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Which Customers Should A Six Sigma Company Listen To?

Jul 14, 2008
You have to concentrate on the organization's strategy - and it market leadership and value establishment, then the voice of the customer is of utmost importance. Any improvement to the existing system is worthwhile only when the returns are in the form of satisfied customers.

The need for continuous innovation is the result of growing customer demands and technological challenges.

Determine the Customer

The important point that arises here is which customer to listen to. There will be a large range of customers who are being catered to by most companies. For example a credit card company will have customers ranging from retired people, newly married couples, high earning singles, and so on.

They may even be miners, farmers or self-employed customers. Each segment will have its own demands, and the organization has to decide which voice to listen to.

Market Matrix

One way to decide which customer to listen to is by making a product or market matrix - a matrix of products and their targeted markets. This will help companies understand which products are suited to which market, and most importantly, the variance in the product lines which will provide a direction to the voice of the customer.

Some criteria to identify which market or product to use would be the market size, growth rate, the margins in the product, market share and the competitiveness of the product. The Six Sigma team can identify the problem by talking to the customers and employees, compute the cost of these problems and identify the solution to remove these problems in the beginning. The positive result from this is an increase in profitability and the building of loyal customers.

Elimination of products from the Six Sigma project would be done depending upon the outcome of this study. For example, home mortgages would be suited for new married couples and high earning singles more than retired customers. Not that they would not be useful for retired customers, but Six Sigma efforts will have to be based on the voice of the other groups of customers.

In short, the Six Sigma project will not invest in the retired customer segment as much as married couples or self-employed people.

Value for Money

Customer satisfaction is not the voice of the customer. It is not linked to market performance. Happy customers may not necessarily be loyal customers or profitable ones. In spite of having good scores in customer satisfaction, some companies have realized that their market share is down.

To increase market share, prices don't necessarily need to be reduced - but companies do need to check if they are giving value. Between quality and price, what the customer wants is value, and value proves to be the best forecaster of market share.

For Six Sigma initiatives to succeed, knowing which customer to listen to is most important in developing a consistent long-lasting strategy. Giving value to the customer means adopting new improved strategies that are aligned to the organization's objectives.
About the Author
Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solution's Six Sigma Online offers online six sigma training and certification classes for six sigma professionals including, lean six sigma, black belts, green belts, and yellow belts.
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