Customer Satisfaction
Customer Satisfaction
Consumers form judgements about the value of marketing offers and make their buying decisions based upon these judgements. Customer satisfaction with a purchase depends upon the product's performance relative to a buyer's expec tations, A customer might experience various degrees of satisfaction. If the product's performance falls short of expectations, the customer is dissatisfied. If performance matches expectations, the customer is satisfied. If performance
exceeds expectations, the customer is highly satisfied or delighted. But how do buyers form their expectations? Expectations are based on the customer's past buying experiences, the opinions of friends and associates, and marketer and competitor information and promises. Marketers must be careful to set the right level of expectations. If they set expectations too low, they may satisfy those who buy, but fail to attract enough buyers. In contrast, if they raise
expectations too high, buyers are likely to be disappointed. For example, Holiday
476 • Chapter 11 Building Customer Relationships: Customer Satisfaction, Quality, Value and Service
Tracking Customer
surveys. They send questionnaires
Satisfaction
or make telephone calls to a sample of recent customers to find out how they feel about various aspects
Complaint and Suggestion of the company's performance. Systems
A customercentred organization Belgacom is the new name makes it easy for customers to
for Belgium's revitalised make suggestions or complaints.
Regie des Telcgraphes et des Hospitals place suggestion boxes
Telephones, the stateowned in the corridors, supply comment
telecommunications monopoly. It cards to existing patients and
placed a questionnaire about its employ patient advocates to solicit
service in newspapers and got grievances. Some customercentred companies
65,000 replies. These highlighted the firm's may set up free customer hot lines to make it
weaknesses and reputation for "customer easy for customers to enquire, suggest or eom
unfriendliness'. Not surprising when a law plain.
exists that allows Belgacom employees to Successful companies try very hard All visi
slam the phone down on irate customers. tors to Richer Sounds shops get a card showing
Belgacom has changed its ways so as not to the shop's team and saying: 'We're listening,' It's a
be crushed in the European telecom market. Freepost letter addressed to Julian Richer, the owner of the chain. Inside it reads:
Magazines and consumers' associations often conduct independent surveys. Honda, Dell and
Thank you for your support and making us dan Technologies strive to come out on top in the UK's most successful hifi retailer. In
these measures. Companies can easily be deluded order to maintain No. 1 position, we need to
by their own results. For instance, a conference know where we've gone wrong. Suggestions
centre may be happy that 85 per cent of its cus or comments regarding customer service,
tomers say its service is good, but what if 95 per however small, are gratefully received. Every
cent of the customers also rate a competitor as one has Mr Richcr's personal attention ...
excellent?
Please, please, please let us know, as we The ad agency Bozell Worldwide's Quality really do care!
Poll gives a league table and shows how biased local perceptions can be. Gallup conducted a
Such systems help companies to act quickly to study that asked 20,000 people in 20 countries to resolve problems and provide ideas for improved
rate the quality of manufactured goods from 12 products and service.
countries (see Table 1). All countries rated them selves higher than other people did. The French
Customer Satisfaction Surveys put French goods on top, while the Japanese gave Simply running complaint and suggestion sys
themselves twice the rating (76 per cent) that the tems may not give the company a full picture of
full sample did (38.5). All other countries were customer satisfaction. One out of every four pur
optimistic too: Germans gave themselves 49 per chases results in consumer dissatisfaction, but
cent against the full sample's 36 per cent and the less than 5 per cent of dissatisfied customers
United Kingdom 39 per cent against 22 per cent. complain. Rather than complain, most customers simply switch suppliers. As a result, the company
Ghost Shopping
needlessly loses customers. Another useful way of assessing customer satis Responsive companies take direct measures
faction is to hire people to pose as buyers. These of customer satisfaction by conducting regular
'ghost shoppers' can even present specific prol>
Defining Customer Value and Satisfaction • 477
TABLE 1 QUALITY RATING OK MANUFACTURED HOODS RESPONDENTS RATING GOODS VERY GOOD OR EXCELLENT
MEMBERS (RANKED IN ORDER OF THEIR SCORE) About 30 to 40 per cent
Japan, Germany and USA About 15 to 20 per cent
UK, France, Canada and Italy About 10 per cent
Spain, China and Taiwan About 5 per cent
Mexico and Russia
lems in order to test whether the company's per performance say, delivery they can vary sonnel handic difficult situations well. For ex
greatly in how they define good delivery. It might ample, ghost shoppers can complain about a
mean early delivery, ontime delivery, order com restaurant's food to see how the restaurant han
pleteness or something else. Customers can dles this complaint. Research International's
report being 'highly satisfied' for different rea Mystery Shopper surveys can measure many
sons. One might be easily satisfied most of the dimensions of customer performance. By tele
time, whereas the other might be hard to please phoning it can measure a firm's telephone tech
but was pleased on this occasion. Further, man nique: how many rings it takes to answer, the sort
agers and salespeople can manipulate their rat of voice and tone and, if transferred, how many
ings on customer satisfaction. They can be leaps it took before being correctly connected.
especially nice to customers just before the Not only should companies hire ghost shoppers,
survey or try to exclude unhappy customers from but managers themselves should leave their
the survey. If customers know that the company offices from time to time and experience first
will go out of its way to please them, even if they hand the treatment they receive as 'customers'.
are satisfied some customers may express high As an alternative, managers can phone their com
dissatisfaction in order to receive yet more con panies with different questions and complaints to
cessions.
see how the call is handled. International measurement of satisfaction has its own problem. It is part of the British char acter not to complain, so global competitors like
Lo.st Customer Analysis British Airways have to try very hard to obtain Companies should contact customers who have
information that other nationals give freely. In stopped buying or those who have switched to a
many eastern countries, customers would worry competitor, to learn why this happened. When
about people losing face if they complained, IBM loses a customer, it mounts a thorough effort
whereas in other countries complaining is all part to learn how it failed: was IBM's price too high, its
of getting a good service.
service poor or its products substandard? Not only should the company conduct such exit inter views, it should also monitor the customer toss rate. A rising loss rate indicates that the company
is failing to satisfy its customers.
Some Cautions in Measuring Customer Satisfaction Customer satisfaction ratings are sometimes diffi cult to interpret. When customers rate their sat isfaction with some element of the company's
478 • Chapter 11 Building Customer Relationships: Customer Satisfaction, Quality, Value and Service
Inn ran a campaign a few years ago called 'No Surprises', which promised consist ently troublefree accommodation and service. However, Holiday Inn guests still encountered a host of problems and the expectations created by the campaign only made customers more dissatisfied. Holiday Inn had to withdraw the campaign.
Still, some of today's most successful companies are raising expectations and delivering performance to match. These companies embrace total customer satisfaction. For example, Honda claims, 'One reason our customers are so satis fied is that we aren't' or, as dan Technology puts it, 'We value your business. We
want you to buy from us again.' These companies aim high because they know that customers who are only satisfied will still find it easy to switch suppliers when a better offer conies along. In one consumer packagedgoods category, 44
per cent of consumers reporting satisfaction later switched brands. In contrast, customers who are highly satisfied arc much less ready to switch. One study showed that 75 per cent of Toyota buyers were highly satisfied and about 75 per cent said they intended to buy a Toyota again. Thus customer delight creates an emotional affinity for a product or service, not just a rational preference, and this creates high customer loyalty.
Today's winning companies track their customers' expectations, perceived company performance and customer satisfaction. They track this for their competitors as well. Consider the following:
A company was pleased to find that 80 per cent of its customers said they were satisfied with its new product. However, the product seemed to sell poorly on store shelves next to the leading competitor's product.
Company researchers soon learned that the competitor's product attained
a 90 per cent customer satisfaction score. Company management was further dismayed when it learned that this competitor was aiming for a 95 per cent satisfaction score.
Marketing Highlight 11.1 describes the way in which companies can track customer satisfaction.
For customercentred companies, customer satisfaction is both a goal and an essential factor in company success. Companies that achieve high customer satis faction ratings make sure that their target market knows it. In the car industry,
the Honda Accord received the no. 1 rating in customer satisfaction by J.D. Powers for several years running and Honda advertising touting helped sell more
Accords. Similarly, dan Technology's success in the personal computer industry was partly because it achieves and advertises its no. 1 ranking. 5
These and other companies realize that highly satisfied customers produce several benefits for the company. They are less price sensitive and they remain customers for a longer period. They buy additional products over time as the company introduces related products or improvements. And they talk favourably to others about the company and its products.
Although the customercentred firm seeks to deliver high customer satisfac tion relative to competitors, it does not attempt to maximize customer satisfac tion. A company can always increase customer satisfaction by lowering its price or increasing its services, but this may result in lower profits. In addition to customers, the company has many stakeholders, including employees, dealers, suppliers and stockholders. Spending more to increase customer satisfaction might divert funds from increasing the satisfaction of these other 'partners'. Thus the purpose of marketing is to generate customer value profitably. Ultimately, the company must deliver a high level of customer satisfaction, while at the same time delivering at least acceptable levels of satisfaction to the firm's other stake
Defining Customer Value and Satfe/etetion • 419
holders. This requires a very delicate balance: the marketer must continue to generate more customer value and satisfaction, but not 'give away the house'. 6 Many of the world's most successful companies build their strategies on customer satisfaction, but as Marketing Highlight 11.2 shows, you do not have to be big to succeed. 7
Cold lurkey lias
3. A customer is not an
Cot Me on the Run
interruption of our work; he is the purpose of it.
'Oh dear! Am I in trouble now.' It
4. A customer does us a favour was a week before Christmas as
when he calls; we are not the recalcitrant academic trudged
doing him a favour by serving up and down Castle Street trying
him.
to buy a goose for Christmas
5. The customer is part of our dinner. Long before Charles
business, not an outsider. Dickens' time, when Scrooge sent
6. The customer is not a cold 'the prize Turkey ... the big one' to
statistic; he is a flesh and Bob Cratchit's house, goose was
blood human being with the traditional English Christmas
feelings and emotions like ours. fayre. Introduced to Europe from America in the
7. The customer is not someone to argue or sixteenth century, turkey had displaced goose in
match wits with.
all of Castle Street's butchers. Sick of having cold 8. The customer brings us his wants; it is our turkey salad, turkey sandwiches and that dread
job to fill those wants.
9. The customer is deserving of the most demic's family had decided to have goose 'for a
ful turkey curry for days after Christmas, the aca
courteous and attentive treatment we can change'. His job was to get one. but he had left it
give him.
too late.
10. The customer is the lifeblood of this, and Butcher after butcher came out with the
every other, business.
wornout lines, 'You should have ordered one weeks ago', 'We can't get them anywhere' or
'Merry Christmas, what can 1 do for you?' asked 'There's no call for them these days'. Even, 'A
the butcher.
goose? They're so greasy. How about a nice fat 'Have you a goose?' the academie asked timidly. turkey? It'll last you for days.' SCREAM!
'1 haven't got any in, but I'll get one for you. What Defeated, he slumped into his car to drive
size do you want?"
home. It was dark and on the way through a vil Later on, at The Pheasant Inn, the talk turned to lage he saw the lights of a small shop he had not
food. 'Have you come across that great butcher in noticed before. A small independent butcher, well
the next village?'
stocked, brightly lit and full of customers. 'Great buteher? Come off it. A butcher's a 'Funny,' he thought, 'there aren't many of those
butcher's a butcher!'
those days. Still, let's have one last try.' 'Not this one, he will do anything for you. Nice On joining the festive throng inside, he
guy, too.'
noticed a sign on the wall. It read; Lesson: You do not have to be big to be great.
Tiie ten commandments of good business
1. The customer is the most important person in my business.
2. The customer is not dependent on us; we are dependent on him.
480 • CfuijjKrll Building Customer Relationships: Customer Satisfaction, Quality. Value and Service