iSixSigma

To Identify CTQs, Listen To The Voice of the Market

Successful quality initiatives rely on understanding what quality actually means. The meaning of quality resides in the minds of those who judge it and use it to make their purchase decisions – in other words, the market. Divorced from the market, value or quality has no real meaning. Uninformed definitions of value or quality become mere guesses – sometimes right and many times wrong. The voice of the market takes the guess work out of defining quality and provides a roadmap for directing enterprise initiatives for achieving best in market quality.

CTQ Identification Process

Identifying critical to quality characteristics (CTQs) begins first by identifying the product and/or markets the organization is targeting – the better the focus, the clearer the understanding of how that product or market defines quality. Poorly defined products will result in CTQs that are not only “fuzzy” but also less actionable, making it harder to put the information to work.

Once the targets are identified, the organization can convene focus groups of buyers within those targets with the purpose of identifying how buyers define quality and value. These focus groups should be composed not only of the organization’s customers, but also customers of its competitors. The output of these focus groups is a set of performance criteria that comprise an overall quality construct.

Once the criteria have been identified, the organization should put them into a questionnaire and field it to current and potential buyers that comprise the targeted product/market. These buyers again should include not only the organization’s customers, but also the customers of competitors. Respondents should be asked to rate their supplier’s performance on a 10- point scale, where 1 = poor performance and 10 = excellent performance.

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These results should then be subjected to a factor analysis to distill the larger set of individual attributes into a smaller set of factors or latent dimensions. These dimensions are named based on the nature of their content and become the CTQ factors. Their prioritization comes from inserting the potential CTQs into a regression model and generating beta weights for each CTQ.

Tapping the Value Model

Here is an example of a value model that is generated from business buyers of wireless telecom services in a regional market using the process outlined above. In Six Sigma marketing, the value model is generated in the Measure stage and becomes the information platform that drives the rest of the process. It ensures that the voice of the market (VOM) is included in all quality initiatives.

Value Model: Wireless Telecom Services/B2B Buyers Southeast Region

Value Model

Value Model

The model is comprised of two components: a predictive component and a managerial component. The predictive component identifies the contribution that quality, image and price make to the market’s understanding of value. In this case, quality (.736) plays a significantly greater role in defining value than do image (.100) or price (.164). The numbers between the value drivers (quality, price and image) are correlations indicating the degree of association that exists.

On the managerial side of the model are the CTQs and their relative impact on quality: customer focus (.394), technical competence (.361), product features (.148) and billing (.096).

Consider the most important CTQ, customer focus. The first question that arises is, “What is customer focus?” Suppose the team leader assigned you the task of outlining a plan for improving or enhancing “customer focus.” Where would you start? The Six Sigma marketing approach provides a detailed blueprint for identifying the people, product and process options for doing so.

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Recall that customer focus is a factor, or latent dimension. Accordingly, it is comprised of a set of attributes that define it. These attributes are:

Customer Focus

  • Treating your organization like a valued business partner
  • Being responsive to your organization’s questions and service needs
  • Being a company that consistently delivers above and beyond expectations
  • Company reps having a positive attitude
  • Company reps promptly making changes to your organization’s service when you request them
  • Company reps resolving problems to your satisfaction
  • After the sale, company reps resolving problems the first time you call
  • Company reps accurately representing products and services
  • Company reps providing clear and concise explanations about the bill
  • Company reps providing timely training on how to use the products and services
  • After the sale, the ease with which you can reach the right person to solve your organization’s communications needs
  • Being a company that understands the needs of your business
  • Proactive communication on promotions or new product and service offerings
  • Provides easy access to products, service and/or accessories at a convenient retail location

These attributes are lumped into one factor. Based on the nature of the attributes, the team decided to call this CTQ “customer focus.” Another team may have called it something else. In this organization, customer focus, because of its overall importance in the value model (.394), became the primary quality initiative.

Instead of having to guess what customer focus means, the individual attributes provide a clear and direct approach to people, product and process initiatives for enhancing customer focus.

For example, think of people, products and processes as the x’s that drive the Y – performance of the attributes that comprise customer focus. Changing the x’s positively changes the Y in a positive direction.

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The company began by examining its training programs to ensure:

  • Reps are responsive to a customer’s questions and service needs.
  • Reps can promptly make changes to service requests.
  • Reps can resolve problems the first time a customer calls.
  • Reps are accurately representing products and services.
  • Reps are providing timely training on how to use products and services.
  • Reps have the ability to explain bills in a clear and concise manner.

In addition, the company had to examine the processes that support these customer needs. Do the processes exist to allow reps to be responsive to a customer’s question and service needs, make changes to service requests, or resolve problems the first time a customer calls? Are the current processes actually inhibiting their reps from providing the requisite level of service? Do they need changing and improving? Mapping these processes led to options for enhancing the organization’s customer focus.

From a product standpoint, does the company provide business solutions that satisfy the customer’s communication needs? Does the company have a mechanism for assessing customers’ communication needs?

This process is repeated for each of the CTQs identified in the value model. Identifying CTQs in a market-based manner that eliminates guess work and provides a clear path toward improvement and enhancement is a fundamental part of Six Sigma marketing – a fact-based, disciplined approach for growing market share by providing targeted products and/or markets with superior value. Six Sigma marketing provides the customer with a seat at the quality table. After all, they are the ultimate judge of an organization’s quality efforts.

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