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CUSTOMER SATISFACTION MEASUREMENT
It should not be thought that Federal Express ignores its customers’ perceptions of its performance. The company has logged customer complaints since the early 1980s and uses the information in internal evaluations of systems. Originally, Fred Smith dubbed these customer complaints “The Hierarchy of Horrors,” a listing of the eight most common customer complaints. In order they are
1. Wrong day delivery
2. Right day/late delivery
3. Pick-up not made
4. Lost package
5. Customer misinformed by Federal Express
6. Billing and paperwork mistakes
7. Employee performance failures
8. Damaged package
The importance of “The Hierarchy of Horrors” was that it clearly indicated that there was more to measure than just on-time delivery.
SERVICE QUALITY IVDICATORS
In the late 1980s, Federal Express decided it needed a more proactive, comprehensive, and customer-oriented measure of performance. Instead of eliminating the “Hierarchy of Horrors,” the company borrowed from it. Breaking down the customer’s concept of quality service into components, the “Hierarchy of Horrors” listed all the things that could go wrong with an overnight delivery. This list, combined with methods of measurement, evolved into the service quality indicators (SQI, pronounced “sky”) shown in Exhibit 3. SQI accounted for every package that entered the FedEx system, and each of the 12 indicators measure service quality from the customer’s point of view. Each customer complaint was assigned points and given a weight. For example, a lost package had a weight of 10, and a right day/late delivery had weight of 1. Combining the number of failures at the appropriate weights produced a record of total daily failure points. This figure was tracked, compared with projections, and communicated to every employee on a daily basis through FXTV, the world’s largest private television station.
Anthony Byrd, a senior project analyst and author of Sections 6 and 7 of the MBNQA application, talked about the challenges of measuring quality in a service company as follows:
The MBNQA application has manufacturing biases; it relies heavily on statistical process control. We tried to impress upon the MBNQA examiners that quality is our basis of competition in the marketplace. Our strategy is to offer enhanced value through quality service, and we go beyond the quality-control measure. We go beyond sampling; we take a census of all our packages. This gives us performance figure on every package that goes through the system, and we communicate those figures to all the employees. This puts us in our own league.
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