customer relationship mgmt. customer satisfaction

Customer SatisfactionMeaning

Meaning• Customer satisfaction, a term frequently

used in marketing, is a measure of how products and services supplied by a company meet or surpass customer expectation.

• It’s seen as a key performance indicator within business as a BALACED SCORECARD.

• It warns about Sales and Profitability.• When a brand have loyal customers, it

gains positive word-of-mouth marketing.

• Customer satisfaction differs depending on the situation and the product or service.

Definition• Customer Satisfaction: Improving quality and

access to services and support in vulnerable neighborhoods.

• Some researchers define a satisfied customer within the private sector as “ one who receives significant added value” to his/her bottom line.

• Customer satisfaction is defined as “the number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services exceeds specified satisfaction goals”.

• “When a product or service meets or exceeds a customer’s exceptions, the customer is usually satisfied”.

• In short customer satisfaction is "The provision of goods or services which fulfill the customer expectation in terms of quality and service, in relation to price paid”.

• “Conceptualized as a feeling developed from an evaluation of the experience”.

Purpose of CSFix it,

Improve it, make changes

Sell the improved product

Assess progress

(is it selling?)

Ask the customers if they like the

new product

Customer Satisfaction Process-Five Steps• Step 1 – Understanding Customer Expectations• Step 2 – Promises to Customers• Step 3 – Execution• Step 4 – Ongoing Dialog with a Customer• Step 5 – Customer Satisfaction Surveys

Step 1- Understanding Customer Expectations• We must know what our customers expect

from us. We work with our customers to precisely learn their expectations• Customer expectation differ by region by country.

Sample Question• How customer’s “wants and needs”, customer standards and expectations, are incorporated into our promises to customers to not only make a sale, but achieve high Customer Satisfaction(repetitive business)

Step 2 – Promises to Customers• Set promises that can be kept• Aim to exceed expectations rather than to meet them • Delight Customers by surprising them (Surprise is something not promised, yet delivered).

Step 3 - Execution• Products and services are provided to

customers• Customers had certain expectations before

products/services were delivered• Occasionally there are problems with

products/services provided• Customer problems are eventually solved Sample Question• How ongoing work towards better Customer Satisfaction is communicated to organization (development, sales, etc.)?

Step 4 – Ongoing Dialog with a Customer• Executive meetings• User Group meetings• Other meetings Sample Question• How feedback received from a customer (“current” Customer Satisfaction) is communicated?

Step 5 – Customer Satisfaction Surveys• CS Surveys• Event Driven Surveys• Internal Indicators of Customer Satisfaction • Tickets resolved within objectives • Ticket overdue • Resolve time • Response timeSample Question•How survey results are communicated to organization?•Corrective actions?•Pro-active actions?

Significance of CS• A business can be successful only if the end

customers are satisfied. Customers are the real kings of business so it is very important to keep them happy.

• The level of satisfaction customer with a company has profound effects.

• A totally satisfied customer contributes 2.6 times as much revenue to a company.

• Customer Satisfaction doesn’t guarantee the repurchases from a company but it does play a vital role in achieving customers loyalty.

• CS research needs to make informed decisions in order to retain and increase your customer base and improve customer relationships.

• IT costs at least 7 times more to source a new customer than it does to retain existing one

• A 'satisfied' customer tells 5-7 people in a year whilst a 'dissatisfied' customer will tell 14-15 people

• Companies can boost profits anywhere from 25% to 125% by retaining a mere 5% more of their exciting customers

• Totally satisfied customers were 6 times more likely to use that services and commend it than ' satisfied' customers

• Customers who have a bad experience with you and do not complain are only 37% likely to still do business with you

• Customers who have an opportunity to complain and the complaint is achieved are 95% likely to still do business with you

Components of CSYou provide value when you deliver the four components that reliably create customer satisfaction.• A perfect product or service• Delivered in a caring, friendly manner• On time (as defined by customer)• With the backing of an effective problem-resolution process

Factors of customer satisfaction• Service of quality• Reliability of service• Knowledge of the staff• Being kept informed of progress• The way service kept its promises• The way the service handled any problem

Friendliness of staff·• How sympathetic staff were to your needs• Speed of enquiries• Number of time had to contact the service.

CS model

Figure 1: Traditional Macro-Model of customer satisfaction (adapted from Woodruff & Gardial, 1996) * includes intent to purchase, word-of-mouth, loyalty, and complaints.

Perceived performance

Comparison standard(s)

Perceived disconfirm.

Satisfaction feelings Outcomes *

Rationale of Customer Satisfaction• It improves business repo.• It helps to increase total revenue.• It helps to find out what customers are

thinking and feeling about product and services.

Measuring Customer Satisfaction• Customer satisfaction measurement has a critical role in informing service

improvement. It allows an agency to understand what its customers value, how values vary between different types of customers, and where the agency can take action to improve service delivery.

• It requires a set of activities such as preparation of questionnaire, conducting surveys and analyzing the result.

• Questions and scales: 1 2 3 4 5Highly Moderately Neutral Moderately Highlydissatisfied dissatisfied satisfied

satisfied

1 2 3 4 5Strongly Moderately Neutral Moderately Stronglydisagree disagree agree agree

• Open ended questions: Good measurement involves asking open-ended questions about

1) what the customer feels the way he/she does,2) the ways the programme can be changed to

improve his/her level of satisfaction,3) what he/she liked best about the programme,

and4) what he/she disliked most about it.

Choosing programs to measure • Although there are no hard and fast rules about

which programs and services should be assessed first, the following are some recommended criteria to consider (not in ranked order):

• Largest number of people served • Largest program, in terms of budget or staff • Clear opportunities are available to improve

(programs with known complaints/issues) • Highest strategic priority • High profile programs or programs with known

controversy

Principles for customer satisfaction measurement • The ultimate goal for all customer service should be “service

excellence.” • A good way to find out what your customers care about and what their

experiences are is to ask them. • Customer satisfaction results are important to understand service

delivery, will be used by management and employees to improve services, and will be reported to the public along with changes made based on the results.

• Differences in programs, services, and customer populations may require differences in data collection procedures, measures, and strategies for improvement.

• Customer satisfaction measurement should focus on the entire customer experience, not just the final result or decision.

• Customer satisfaction data collection efforts should be adapted to and modified for diverse customer populations.

• Customer satisfaction measurement should be proximal, or close in time, to the time of service or interaction. Assess customer satisfaction when a customer’s experience is fresh.

• Measurement should reflect the various ways (channels or methods) customers access the service.

CS and Marketing Program evaluation

CS Practices• Use a scientific questionnaire design• Define the goal• Keep surveys short & sweet• Measure what matters• Use the right scale• Don’t strive for a benchmark- find the

“rightmark”• Coordinate with IT• Don’t use surveys results to

individuals• Report often and make results

accessible• If you’ve invested, make it work

Cases of Customer Satisfaction