Customer satisfaction
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It has been suggested that Customer satisfaction dimensions be merged into this article or section. (Discuss) Proposed since July 2009. |
Customer satisfaction, a business term, is a measure of how products and services supplied by a company meet or surpass customer expectation. It is seen as a key performance indicator within business and is part of the four of a Balanced Scorecard.
In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy.[1]
However, the importance of customer satisfaction diminishes when a firm has increased bargaining power. For example, cell phone plan providers, such as AT&T and Verizon, participate in an industry that is an oligopoly, where only a few suppliers of a certain product or service exist. As such, many cell phone plan contracts have a lot of fine print with provisions that they would never get away if there were, say, a hundred cell phone plan providers, because customer satisfaction would be way too low, and customers would easily have the option of leaving for a better contract offer.
There is a substantial body of empirical literature that establishes the benefits of customer satisfaction for firms.
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[edit] Measuring customer satisfaction
Organizations need to retain existing customers while targeting non-customers.[2] Measuring customer satisfaction provides an indication of how successful the organization is at providing products and/or services to the marketplace.
Customer satisfaction is an abstract concept and the actual manifestation of the state of satisfaction will vary from person to person and product/service to product/service. The state of satisfaction depends on a number of both psychological and physical variables which correlate with satisfaction behaviors such as return and recommend rate. The level of satisfaction can also vary depending on other factors the customer, such as other products against which the customer can compare the organization's products.
Work done by Parasuraman, Zeithaml and Berry (Leonard L)[3] between 1985 and 1988 delivered SERVQUAL which provides the basis for the measurement of customer satisfaction with a service by using the gap between the customer's expectation of performance and their perceived experience of performance. This provides the researcher with a satisfaction "gap" which is semi-quantitative in nature. Cronin and Taylor extended the disconfirmation theory by combining the "gap" described by Parasuraman, Zeithaml and Berry as two different measures (perception and expectation) into a single measurement of performance relative to expectation.
The usual measures of customer satisfaction involve a survey[4] with a set of statements using a Likert Technique or scale. The customer is asked to evaluate each statement in terms of their perception and expectation of performance of the service being measured. Arguably, consumers are less complex than some of these surveys tend to portend. They are basically in two simple states; satisfied or not satisfied. On or off, just like a switch. A business can measure its customer satisfaction index by relating the aggregates of satisfied customers versus dissatisfied customers.
[edit] Methodologies
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American Customer Satisfaction Index (ACSI) is a scientific standard of customer satisfaction. Academic research has shown that the national ACSI score is a strong predictor of Gross Domestic Product (GDP) growth, and an even stronger predictor of Personal Consumption Expenditure (PCE) growth. On the microeconomic level, research has shown that ACSI data predicts stock market performance, both for market indices and for individually traded companies. Increasing ACSI scores has been shown to predict loyalty, word-of-mouth recommendations, and purchase behavior. The ACSI measures customer satisfaction annually for more than 200 companies in 43 industries and 10 economic sectors. In addition to quarterly reports, the ACSI methodology can be applied to private sector companies and government agencies in order to improve loyalty and purchase intent. Two companies have been licensed to apply the methodology of the ACSI for both the private and public sector: CFI Group, Inc. applies the methodology of the ACSI offline, and Foresee Results applies the ACSI to websites and other online initiatives. ASCI scores have also been calculated by independent researchers, for example, for the mobile phones sector,[5] higher education,[6] and electronic mail.[7]
The Kano model is a theory of product development and customer satisfaction developed in the 1980s by Professor Noriaki Kano that classifies customer preferences into five categories: Attractive, One-Dimensional, Must-Be, Indifferent, Reverse. The Kano model offers some insight into the product attributes which are perceived to be important to customers. Kano also produced a methodology for mapping consumer responses to questionnaires onto his model.
SERVQUAL or RATER is a service-quality framework that has been incorporated into customer-satisfaction surveys (e.g., the revised Norwegian Customer Satisfaction Barometer[8]) to indicate the gap between customer expectations and experience.
J.D. Power and Associates provides another measure of customer satisfaction, known for its top-box approach and automotive industry rankings. J.D. Power and Associates' marketing research consists primarily of consumer surveys and is publicly known for the value of its product awards.
Other research and consulting firms have customer satisfaction solutions as well. These include A.T. Kearney's Customer Satisfaction Audit process,[9] which incorporates the Stages of Excellence framework and which helps define a company’s status against eight critically identified dimensions.
For Business to Business (B2B) surveys there is the InfoQuest box[1]. This has been used internationally since 1989 on more than 110,000 surveys (Nov '09) with an average response rate of 72.74%. The box is targeted at "the most important" customers and avoids the need for a blanket survey.
[edit] See also
[edit] References
- ^ Gitman, Lawrence J.; Carl D. McDaniel (2005). The Future of Business: The Essentials. Mason, Ohio: South-Western. ISBN 0324320280.
- ^ John, Joby (2003). Fundamentals of Customer-Focused Management: Competing Through Service. Westport, Conn.: Praeger. ISBN 9781567205640.
- ^ Berry, Leonard L.; A. Parasuraman (1991). Marketing Services: Competing Through Quality. New York: Free Press. ISBN 9780029030790.
- ^ Kessler, Sheila (2003). Customer satisfaction toolkit for ISO 9001:2000. Milwaukee, Wis.: ASQ Quality Press. ISBN 0873895592.
- ^ Turel, Ofir; Alexander Serenko (2006). "Satisfaction with mobile services in Canada: An empirical investigation". Telecommunications Policy 30 (5-6): 314–331. doi:10.1016/j.telpol.2005.10.003. http://foba.lakeheadu.ca/serenko/papers/Turel_Serenko_tp_published.pdf.
- ^ Serenko, Alexander (2010). "Student satisfaction with Canadian music programs: The application of the American Customer Satisfaction Model in higher education". Assessment and Evaluation in Higher Education 35 (4). http://foba.lakeheadu.ca/serenko/papers/Student_Satisfaction_ACSI_Published.pdf.
- ^ Dow, Kevin; Alexander Serenko, Ofir Turel, Jeff Wong (2006). "Antecedents and consequences of user satisfaction with e-mail systems". International Journal of e-Collaboration 2 (2): 46–64. http://foba.lakeheadu.ca/serenko/papers/JeC_Dow.pdf.
- ^ Johnson, Michael D.; Anders Gustafssonb, Tor Wallin Andreassenc, Line Lervikc and Jaesung Cha (2001). "The evolution and future of national customer satisfaction index models". Journal of Economic Psychology 22 (2): 217–245. doi:10.1016/S0167-4870(01)00030-7. ISSN 0167-4870.
- ^ Bluestein, Abram; Michael Moriarty; Ronald J Sanderson (2003). The Customer Satisfaction Audit. Axminster: Cambridge Strategy Publications. ISBN 9781902433981.
