How service marketers can identify value-enhancing service elements D. Randall Brandt 13th November 2008 Olli Kulkki

Analysis Context – Service marketing (service) – Consumer services (consumer business) Research methods of the article – Literature review – Presents a statistical method – Could be based on case studies

Main points of article Represents a method to determine value-enhancing elements of a service from customer satisfaction survey data – Determine elements that maximize satisfaction – Determine elements that minimize dissatisfaction How to execute a customer satisfaction survey and interpret the results Customer feedback can be used to control quality Long term success depends on how well customer expectations are managed

Relations to our course topic User viewpoint of quality Quality of End-user Experience Subjective quality measurement Measuring service acceptability

Satisfaction survey focus & content Why surveys? – General or overall evaluation of service quality – Evaluation of service attributes – Find potential problems and issues – Indicates how successful the company is (wikipedia) How? – Use five point scales with anchors – Ask one general question – Ask many questions about service attributes

Scales, anchors and groups Very satisfied Much better than expected Better Somewhat satisfied Somewhat bettern than expected Better Neither satisfied or dissatisfied About the same as expected Same Somewhat dissatisfied Somewhat worse than expected Worse Very dissatisfied Much worse than expected Worse

The method Identify customer groups – “I think that service is worse/same/better as expected” Compare overall satisfaction of groups Results – relatively unimportant attribute, – minimum requirement attribute, – value adding attribute, – hybrid attribute

Analyzing the positive statements Attribute WorseSameBetter Delivery to all locations 52%80%86% Prompt Next- day delivery 44%75%79% Convenient to use 49%54%71% Good at Solving Problems 39%65%82% Use percentage of Very Satisfied and Somewhat Satisfied people in each customer group

Results Attribute WorseSameBetter Relatively unimportant 50% Minimum requirement 44%75%79% Add value 49%54%71% Hybrid 39%65%82% Table presents positive response to a statement

customer What is being measured? customer Past experiences Customer satisfactio n survey Growth of service sector Opinions Change of opinion s Competition Consumerism customer Peer pressure Expectations Raised expectations

Who is measuring? marketer Can visualize complex projects Customer satisfactio n survey Easily engage strangers Positive Think outside the box Enjoy selling ideas to other people Rarely ask for permission or detail Charismatic Good at listening to stories Comfortable with ambiguity [Seth Godin | The Marketer’s attitude] Good in telling stories

Evaluation Practical method of understanding and seeing the benefits of a successful customer satisfaction survey Method still valid after 20 years Central tendency bias is normalized by using three groups instead of five Any user survey could analyzed Gives insight to listening of peoples opinions

Practical importance More practical than scientific inportance Customer Satisfaction is one of the four elements in Balance Scorecard that measures the alignment of activities and strategy Good way to find out what customers are satisfied about, if they are satisfied

Practical importance [Strategies for Supporting Next-Generation Networks | White Paper 2008 | Alcatel Lucent]

Critique If customer has no incentive, result of study might not tell the whole truth – Happy customers are more likely to use time Customer group sizes may differ – 100 worse, 100 same, 1000 better Method may experience bias What does dissatisfaction tell about the survey? (negative responses not compared) Method holds no quantitative measurement