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Customer Satisfaction: Improving Marketshare, Regulatory Compliance and Patient Care Part I

Mary Larweck,
BSN, MS, CIC, CPHQ- Consultant, Emerald Quality Services, Mpls, MN
Stephanie Kendall, Executive Consultant, Gantz Wiley Research

What do Deming, Juran and Crosby have in common? The principles:
Focus on the customer,
Work as a process and
Keeping in mind that when the focus is on the customer, quality begins to happen!

Customer satisfaction has changed over time just as the evolution of quality improvement: Beginning with marketing data and outcome measures, moving to benchmarking and utilizing findings to improve products and services, and ultimately bringing the voice of the customer to day-to-day operations.

Challenges for business today that impact customer relations include mergers, acquisitions, changing demographics and the changing workforce….Acquiring and retaining skilled employees is a key ingredient in an organizations ability to serve its customers. The average US company loses over 50% of its employees every 4 years (Reicheld, The Loyalty Effect, 1996). In addition, the average US corporation loses 50% of their customers in 5 years. Keep in mind at least 5 times as much resource is needed to acquire new customers as it does to retain existing ones (TARP, 1999).

So why do customers defect? Forum Corporation Research found:

30% defect because of better product/price
20% defect due to poor customer contact and
49% defect because the attention they did receive was perceived as poor quality.
The example below shows the strong relationship between satisfaction and retention for a healthcare organization. While 83% of all patients intend to remain with the health plan, the retention rate jumps to 90% for those customers who are very satisfied overall. The retention rate for those who are merely satisfied are still respectable at 77%. Translating this, however, there is a difference of 13% in retention. You can also see from the graph, that when customers are less than satisfied, it is very difficult to retain their business. Customer research verifies that with few exceptions satisfaction is a prerequisite for loyalty.

The focus for this article is tying customer satisfaction to the following three areas:

Maintaining/improving marketshare
Addressing regulatory compliance
Improving patient care services


Customer satisfaction studies need to first define customer expectations, then affirm and periodically track satisfaction to verify and measure the impact of improvements/changes. Efforts also need to be focused on the key market share segments to align efforts and resources strategically. The right measures are critical for getting the right information. Your survey should include measures of expected quality (e.g., that staff responds promptly to calls for assistance), desired quality (e.g., clear and reassuring/empathetic explanations of tests and procedures) and excited quality (e.g., staff prepared to anticipate your needs before they arise). When focusing on marketshare, it is also important to consider how your customers view you in light of alternatives they have available. A shift in competitive offerings (e.g., another clinic that schedules evening appointments) can dramatically impact your customers' perceptions and satisfaction with your services.

Regulatory Compliance

For many of us a new and emerging arena for customer surveys is that of complying with regulations. ISO now requires demonstration of a measurement method and a follow-up process for customer input. In healthcare, NCQA and JCAHO have required such measurement and effective actions for a decade or longer. For example if an agency had received a complaint about ER waiting time, customer satisfaction data as well as admission logs, could be used show overall performance, both in real time measures and in measures of customer perception/satisfaction. Customer satisfaction surveys also provide a vehicle for proactively monitoring regulatory requirements from a patient's viewpoint. Surveys can be used to identify problems, hazards, assess product quality, and provide a way to assess "the voice of the customer."` Examples might include asking questions regarding explanation of tests and procedures or patient privacy and confidentiality. Effective survey programs will also include a mechanism where customers can request follow-up regarding specific issues.

Patient Care and Satisfaction

Customer satisfaction data can be used to identify improvement opportunities and measure the improvement process, as adjunct to the popular improvement approach, PDCA (Plan, Do, Check, Act); helping identify the problem and check the results. Customer satisfaction data can provide both quantitative (measurement) and qualitative (comment) information. The ongoing tracking of customer satisfaction is a natural check step to the process. For example, a customer satisfaction survey identified communication of possible side effects and what to do about them as an opportunity for improvement. After updating printed materials and staff involvement in the development of a standard protocol, the ongoing tracking study provided a check on the effectiveness of the actions.

Identifying Improvement Areas from your Customer Survey

Whether your objectives are to improve marketshare, comply with regulatory requirements or improve patient care, surveys can identify a myriad of possible improvement areas. How does the organization decide on which opportunities to focus? Three excellent techniques to help prioritize areas for improvement are Pareto charts, key driver analysis and scatterplots.

Part II of this article will appear in the January 2003 issue. It is devoted to the use of the three tools, Pareto chats, key driver analysis and scatterplots to understand and use customer survey data to prioritize and improve key outcomes.

ASQ Foundations In Quality Learning Series - Certified Quality Manager Module #4: Customer-Focused Organizations, ASQ Holmes Corporation, 2001.

Voice of the Customer, GOAL/QPC Research Committee Research Report #R9501, 1995.

Reichheld, Frederick F., The Loyalty Effect, HBS Press. 1996.

TARP, Basic Facts of Customer Complaint Behavior and the Impact of Service on the Bottom Line, Competitive Advantage, 1999, 1-5.

Bell, R., Krivich, M.J., How to Use Patient Satisfaction Data to Improve Healthcare Quality, ASQ Press, Milwaukee, 2000.

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