1 / 17

Return on Quality (ROQ): Making Service Quality Financially Accountable

Return on Quality (ROQ): Making Service Quality Financially Accountable. Roland T. Rust, Anthony J. Zahorik, & Timothy L. Keiningham. 指導老師 : 任維廉 教授 報告者 :9832515 許程詠. 自我介紹. 人種:嘉義人 經歷 : 協同高中→東海工工→交大運管 嗜好 : 上網,打球 論文方向 : 利用灰色理論在遺失資料插補的應用. Abstract.

blake
Download Presentation

Return on Quality (ROQ): Making Service Quality Financially Accountable

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Return on Quality (ROQ):Making Service Quality Financially Accountable Roland T. Rust, Anthony J. Zahorik, & Timothy L. Keiningham 指導老師:任維廉 教授 報告者:9832515許程詠

  2. 自我介紹 • 人種:嘉義人 • 經歷 : 協同高中→東海工工→交大運管 • 嗜好 : 上網,打球 • 論文方向 : 利用灰色理論在遺失資料插補的應用

  3. Abstract • The quality revolution has taken over the thinking of much of American industry. (Dean and Evans 1994) • Highly competitive market require that customers must be satisfied by their purchases or they will go else where. ( Rice 1990) • Wallace company won the Quality Award in 1990 but high spending on Quality produced unsustainable losses so that bankrupt in 2 years. (Hill 1993) • Expenditures on quality do not have obvious profit implication (Aaker and Jacobson 1994)

  4. Abstract • The benefits of quality improvements come in two firms - The improved ability of the firm to attract new customers - Customer become repeat customers when they are satisfied with products.

  5. The ROQ Approach Assumption: • Quality is an investment • Quality efforts must be financially accountable • It is possible to spend too much on quality • Not all quality expenditures are equally valid

  6. Improvement Effort Service Quality Improvement A model of Service Quality Improvement and Profitability Perceived Service Quality and Customer Satisfaction Word-of-Mouth Cost Reduction Customer Retention Attraction of New Customers Revenues and Market Share Profitability

  7. Evaluating Financial Impact • AQ: Actual service Quality • S: Customer Satisfaction • CR: Cost Reduction • R: Customer Retention • MS: Market Share

  8. Drivers of Market Share • Customers retained = • Customers switching to us = • new customers = = • net present value (NPV) • Net present value with additional spending (NPVAS)

  9. ROQ • Let NPV and NPV0 be the net present values of the profit streams for the quality improvement effort and status quo ROQ=(NPV-NPV0)/NPVAS

  10. Driver of customer Satisfaction Process 1 Measures Dimension 1 of Process 2 Measures Customer Retention Measures Overall Measures Process 2 Measures Dimension 2 of Process 2 Measures

  11. Measurement Alternatives • Repurchase intention(重新購買意圖) • Service quality(服務品質) • Customer satisfaction(顧客滿意度) • Disconfirmation(不確定性) • Customer delight(顧客喜好程度) • Cumulative focus versus transaction focus (累積交易 vs 集中交易)

  12. The ROQ Quality Improvement Process Stage1: Preliminary Information Gathering Customer surveys Market information Internal Information Heavy use of management judgment Stage2: Identification of Possible Opportunities Stage3 :Limited Testing of Improvement to Determine Effectiveness Stage4: Financial Projections Based on Hard Data Stage5: Full Rollout of Quality Improvement Efforts

  13. Summary of Managerial Inputs 18 managerial inputs • The key management process must be indentified • Key dimensions of each process must be obtained • Customer retention (Or repurchase intention) • Customer satisfaction (Or a suitable substitute) • Market size must be measured • Current market share must ne estimated • Churn must be estimated • The company’s current retention rate must be estimated • The attraction percentage must be obtained • The market growth rate must be estimated

  14. Summary of Managerial Inputs • The contribution margin from an average customer must be estimated • The cost of capital must be determined • The time horizon must be specified • A specific quality improvement alternative must be identified • The additional expenditures related to this improvement effort must be estimated • Cost savings must be estimated • The satisfaction shift must be estimated • Market test data may be obtained

  15. An Illustration Application • A National Hotel Chain disappointed group(9%): 45% return Satisfied group(75%): 95% return Delight group(16%): 97% return • Calculate ROQ

  16. Conclusions • This article presented a financial approach to quality improvement (ROQ) • Made quality improvement financially accountable • Let manager determine where to spend on service quality

  17. Thanks for your listening

More Related