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Cost of bad image?

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  • #28952

    E. Mendoza
    Participant

    Hello
    Do you know a way to calculate or predict the loss in market share due to a bad image product ?
    We believe that “worth of mouth” is one major source of projects for DFSS but we would like to calculate (as accurate as possible) a metric from it.
    Thanks

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    #72951

    Crownie
    Participant

    More than your business can afford.

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    #72955

    Bobby
    Participant

    Your marketing department (if you have one) may be able to provide info on the relationship between customer satisfaction and revenue.  This might be very suspect as you may be the only provider of a product and your customers have no choice but to use your product if they want the service/product you offer.  In a very competitive market, there may be some correlation between the two.  Most likely your marketing department assumes there is anyways.  But, as Crownie stated, the bad image may be more than your bisuness can afford.  Look at Enron.  I heard they are even attempting to change their name! 

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    #72956

    Rick Otero
    Member

    Marketing has always seemed a tough area for folks in Six Sigma… to get at your question its best to think of “image” as Corporate Brand.  There are many areas of brand building.  In a DMAIC approach, you should baseline some target audience to determine the degree of positive vs negative impression your brand currently conveys.  The market researchers have lots of tools – based on psychographics – that can be applied to this along with stat’s to back it up.  Now here’s the rub – How bad is bad.  Said differently, is the thing that is casuing the image to go bad a slow erosion (i.e. due to lack of service deterioration)…or a discrete event – Exxon Valdez, Enron, etc. 
    You might try the Marketing Science Institute web site form more info….
    http://www.msi.org/
     
    Cheers!
     
    Rick Otero
    Director, Top Line Growth, DuPont Flooring and Nylon Intermediates.. and certified MBB
     

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    #72958

    Aquinas
    Member

    .

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    #72963

    John Adamo
    Participant

    There is a book called: “Customer Centered Six Sigma” by Naumann (available on amazon) which ties customer survey information and results to customer retention (which translates to income).  I thought (my opinion) that the book had some good ideas, but my company did not have the survey data to support the analysis.   If you want a system on how to correlate surveys to profits, this book should give you some insight.
     

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    #72981

    RR Kunes
    Member

    This is like asking to predict the weather. A little science and a lot of luck.
    A method that usually yields rsults is to benchmark the results of a company that has undergone such a catastrophe.  Obtain information from others in your market share or similar markets. Look for companies that have been hit by “BAD” press. The extent of validity of this process is that  their “BAD” might be more or less than your “BAD”. However, that would be taken into consideration.
    A few years ago someone laced stricknine into Tylenol. The results did not kill Tylenol however the cost was tremendous. Another example was Ford and the Pinto. While the car was an excellent performer, the bad press related to severe rearend collisions cost Ford a huge amount of money.
    Good luck in your search.

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