an emergency?
83
Are customers informed of any significant

delays and kept informed of the progress of
their orders?
Are relevant colleagues briefed and ready to
cooperate with measures taken to minimize
delays caused by problems in the delivery system?
Are delayed orders identified and highlighted?
2. I n form ati on an d d ocu m en tati on
You need to keep data on the satisfaction of your customers with the service
or product that you provide and on the needs or problems of key customers.
That information needs to be up to date, properly indexed and maintained
in accordance with written instructions, so that relevant personnel can
access that information and use it. If a key customer rings up with a query,
you don’t want to tell him or her to wait two weeks until the person
responsible for maintaining the data returns from holiday.
You may find it useful to keep a file on your key customers. This could
include, for instance:
• nature, size and potential (positive or negative) of business;

• size of company, market share;
• location;
• financial status (can be simple, like turnover, or more detailed);
• structure (activities, departments, links);
• decision makers, influencers;
• SWOT analysis (strengths, weaknesses, opportunities, threats).
You may also find it useful to have profiles of the decision makers with
details such as:
• position;
• length of service;
• principal objectives and concerns;
• attitude to your company.
84
Appendix 8
Such files would have to be kept confidential and not accessible to those
without the need to know. They can be useful for deciding how much
resource you can afford to expend to satisfy a customer.
All records should be examined periodically and culled to remove obsolete
clutter. If you are not sure whether or not a document can be discarded, you
can archive it where it is not immediately accessible but can be recovered.
There are many commercial companies that will archive files, either
physically as paper or microfiche, or electronically.
You should record data relating to customer satisfaction for tracking how
well you are achieving continuous improvement and how well you are doing
compared to your competitors.
C h eckl i st 2. Assessi n g d ocu m en tati on an d record keepi n g
Are records accessible, tidy and up-to-date?

Are records understandable and useable by
other people?
Is out-of-date information removed in an
appropriate manner in accordance with policies?
(Some information may need to be archived for
years; other information may be destroyed as
soon as it is out of date.)
Do staff clearly record proposals and outcomes
of discussions with customers and bring them
to the attention of relevant people?
3. D evel opm en t an d m ai n ten an ce of good worki n g
rel ati on sh i ps wi th cu stom ers
All staff are ambassadors of their company but ‘customer-facing’ staff

(whether they meet customers face-to-face, or over the telephone or e-mail)
have a profound effect on a customer’s perception of an organization and
their satisfaction with the product it delivers.
There are many companies that offer customer service training or there
are different levels of NVQs or SVQs (National/Scottish Vocational
Qualification) from institutions offering City & Guilds courses.
85
Dress code depends on the business but smartness does not. There may be
a perception that casual clothes indicate a casual approach. If in doubt, err
on the side of conservatism unless you are in show business or advertising
where flamboyance may be seen as a virtue. If you were travelling by air,
how confident would you feel if you saw the pilot or cabin crew wearing
scruffy jeans and a T-shirt on duty?
Your organization should have an agreed form of address when speaking
(or writing) to customers. How formal or informal depends to some extent
on the nature of the business. You would expect a shop assistant selling pop
music to be more informal than a funeral director.
It is important that, however helpful and friendly staff are to the
customer, their loyalty should be to the long-term benefit of the organization
that employs them. It is not uncommon for some staff to transfer their
allegiance to customers and become the customers’ champion. In colonial
days, this was known as ‘going native’ and caused problems then as now.
One way to avoid this problem of divided loyalties is to involve the customer-
facing staff in policy making and setting objectives so that they contribute
to and feel responsible for not just implementing but setting the
organizational objectives.
Many of the assessments in Checklist 3 are subjective but can be deduced
from reports or demonstrated by examples of behaviour, possibly for
discussion with the employee at periodic appraisal sessions. If there are any
obvious shortcomings, these should be discussed immediately and not wait for
appraisal time. Supervisors should be aware of the strengths and weaknesses
in their staff and should discuss corrective or remedial measures with the
members of staff themselves or, in more difficult cases, with their managers.
Letters of praise or complaint from customers are a valuable resource.
Use of first names is becoming more common than more formal forms of
address, particularly within an organization. However, you are less likely to
offend someone by too much formality than by too little. What effect do
telephone cold callers have on you when they repeatedly use your first name
without invitation? A standardized telephone response can be a good idea but
should sound natural, unforced and not formulaic. Discuss this with your
staff and colleagues. They are the ones who will have to use the response.
When dealing with complaints, emphasize what you can do rather than
what you cannot. It is essential that staff know their limit of authority. It
is useful if staff are allowed a given level of discretion when it comes to
refunds or discounts in response to valid complaints. Work out how much
staff time is spent on challenging claims and how much goodwill could be
generated by meeting them with good grace.
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Appendix 8
C h eckl i st 3 . Assessi n g worki n g rel ati on sh i ps wi th cu stom ers
Are staff courteous and helpful when dealing

with customers, particularly when dealing with
complaints?
Are staff appropriately qualified and trained?
Are staff smart and appropriately dressed?
Do staff project a positive image of the
organization?
Do staff maintain a proper balance between
the needs of the customer and those of the
organization?
Do staff minimize conflict between customer
and organizational interests?
Do staff try to solve customers’ problems
within the limits of their own authority?
Do staff know the limits of their authority and
to whom they should refer unresolved problems?
Do staff present organizational limitations in
a clear and positive way to customers?
Do staff explore possible flexibility in
organizational limitations with their management?
4. C om m u n i cati on wi th cu stom ers
When speaking or writing to customers, make sure that you have identified
the target audience correctly and address your comments at an appropriate
level and appropriate focus. You would discuss different points of detail
when dealing with a company buyer, the technical department or the
accounts department.
Customer feedback is essential. If you can involve a customer in the design
and execution of a product or service, and acknowledge their contribution,
they will feel a sense of ownership and their loyalty will be strengthened.
It is imperative that you and the customer are talking on the same
wavelength. You should recognize the level of understanding at which to
communicate with the customer.
Make sure that you know the customer’s needs. As these may change, it is
essential that you check that you and the customer have the same
87
understanding. (Some readers may remember the ‘Two Ronnies’ sketch set in
a hardware shop; does he want four candles or fork handles?) Communication
includes not just ways of delivering the written word but seminars,
demonstrations, open days, exhibitions, etc.
There is an old saying that is all too true in many cases: ‘The opposite of
talking is not listening, it’s waiting.’ Communication involves active
listening, not just waiting for the other person to stop talking so that we can
resume. Salesmen are taught to listen for 80 per cent of the time and talk
for 20 per cent.
You should ensure that you and whoever of your staff has direct contact
with customers observes the following basic rules:
While listening:
• don’t interrupt;
• listen and write down key points;
• ask for clarification if unsure;
• periodically summarize the situation as you see it to make sure
that you have not strayed off common ground.
If meeting face-to-face:
• maintain frequent eye contact;
• pay attention to your body language (be comfortable, neither
slouched nor stiff, lean forward slightly rather than back, don’t
cross your arms).
When talking to customers on the phone, don’t leave them on hold for more
than 30 seconds. If necessary, tell them you will phone them back within 5
minutes and stick to it, even if your follow-up call is only a holding call to
explain further delay. If you cannot be prompt, be informative.
When writing letters, get into the habit of using the spell-checker (or if
you are lucky enough to have someone to write letters for you, make sure
they use it). Try to avoid passive sentences (say ‘we will deliver the order
by…’ or ‘you will receive the order by…’ rather than ‘the order will be
delivered by…’).
The most popular word processing packages have grammar and style
checks that can be useful. Check the readability statistics from time to
time. You may be surprised. The Flesch reading ease (0 is the most difficult,
100 is easiest) ranges from about 30 to 40 for the broadsheets to 70 to 80
for tabloids. This appendix scores about 50 and the book as a whole about
40. Don’t use words or expressions that you do not fully understand and
cannot explain clearly. Your customer may see through the bluff. Use jargon
only if you know that you are both familiar and comfortable with it.
88
Appendix 8
Many organizations offer communications training and you may find it

useful to send key members for professional training.
C h eckl i st 4. Assessi n g com mu n i cati on wi th cu stom ers
Do staff use the most appropriate means of

communication with customers (phone, letter,
face-to-face, e-mail, etc)?
Are customers clearly aware of the product,
service and delivery to expect?
Do staff adapt spoken and written language to
the customer?
Are staff trained to communicate with
customers with special needs?
Do staff check with customers that they have
the same understanding?
Do staff routinely examine relevant
documentation (eg trade magazines) for
information relevant to customers?
Do staff accurately identify customers’
perceptions of their problems and check that
they are correct?
Is the information given to customers
appropriate, timely, accurate and does it meet
their needs?
Do staff inform customers about new services
and products that may meet their needs?
Do staff investigate novel or alternative
methods of communicating with customers to
improve effectiveness?
5. Sol vi n g cu stom ers’ probl em s
Checklist 5 is closely related to Checklist 3, dealing with working

relationships, and Checklist 4, on communication.
Recording these problems and discussing them with colleagues should
reduce the chance of the problem recurring. If it does recur, the knowledge
of how to deal with it will be widespread. Recurrent problems suggest a
fault in processing or procedures that needs correcting.
89
Focus on positive corrective and preventive actions for the future rather
than dwelling on the past. Post-mortems may teach us lessons but do not
help the victims.
Make your staff aware of the basic rules:
• Listen to the customer; if a problem is voiced, resist the urge to tell

them they are wrong or to make excuses.
• Look for solutions, not obstacles.
• Let the customer let off steam. They may be angry with the company
and not with you (unless you personally have done something wrong!)
• Sympathize, acknowledge and then discuss to agree on what the
problem is and how best to resolve it.
C h eckl i st 5 . Assessi n g u n d erstan d i n g of cu stom ers’ n eed s
Do staff understand customers’ perceptions of

what their needs and problems are and do they
get the customers to confirm the situation?
Do staff accurately and clearly summarize
customers’ needs and record them?
Do staff consult colleagues for information
regarding customers’ needs and problems?
Do staff consult colleagues and other sources
for possible solutions to customers’ problems?
Are recurrent problems reported to those who
have the responsibility and authority to remedy
the causes?
Do staff explore and identify new ways of
solving customers’ problems?
6. I m provi n g servi ce rel i abi l i ty
Most of the items given in Checklist 6 should be documented. One way

would be to hold regular meetings of the relevant people and minute the
conclusions and actions.
90
Appendix 8
C h eckl i st 6 . Assessi n g servi ce rel i abi l i ty
Do staff regularly seek comments on reliability

from customers?
Do staff use customer feedback procedures and
report the results to the relevant responsible
manager?
Do staff introduce improvements on their own
initiative within the scope of their authority?
Do staff communicate improvements that they
have introduced to their colleagues?
Do staff regularly evaluate procedures with
colleagues?
7. M ai n tai n i n g record s rel ati n g to cu stom er sati sfacti on
Records are an aid to action, not a substitute. Full and comprehensive records
that are so long and detailed that nobody has time to read them will not be
used and are therefore useless. Records should be clear, concise and accurate
and should be read and acted upon. How often have you heard a shop assistant
or a Council employee say ‘a lot of people complain about that’?
C h eckl i st 7. Assessi n g m ai n ten an ce of record s
Is documentation relevant, comprehensive and

correct?
Are reports clear and concise?
Are records regularly checked and updated?
Are improvements in the records focused on
customer needs and their efficient fulfilment?
Does the person responsible for the records
receive, acknowledge, consider and, if
appropriate, implement suggestions for the
improvement of the system?
Are the records clearly set out and accessible
so that they are easy to use by others?
Do the records conform to the requirements of
regulations regarding data protection?
Who, other than the writer, reads the records?
91
8. Organ i ze work pattern to respon d to th e
n eed s of cu stom ers
Much of today’s customer-facing contact is done via remote call centres;

some of them very remote such as the USA and India. Many of these offer
24 hour a day service (although we may have to sit through a lot of Muzak
to actually speak to someone).
Most shops, particularly in town centres, have learnt not to close for
lunch, the very time when office workers may want to do a bit of shopping.
However, one still comes across banks, post offices and railway ticket offices
that are understaffed because their employees want to go to lunch at a
conventional lunch-time. If you are tempted to allow this, your competitors
may not.
If you operate a flexible working hours system, make sure that it benefits
your customers as well as your staff.
C h eckl i st 8. Assessi n g staff work pattern s
Do staff make themselves available to customers

at times convenient to the customers?
Are staff approachable and welcoming to
customers?
Do staff seek advice and support appropriately?
(Neither exceeding nor avoiding exercise of
their level of authority.)
92
Appendix 8
9. Obtai n , an al yse an d u se feed back from cu stom ers
If you are trying to delight the customer, whom better to ask whether you
are successful?
You may wish to employ an agency to do the legwork and analysis or you
may prefer to do it in-house.
C h eckl i st 9. Assessi n g cu stom er feed back
Do you seek feedback and comments on service

from customers?
Do you use both positive and negative
comments from customers to evaluate existing
products and services?
Do you look for new ways of getting customer
feedback?
Do you analyse customer feedback to look for
trends and patterns?
Do you record and store customer feedback in
an accessible format?
Are proposed improvements based on accurate
information and interpretation of customer
feedback?
Do you predict customers’ needs based on their
feedback and do you check this with customers?
1 0. I n i ti ate ch an ges i n respon se to cu stom er req u i rem en ts
Feedback should be used for diagnosis, cure and improvement, not for a
post-mortem or apportioning blame. Information that is not used is
useless. It is important that staff communicate with each other to
encourage best practice.
You must ensure that a customer’s requirements are real and not just an
attempt to substantiate an underlying dissatisfaction.
93
Any improvements or changes made should refer to the reasons why the
change was necessary and should quantify the effects of the change.
Sometimes, you may need to make several changes to a system before it
really does what is intended.
C h eckl i st 1 0. Assessi n g respon se to cu stom er feed back
Do staff initiate action within their areas of

responsibility to improve service to customers?
Do staff alert others to improvements that are
needed outside their own area of responsibility?
Are changes based on careful analysis of the
information and feedback received from both
inside and outside the organization?
11 . E val u ate ch an ges d esi gn ed to i m prove
cu stom er sati sfacti on
If corrective or preventive action is taken or an improvement introduced, it

is essential to confirm that the action had the desired effect and to
determine how effective it was. Was the amelioration or improvement
sufficient? Will further action be necessary?
C h eckl i st 1 1 . Assessi n g ou tcom e of ch an ges
Do you monitor the outcomes of changes made

to improve customer service including the
customers’ perception of those changes?
Do you ensure that relevant colleagues are
aware of the changes and their effectiveness
and implications?
94
References
Standards, etc
BS 5701:1980, Guide to number-defective charts for quality control

BS 5702-1:2001, Guide to statistical process control (SPC) charts for variables –
Charts for mean, median, range and standard deviation
BS 5703 (all parts), Guide to data analysis and quality control using cusum
techniques
BS 6001 series (all parts), Sampling procedures for inspection by attributes
BS 8600:1999, Complaints management systems – Guide to design and
implementation
BS 8800:1996, Guide to occupational health and safety management systems
BS EN ISO 9001:2000, Quality management systems – Requirements
BS EN ISO 9004:2000, Quality management systems – Guidelines for performance
improvements
BS EN ISO 14001:1996, Environmental management systems – Specification with
guidance for use
OHSAS 18001: 1999, Occupational health and safety management systems –
Specification
PD 6663:2000, Guidelines to BS EN 1 2793: Value Management – Practical
guidance to its use and intent
PAS 46:2002, Improving loyalty – Requirements
Other publications
Ansoff, H. Igor (1957) Strategies for Diversification , Harvard Business School

Publishing
City & Guilds, NVQ/SVQ in Customer Service, Levels 2 and 3 candidate packs ,
City & Guilds, London
Jones, T and W Earl Sasser (1995) ‘Why satisfied customers defect’, Harvard
Business Review , Nov/Dec
95
Johnston, R (2001) Service Excellence = Reputation = Profit, Institute of

Customer Service, London
Kano, N, Seraku, N, Takahashi, F and Tsuji, S (1984) ‘Attractive quality and
must-be quality’, Quality Journal of the Japanese Society for Quality Control ,
14, 2, 147-156
Smith, D (2001) IMS: The Framework , BSI, London
Smith, D (2002) IMS: Implementing and Operating, BSI, London
Time Manager International/Institute of Customer Service (2002) UK National
Complaints Culture Survey 2001 /2002
Townsend, R (1970) Up the Organization (out of print)
96

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IMS:

The Integrated Management Systems (IMS) series of books provides

First published 2003

2. Initial status review 4

3. Policy and its development 24

6. Implementation and operation 44

Success is a journey, not a destination. (Ben Sweetland, American writer)

• plan what you are going to do based on your needs;

PDCA is plain common sense. It encompasses the process approach of

system is to achieve customer satisfaction, and its continual improvement

Identification of business needs

Policy and its development

Identification of business risks and aspects

Gap analysis of requirements vs current status

Check Performance assessment monitoring

Identification of business needs

Policy and its development

Identification of business risks and aspects

Gap analysis of requirements vs current status

Performance assessment monitoring

We must beware of needless innovations, especially when guided by logic.

Why satisfy the customer?

All organizations plan to survive and even to prosper and to expand.

• £8,365 for an organization with poor service;

He also reported that an increase of 5 per cent customer retention resulted

what he or she perceives to be a complaint, the manufacturer may generously

• Satisfied customers will continue buying your product or service.

This means that, as a requirement of ISO 9001:2000, customer satisfaction

Satisfaction is meeting or exceeding the customer’s expressed or implied

competitors are increasing the number of theirs or their market is growing

Figure 2. 2 Interrelationship between attraction, satisfaction, loyalty and retention

According to Jones and Sasser (1995) one can segment customers by

Loyalists: completely satisfied and a source of repeat business (can

Another related concept that is gaining popularity in some quarters is

customers and stakeholders. It helps define and validate corporate

Value to Value to Value to

Figure 2. 3 Customer satisfaction as a part of value management

What is our business?

• What is our core business?

There may be a core business and subsidiary businesses. Sometimes, the

cheerful version where price is the major consideration. The importance of

• What market segments do we serve?

Who are the customers?

Customers are the recipients of a product or service. They can be internal

• Are they large corporations, smaller organizations or private

– What are the criteria of satisfaction? (Quality, reliable delivery,

I n tern al cu stom ers

To help identify customer needs, the following questions may be useful:

• Do you have a breakdown of the types of customers you have?

In addition, for business customers the following questions are useful:

• Do you know how your product or service helps their business?

Relative importance: quality

If the organization is serving a wide range of customers, the management

High market Low market

Figure 2. 4 Boston matrix

A similar tool, introduced by the Harvard Business School in 1957 is the

New Develop product/ Diversify:

service - existing customers;

Figure 2. 5 Ansoff matrix