Implementing Lean Six Sigma Strategies Can Increase Customer Loyalty

Implementing Lean Six Sigma business strategies can help a business get a better bottom line.Every business needs to develop or adopt a strategy to get better.That usually means creating ways to do things more efficiently – get more things done at a lower cost and profits begin to soar, but there is a second surprising component to making more money.

However, what some companies found out in the seventies is that cutting costs is not necessarily the best way to increase profits because when costs are cut at the detriment to product reliability, customers not only quit buying the product, but potential customers also decide not to buy the product based on other people’s recommendations.

Back in the 1970s, the American car business was rolling in the dough.Nobody could make a car like the Americans, but two things converged to allow a Japanese auto maker a foothold into the American market.

The first was the gas crisis.American gas guzzlers lined up around the block and beyond, just to get fuel that was a bit too expensive for the average consumer.This drove American buyers to smaller, more fuel efficient cars that the big three didn’t offer in large supply.

The second was Toyota’s decision to cut the number of defective vehicles that left the factory.Back in the 1970s, the American auto makers could have made their vehicles more reliable and in need of fewer repairs, but the believed that implementing such a system would cost them more money than just repairing vehicles that went out of the factory at less than what was advertised.It was labeled “cost prohibitive” to make cars that were reliable for every vehicle owner.

Because Toyota vehicles required fewer repairs, used less gas and were more reliable as they aged, Toyota became known for the excellence of its vehicles.Fewer unhappy customers meant more lifetime drivers of the vehicle.Toyota had gained its foothold and held onto it well through the 1990s.
Shooting for a Six Sigma rating (3.4 defects per million) gives a company that same advantage that Toyota had in its vehicles.More people are happier with the product and that leads to good recommendations and a good reputation.

It is especially important to meet people’s needs in today’s electronic era.Studies have shown that people will take the recommendation of a blogger, whom they do not know, when making a large purchase of any kind of product.Facebook, Twitter and every other social media site can be a company’s best friend, or they can be a company’s worst nightmare.While the same rules apply about the number of times that a person will tell their friends about a good incident and the much higher number of times that he or she will talk about a bad incident, with connections being what they are now, that number can be multiplied by tenfold and may include someone else, who wasn’t involved in the transaction telling his or her friends, too.

The lean part of the process involves eliminating any work that does not add value for the consumer.Things that might be included in the process would be cutting down unnecessary paperwork.If someone is filing a report that never gets read, that report should probably be eliminated.It might also include eliminating jobs that do not add value to the customer.How many executive secretaries does a company need?

Implementing Lean Six Sigma protocols allows a company to adopt a ready-made plan, rather than reinvent the wheel.This plan addresses both sides of the equation allowing for costs to be cut or for the growth of customer loyalty.