Business is made up of the largest group of volunteers in the world......customers!

Syllabus Customer Satisfaction: Meaning, Definition, Significance of Customer Satisfaction, Components of Customer Satisfaction, Customer Satisfaction Models, Rationale of Customer Satisfaction, Measuring Customer Satisfaction, Customer satisfaction and marketing program evaluation, Customer Satisfaction Practices, Cases of Customer Satisfaction

What Do Customers Want? Quality Price Lead-time Service Flexibility Variability

What Do Customers Want? HighQuality LowPrice LowLead-time HighService HighFlexibility LowVariability

Customer Satisfaction Satisfaction is defined as... “a person’s feelings of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectations.” –i.e., Performance - Expectation Satisfaction results when expectations are equaled or surpassed.

Westbrook and Oliver (1991) defined Satisfaction as “a post choice evaluative judgment concerning a specific selection”.

In customer relationship management, customer satisfaction (CSAT) is a measure of the degree to which a product or service meets the customer's expectations.

Examples of Satisfaction Guarantees

Quality ValuesSub Characteristics Quality  Best practices and high quality reputation of suppliers  Worker’s Familiarity with organizational system  Error free processing Value Efficiency Timeliness  On time delivery  Using efficient, coordinated and fast paced delivery systems that take limited time according to customers.  The customer wants product or service delivery to take no less than all the time required. It is based on the nature or function of the process, not some arbitrary number dictated by management. Access Self management  Professional appearance  Consistently positive interactions with no negativity or personal agendas  Courtesy, friendliness, attentiveness and enthusiasm. Environment  Carry customer comfort in mind, make them feel welcome, be clean, safe, and well organized.  Quality performance at the front line and throughout all levels of delivery  Supplier’s internal support for employees and systems. The customer expects current methodologies  The worker at every level of product and service delivery must have the resources required to perform at optimum level. Teamwork Commitment  Form a relationship with a key person, which can be trusted and relied upon.  Supplier that provides all information and constant solicitation of customer need.  Customer wants to know up front about terms, conditions and anticipated or actual disappointments.  The supplier to take immediate responsibility and corrective action when the outcome is not achieved. Innovation 9

ENHANCING CUSTOMER SATISFACTION

Customer satisfaction measurement helps to promote an increased focus on customer outcomes and stimulate improvements in the work practices and processes used within the company. In the Customer Satisfaction measurement setting these scales could be grouped into three broad categories. They were: 1.Performance Scales, such as poor, fair, good and excellent 2.Disconfirmation Scales, such as worse than expected to better than expected 3.Satisfaction Scales, such as very dissatisfied to very satisfied MEASURING CUSTOMER SATISFACTION

CUSTOMER SATISFACTION INDEX CSI reflects overall satisfaction which is a weighted average of satisfaction on various parameters. Customer Satisfaction Index = w 1 *s 1 +w 2 *s 2 +w 3* s 3 +w 4 *s w n *s n Where w 1, w 2, w 3, w n are weights assigned to different attributes. S 1, s 2, s 3, , s n are average satisfaction scores on different attributes. 12

THE COMMON MEASUREMENT TOOLS (CMT): CMT is the result of an extensive study by researchers at the Canadian Centre for Management Development and others, which examined a number of approaches to standardising measurement of customer satisfaction with public services. It incorporates five main questioning approaches, measuring:  expectations of a number of service factors;  perceptions of the service experience on these factors;  level of importance attached to each of a number of service elements;  level of satisfaction with these elements;  respondents' own priorities for improvement. 13

Kano Model: (Kano et al 1984) Kano developed Questionnaire that had following characteristics:  For each product feature a pair of questions is formulated to which the customer can answer in one of five different ways.  The first question concerns the reaction of the customer if the product shows that feature (functional question);  The second question concerns the reaction of the customer if the product does NOT show this feature (dysfunctional question).  By combining the answers all attributes can be classified into the six factors. 14

Attractive Quality These attributes provide satisfaction when achieved fully, but do not cause dissatisfaction when not fulfilled. These are attributes that are not normally expected, For example, a thermometer on a package of milk showing the temperature of the milk. Since these types of attributes of quality unexpectedly delight customers, they are often unspoken. One-dimensional Quality These attributes result in satisfaction when fulfilled and dissatisfaction when not fulfilled. These are attributes that are spoken of and ones which companies compete for. An example of this would be a milk package that is said to have ten percent more milk for the same price will result in customer satisfaction, but if it only contains six percent then the customer will feel misled and it will lead to dissatisfaction. Kano Model attempts to classify the service quality parameters into following types of product/ service requirements that is of different significance to the research:

Must-be Quality: These attributes are taken for granted when fulfilled but result in dissatisfaction when not fulfilled. An example of this would be package of milk that leaks. Customers are dissatisfied when the package leaks, but when it does not leak the result is not increased customer satisfaction. Since customers expect these attributes and view them as basic, it is unlikely that they are going to tell the company about them when asked about quality attributes. Indifferent Quality : These attributes refer to aspects that are neither good nor bad, and they do not result in either customer satisfaction or customer dissatisfaction. Reverse Quality : These attributes refer to a high degree of achievement resulting in dissatisfaction and to the fact that not all customers are alike. For example, some customers prefer high-tech products, while others prefer the basic model of a product and will be dissatisfied if a product has too many extra features.

CUSTOMER SATISFACTION MODELS 17 The Expectations Disconfirmation Model: In this model a consumer compares pre-consumption expectations with post- consumption experiences of a product/service thus forming an attitude of satisfaction or dissatisfaction toward the product/service. Norms Models: The consumer compares perceived performance with some standard for performance which is not a predictive expectation. The Perceived Performance Model: In this model expectations have insignificant role in shaping satisfaction. Multiple Process Models: This model exemplifies the satisfaction formation process as multidimensional suggesting that consumers use more than one standard of comparison in forming a confirmation/disconfirmation judgment about an experience with a product/service.

CUSTOMER SATISFACTION MODELS... Contd. Attribution Models: this model held that consumers use three factors to determine attribution’s effect in satisfaction. These are locus of causality, stability, and controllability. Affective Models: This model moves beyond rational processes. Here emotion, liking, and mood have influence over feeling of satisfaction or dissatisfaction emerging out of consumption experience. Equity Models: This model emphasizes the consumer’s stance about fair treatment in the consumption process. Fair treatment can use the concept of the equity ratio (the amount of return for effort made) or the concept of social comparison (the perceived, relative level of product/service performance that other consumers experience).

Rationale of Customer Satisfaction Application of concept of Customer Satisfaction provides numerous benefits to the organizations viz Customer Retention, Customer Loyalty, Repurchase Intentions, and Business Performance. 1.Customer Satisfaction Building Customer Loyalty: 2.Customer Satisfaction Helping in Customer Retention 3.Customer Satisfaction Strengthening Customer’s Repurchase Intentions: 4.Customer Satisfaction Leading to Superior Business Performance