Newspaper article The Christian Science Monitor
Customer Satisfaction Seen as Barometer of Success
THE old business maxim of "listening to your customers" has traditionally tended to be more observed in principle than practice, according to management experts. Rather, corporations have measured their performance by balance sheet data such as sales, earnings, and market share. But corporate officers are learning that boosting customer satisfaction can also boost profits.
Automobiles are one example of a United States industry that lost market share in recent years because of a failure to tailor its products to customer needs. That pattern may now be changing. Chrysler Corporation conducted an extensive survey of its minivan owners in order to determine what changes needed to be made in its new van line, which rolls onto showroom floors next month. Chrysler has dominated the minivan business since its introduction in 1983, but faces competition from other US and Japanese carmakers.
McDonald's Corporation, which dominates the fast-food business, listened to customers and critics by introducing a low-fat product line and starting to recycle its food packages, management experts say.
During the past four or five years, "there's been a complete change of perception within US industry about exactly what is `quality,"' says David Fagiano, president of the American Management Association, an industry trade group. American companies are not only returning to a focus on quality, but in doing so are paying more attention to customer needs, he says. "It's now recognized that `quality' is only what the customer says it is," says Mr. Fagiano, noting that market-surveying of customers by corporations is at a peak.
Many companies, such as McDonald's, are becoming more accountable to the concerns of their customers and the public, says Alice Tepper Marlin, executive director of the Council on Economic Priorities, a public interest group. But too many companies are "still dragging their feet," she says.
"If you think about it, the ultimate purpose of business is customer satisfaction," providing products or services that meet specific needs, says Claes Fornell, a business professor at the University of Michigan. …