1. P a g e | 1 Customer Satisfaction and Retention Strategies Dr. Ajay K. Sirsi asirsi@schulich.yorku.ca

2. P a g e | 2 Agenda How can service help you build a competitive advantage The importance of putting it all together Customer satisfaction measurement Customer loyalty Using service quality to attract, satisfy and retain customers

3. P a g e | 3 Do You Have A Process? Customer and stakeholder relationships are the only source of truly sustainable competitive advantage. Yet most companies do not have a process to manage and grow this asset. Source: Anders Gronstedt

4. P a g e | 4 Why Do Customers Defect? A worldwide survey conducted across a range of industries, highlighted these features as the reasons why customers leave one business in favour of another: Source: Capital Region Business Journal 68% Feel they were poorly treated/indifferent 14% Dissatisfied with a product or price 9% Lured away by a competitor 5% Buys from a friend 3% Move away 1% Other

5. P a g e | 5 Customer needs and expectations Customer perceptions Dissatisfaction Customer Defection Using Service Quality for Competitive Advantage

6. P a g e | 6 Wrong Implication “Therefore, we should focus on satisfying the customer”

7. P a g e | 7 Service Implications Satisfying customers is not enough –Scoring 4 out of 5 on a satisfaction scale is a good start –To retain customers we must constantly create value for them Customer satisfaction surveys do not reveal customer needs –Use instead for process improvements

8. P a g e | 8 External Survey on Service Quality (based on ServQual model) n=1,009

9. P a g e | 9 Gap Scores by Service Quality Dimension (Perceptions – Expectations)* Importance 1.Handling Customer's Problems 2.On-Time 3.Available to respond 4.Performing services right first time 5.No splits 6.Willingness to help/prompt service 7.Accurate Invoicing 8.Package condition 9.Shipment security 10.Instilling Confidence 11.Communicate when services will occur 12.Knowledge to answer questions 13.Understanding their needs 14.Convenient hours 15.Customer's interests in mind 16.Picked up on time 17.Appealing materials 18.Individual attention 19.Consistently courteous 20.Physical facilities appealing 21.Employees neat in appearance Largest Gap Smallest Gap

10. P a g e | 10 The Apostle Model Loyalist/Apostle Loyal and satisfied and recommend the service to others. Hostage Highly dissatisfied but have few or no alternatives. Mercenary May switch service to obtain a lower price, but are highly satisfied. Defector/Terrorist Have alternatives and use them, also try to convert other customers by expressing their dissatisfaction.

11. P a g e | 11 Gaps in Service and their effect on Loyalty

12. P a g e | 12 Metric Alignment “If you can’t measure it, you can’t manage it” Handling Customer’s problems Performing Services right the first time Responsiveness Communicate when services will occur Willingness to help/provide prompt service Available to respond Assurance Being consistently courteous Having the knowledge to answer questions Empathy Giving individual attention Having your best interest in mind Employees understanding your needs Tangible Brand Image Missed Pickups * On Time Delivery &Splits * Accurate Invoicing * Package Condition * Reliability Customers don’t care about our internal metrics They care about a Quality Customer Experience

13. P a g e | 13 FedEx - Feedback and Communication

14. P a g e | 14 Customer needs and expectations Customer perceptions My understanding of customer needs Design and delivery of value added solutions Relationship Marketing What do I need to do to better understand customer needs Which customers to target and what value added solutions to offer How can I better communicate with customers Dissatisfaction Using Service Quality For Competitive Advantage