You know that both internal and external users have not only the short-term succ
ID: 2353611 • Letter: Y
Question
You know that both internal and external users have not only the short-term success, but also the long-term success of the company at the forefront of their minds. One way that users work to determine short-term and long-term success is by use of the Balance Sheet. On the Balance Sheet a user may look at Retained Earnings along with the portfolio of assets displayed and compare that to the liability side of the Balance Sheet.How can your role as an accountant ensure that the information presented does not include errors, and how would you support your claims?
Explanation / Answer
Internal customer is a technical term used in management science popularized by Joseph M. Juran. He defined internal and external customers as anyone affected by the product or by the process used to produce the product, in the context of quality management. Internal customers may play the role as supplier, processor, and customer in the sequence of product development. An internal customer or internal service provider can be anyone in the organization. An internal customer can be a co-worker, another department, or a distributor who depends upon us to provide products or services which in turn are utilized to create a deliverable for the external customer. In general, internal customers don't have a choice. For example, if the sales department doesn't like accounting's credit policies, they can't fire that department and hire another. He claimed that the organization must understand and identify both internal and external customers and their needs. The organization must focus on its primary task of satisfying the customer’s requirements and expectations. If one department, individual or process within an organization supplies another such within the same organization with goods, information or services then the latter is described as the internal customer of the former. For example, a dispatch department may be the internal customer of a packing department, which in turn may be the internal customer of the manufacturing process. Juran advocated 'exceeding the customer's expectations.' External Customers: External customers are those persons who come from the outside to fulfill their needs.e.g.the common people The external customer is someone who signs a check, pays our employer, and ultimately makes our paycheck possible. External customers have choice, and if they don't like your product or service can take their business elsewhere WHY INTERNAL CUSTOMERS ARE IMPORTANT? Why they are so important? Because how we service each other is how we probably service our customers. What are the benefits of selling (ourselves) and servicing our fellow employees (our internal customers?) First of all they are they fundamental asset of an organization, without which an organization can’t run its business Servicing the internal customer creates opportunities to expand our network of people available to assist us in a variety of situations. The more you meet with fellow employees or talk to them, the more you are aware of how they can assist you and in turn assist the customer. You have better opportunities for advancement because your interest in others increases your knowledge of your institution. You provide quality service on a consistent basis to all customers- internal or external! And if we talk in terms of satisfied internal customers than they become important because. Unhappy employees are less productive and more likely to have higher absence rates Satisfied employees are more productive, innovative, and loyal Increases in job satisfaction lead to increases in employee morale, which lead to increased employee productivity Employee satisfaction leads to customer retention Between 40 and 80 percent of customer satisfaction and loyalty is determined by the customer-employee relationship, depending upon the industry and market segment. Internal customer service is recognizing that everyone has a role in servicing the needs of the external customer. One branch customer service representative stated how she feels about internal customers: "I need the expertise of our back office people. I realize that if I provide the necessary information, they can cut through many of the obstacles and solve customer problems quickly. I've developed a relationship with them, and call them as needed. And, when the problem is solved, I call to thank them. Also, our office sends cards to back office departments to show our appreciation. I think it is that recognition that lets them know they helped us and the customer is satisfied." There is a bonus to mutual appreciation between front line and operations. Your customers will recognize the fact that yours is a happy, cooperative organization, and the benefit will be quality customer service. You just can't keep that kind of information secret! How Poor Internal Customer Service Affects External Customers While companies focus thousands of dollars on external customer service in hopes of wooing and retaining customers, little attention is being paid to the effect poor internal customer service has on overall customer satisfaction. It all starts within your organization! Sooner or later the ripple effect reaches your external customers. To really walk your service talk your commitment to internal customer service must match your company's external focus on customer care. When we think of customer service we think of staff serving customers over a counter or over the phone. But customer service occurs within your organization as well. How well does staff serve its internal customers: other departments, its management, vendors and consultants? Believe it or not, it all counts. Internal customer service refers to service directed to others within your organization. It refers to your level of responsiveness, quality, communication, teamwork and morale. We can define Internal Customer Service as effectively serving other departments within your organization. How well are you providing other departments with service, products or information to help them do their jobs? How well are you listening to and understanding their concerns? How well are you solving problems for each other to help your organization succeed? It effects in following ways…. It’s a general phenomenon that being an employee you can only satisfy your customer when you are being satisfied by the organization, otherwise in case of dissatisfaction surely you will not treat your customers in well manner and this can result in external customer dissatisfaction. It can result in absenteeism, which will affect the service level and will ultimately results in external customer satisfaction. It can also result in employee’s turnover, which as a result can affect the service level of the organization, and hence can dissatisfy the external customers eventually. Defining customer satisfaction Because the concept of customer satisfaction is new to many companies, it's important to be clear on exactly what's meant by the term. Customer satisfaction is the state of mind that customers have about a company when their expectations have been met or exceeded over the lifetime of the product or service. The achievement of customer satisfaction leads to company loyalty and product repurchase. There are some important implications of this definition: Because customer satisfaction is a subjective, non quantitative state, measurement won't be exact and will require sampling and statistical analysis. Customer satisfaction measurement must be undertaken with an understanding of the gap between customer expectations and attribute performance perceptions. There should be some connection between customer satisfaction measurement and bottom-line results. "Satisfaction" itself can refer to a number of different facts of the relationship with a customer. For example, it can refer to any or all of the following: Satisfaction with the quality of a particular product or service Satisfaction with an ongoing business relationship Satisfaction with the price-performance ratio of a product or service Satisfaction because a product/service met or exceeded the customer's expectations Customer Satisfaction Measurement Facts A 5-percent increase in loyalty can increase profits by 25%-85%. A very satisfied customer is nearly six times more likely to be loyal and to repurchase and/or recommend your product than is a customer who is just satisfied. Only 4 percent of dissatisfied customers will complain. The average customer with a problem eventually tells nine other people. Satisfied customers tell five other people about their good treatment. Identifying Internal Customers and Measuring Their Satisfaction Satisfying customers could be described as a company's ability to generate genuine teamwork among all departments in the organization: sales, marketing, credit and receivables, manufacturing, distribution, packing and shipping, quality, production planning, etc.; and to instill in every individual the constant awareness that customer service is everyone's business. This description emphasizes the importance of customer service as an organizational responsibility. However, too often, a single department in a vertically structured organization is held accountable for apparent customer service failures that, for the most part, originate outside that department's responsibility and are beyond its control. Deductions and disputes are prime examples of costly process problems within a company that could often be avoided or at least, the resolution could be hastened, through better customer service or communication. A key premise in customer satisfaction understands the needs and meeting, or exceeding, the expectations of customers. Furthermore, this is done while optimally using resources. While most companies have developed strategies to improve quality and external customer service, internal customer satisfaction is a much neglected component of quality improvement. To this end, it is important to emphasize that total customer satisfaction can be attained only if all employees, devoted to external customer satisfaction, can work together and assist each other to achieve the common objective. In this case, each person must improve what is around them and look for ways to satisfy the requirements of others in the organization efficiently. This requires a climate that encourages and supports teamwork in addition to the promotion of a general ethic of continuous improvement. The basis of this stems from the fact that there cannot be total customer service unless all employees are supporting each other and working together toward common goals. In short, total customer service means meeting the needs and expectations of both internal and external customers. Internal Customer Satisfaction Customer is the king; this is all the more apt for today's business environment where, all other factors remaining more or less constant, it is the value addition to the customer that is making all the difference. Customer satisfaction depends on the performance relative to expectations. Customer satisfaction survey is the process to monitor the satisfaction quotient of their people. In internal satisfaction surveys therefore tracks the return on your investments in keeping your people happy, high salaries, a quality culture, a healthy work environment. Last, but not the least internal customer satisfaction survey helps in finding the critical areas, which need further improvement. Need of Internal Customer Satisfaction Survey arises due to following reasons. Rapidly growing organization. High or growing turnover rate. Excessive rumor's Highly competitive industry. Planned and recent organizational changes. BENEFITS OF AN INTERNAL CUSTOMER SATISFACTION SURVEY It creates better teamwork and much improved work process. It leads to higher output and superior quality product. It decreases the turnover. Reduced overheads, and increase customer satisfaction level's inter departmental. It enhances communication and hence helped in team building, hence there is less wasted effort caused by lack of common purpose and poor communication. A good employee feedback survey improves employee attitude and boosts morals. INTERNAL CUSTOMER-SUPPLIER RELATIONSHIP In an organization, from procuring an order to delivering the final product, a series of activities takes place. There are different deptts. To which these activities are assigned e.g. Raw material for production is purchased by one deptt. And supplied to other deptt. Where the production initiates. Thus every deptt. Play an important role of a customer and supplier as well. The importance of a customer is well known from the maxim, “Customer is the king”. Earlier, organizational administrators concentrated only on the satisfaction of external customers i.e. the target market. But now it is being realized that if the internal customer is satisfied the quality as well as the quantity is also appreciable. Higher the customer satisfaction index, higher will be the quality of the production. This results in the satisfaction of external customers and ultimately brings profits & prosperity to the organization. It can benefit the organization in following ways:- 1) There will be less employee turnover. 2) Optimum utilization of available resources will take place. 3) High job satisfaction and feeling of belongingness in employees. 4) Qualitative product. 5) Least conflicts in the departments. 6) Good reputation in the market and many more benefits can be accrued. Thus, every deptt. Should ensure that the customer deptt. is satisfied with the product and services provided by it as it will result into an overall improvement of the organization. Internal Customer Satisfaction Process It consists of the following major steps. Identify internal customers. Evaluate the role of the credit, collection and accounts receivables administration (as a functional group) within the organization (self evaluation). Determine actual performance level through survey of internal customers. Determine the level of satisfaction required within the organization through survey of internal customers. Measure satisfaction level of internal customer with respect to needs and expectations. Identify improvement opportunities in work process required. Determine process potential and develop action plans for better service. Monitor, control and update. Internal and External Customer Service Why is this important? It is the fastest and best way to increase sales and productivity. What’s in it for you? You will put more money in the bank, get new customers automatically, be admired by the competition, and have the highest possible productivity. External customer service Customer loyalty is created by strong relationships where the customer feels special and important. People buy products and services on an emotional feeling. The feeling can be to feel good, safe, effective and even to increase their confidence. Customers buy a product for the same reason. If the product or service gives them a good feeling, they will continue to buy that over and over again. But, if the company that sells that product doesn't make them feel important or special, they will buy it somewhere else. The customer is your paycheck! This is what most companies fail to realize! The customer pays for the entire staff’s living, car payments, vacations, food, etc. The employees think that the money they make comes from the company. Yes, someone at the company signs their checks, but the money comes from the customers. If the staff begins to understand this, they will treat every single customer differently. They would make sure that the customer service and customer relations would be on top, always. Let’s look at how we treat our guests at home. We dress nice, plan and prepare for their arrival, set the table with the nicest chinaware, glasses, and silverware, etc. When our guests arrive, we smile and say welcome. We compliment them on their choice of clothing, and our highest priority is that they will have a great time. When they leave we thank them for visiting, and we don’t mind if they tell some friends what a great time they had at our house. Imagine if you and your associates put the same effort into every customer that walks in your front door. After all it is the customers that make it possible for you to invite your friends into your home. It is the customers that pay for everything you own and will buy in the future. Imagine that every customer will feel the same way your friends do when they leave your house after a dinner or a party. Do you think they will come back over and over again? Do you think they will recommend you and refer you to everybody they know that can use your products or services? Customers act according to service and relations. Let’s look at how customers really act according to the experiences they get when buying from you. As you can see, satisfied customers are not loyal. Satisfied customers don’t refer you to other customers like loyal customers do. Which would you rather have, 100 satisfied customers or 100 loyal customers? Internal Customer service Your employees and coworkers are your internal customers and the care for them is actually the same as for your external customers. Their loyalty and productivity also depend on how they feel at work. Do they feel important and special? Do they get attention for their ideas and work effort? Just like customers, employees also perform according to relations and environment at their work. What kind of employees would you rather have? Employee is: Productivity Reliability? Keeps job? Loyal WOW! Extremely high! Extremely high! Always! Very satisfied ? ? Possibly Satisfied ? ? Maybe, if convenient Neither ? ? Probably not Unhappy ? ? No Very unhappy ? ? No way! Pissed off ? ? Guess! If you give more than expected you will get more than expected in return. To get loyal employees, you need to go beyond their expectations, just like your customers. They expect you to provide them with proper training to be able to perform their job duties. What if you go far beyond that? What would happen if you gave them training on personal growth? I am talking about growth in their careers and in their personal lives as well. Can you imagine what an impact it would make on each employee, if you taught them the habits of successful people? Why are some people successful and others not? It’s not that they are smarter or better than others. They’ve just learned how to develop the habits and attitudes that are necessary to be productive at work and to have a productive and happy life. The company that will provide this for their employees will have the most loyal staff and have people standing in line to work there. Imagine what that will do for the marketing of your company. Today’s companies are facing their toughest competition ever. These companies can outdo their competition if they can move from product and sales philosophy to a marketing philosophy. We spell out in detail how companies can go about winning customers and outperforming competitors. The answer lies in doing a better job of meeting and satisfying customers needs. Only customer-centered companies are adept at building customers, not just building product. They are skilled in market engineering, not just product engineering. Too many companies think that it is the marketing/sales department’s job to procure customers. If that department cannot, the company draws the conclusion that its marketing people aren’t very good. But in fact, marketing is only one factor in attracting and keeping customers. The best marketing department in the world cannot spell products that are poorly made or fail to meet anyone’s need. The marketing department can be effective only in companies whose various departments and employees have designed and implemented a competitively superior customer value-delivery system. Although the customer oriented firms seek to create high customer satisfaction, its main goal is to maximize customer satisfaction, first the company can increase customer satisfaction by lowering its prices, but results may be lower profits second the company might be able to increase prices. Third the company has many stake-holders including employees, dealers, suppliers and stock holders spending more to increase customer satisfaction might divert funds from increasing the satisfaction of other partner. Estimate the company must operate on the philosophy that it is trying to deliver a high level of satisfaction to the other stake-holder within the constrains of its resources. From the past studies of last three decades we observed that the company’s first task is to create and satisfy customers. But today’s customers face a vast array of product and brand choice prices and suppliers. It is generally believed that customers estimate which offer will deliver the most value customers are like value maximizes, within the bounds of search costs and limited knowledge, mobility income, they form an expectation of value and act on it, whether or not the offer lives up to the value expectations affects customer’s satisfaction and their repurchase probability.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.