CUSTOMER SATISFACTION

Customer satisfaction research

focusses on two key issues
 Understanding the expectations and
requirements of the customers
 Determining how well a company and
its major competitors are succeeding in
satisfying these expectations and
requirements
Some research findings
 One hundred satisfied customers
generate 25 new customers
 For every complaint received, there are
20 other customers who feel the same
way but do not bother to complain.
 The cost of acquiring a new customer is
5 times as great as the cost of keeping
a satisfied customer.
The Malcolm Baldrige National
Quality Award
 30% Customer satisfaction
 15% Human Resource Utilization
 15% Quality assurance
 15% Quality results
 10% Leadership
 9% Strategic quality planning
 6% Information and analysis
Objectives of customer
satisfaction research
 Determine critical performance
attributes that result in customer
satisfaction
 Assess the performance of the company
and its major competitors
 Establish priorities and take corrective
action
 Monitor progress
Planning the determination of
Performance attributes
 Conduct interviews with employees
 Analyse indirect measures of customer
satisfaction
 Conduct qualitative research with customers
 Conduct quantitative research with customers
to solidify the requirements and expectations
 Analyse the results
 Present the results to the organisation
 Finalyse the critical Performance attributes
 Obtain commitment from employees
Universal Performance
attributes
 Attributes related to the product: Value
price relationship, product quality, product
benefits, product features, product design,
product reliability &consistency, Range of
products and consistency
 Attributes related to service: Gurantee or
warranty, delivery, Complaint handling,
resolution of problems
 Attributes related to purchase: Courtesy,
communication , ease of acquisition
Designing questionnaire for a
customer satisfaction survey
 Questions on overall customer satisfaction
 Questions relating to demographics and
psychographics.
 Questions on individual performance
attributes.
 Likelihood of repurchasing the product or
service.
 The likelihood of recommending the product
or service to friends and relatives.
Measurement scales
 Yes- No Scale: If the question
addresses an event that either occurred
or did not occur
 Three Point Scale: If questions relate
to specific performance requirements
 Five point scale: When responses
involve attitudes and opinions other
than facts.
Comparison standards other
than customer expectations:
 Comparing performance to desires
 Satisfaction based on product
performance other than expectations
 Comparing performance to experience
based norms
 Comparing performance to an ideal
 Satisfaction based on an evaluaton of
equity
Summated rating scales:
 Ratings on several performance
attributes can be added to form an
index called a summated Rating Scale.
Analysing Results
 Descriptive Percentages:
Descriptive percentages can be used in the following
three types of trend analysis.
 Plots of percentages over time to indicate where
improvements have been accomplished and where
additional emphasis is necessary.
 Statistical procedures to determine if significant
changes have occurred from the previous period
 Statistical quality control limits to highlight areas
where significant trends are occuring.
Penalty –Reward Analysis
 A basic factor: Creates dissatisfaction when
not achieved but does not increase
satisfaction when achieved or exceeded.
 A performance factor: results in reward
when the requirement is exceeded and in a
penalty when the requirement is not satisfied.
 An excitement factor incurs no penalty if
not achieved but adds value if the
requirement is exceeded
Gap Analysis
Expectations vs Performance
 Identify :

 Low priority attributes

 Attributes that need attention

 Overkill areas

 Company strengths
Statistical tools that can be
used are
 Arithmetic Averages: Arithmetic averages on all
performance attributes can be computed and the
averages can be compared with competitor’s scores
to more clearly define the company strengths and
weaknesses
 Correlation Analysis: The correlation coefficient is
a number between + and_ 1 that indicate4s the
degree of linear association between two variables.
Correlation coefficients between the overall
satisfaction rating and individual performance
attributes can be found out
Statistical tools that can be
used are
 Multiple Regression: Multiple Regression is
a statistical technique used to develop an
equation in which customer’s ratings of the
performance attributes are used to predict
the overall satisfaction rating.
 Helps in understanding the importance and
predictive accuracy of the performance
attributes.
Statistical tools that can be
used are
 Discriminant analysis: Discriminant
analysis can determine if the set of
performance attributes can effectivey
distinguish between satisfied and
dissatisfied customers.
Statistical tools that can be
used are
 Factor Analysis:
 Factor Analysis is used to investigate
the nature and number of underlying
dimensions in the survey data

 The performance attributes can be

combined to form a smaller set of
unifying dimensions
Statistical tools that can be
used are
 Correspondence Analysis:
 Correspondence analysis is a mathematical tool used to develop
perceptual maps.
 Customer satisfaction research is an ideal applicaton for
perceptual mapping, since relatonships among variables such as
performance attributes, demographics and competitors can be
investigated
 These relationships are visually potrayed by the relative
positions of points on a two –or –three dimensional perceptual
map. Points that cluster together reveal performance attributes,
demographic characteristics , and companies that are closely
related.
Multiple sources of Customer
satisfaction information:
 Cross comparision with other key data and
information such as complaints, losses and
gains of customers.
 Correlation of satisfaction results with other
satisfacton indicators such as complaints and
gains and losses of customers
 Trends in major adverse indicators such as
complaints, claims ,refunds, repeat services,
replacement, repairs, warranty costs etc.
Exceeding customer
expectations:
 Determine the critical performance attributes that
influence how customers choose products, services
and companies
 Determine the performance standards and
expectations associated with these attributes
 Quantify the performance of the company and its
major competitors in satisfying these expectations
 Implement Priority 1: Excel at satisfying the
performance attributes and expectatons that
influence how customers choose products, services
and companies.
Exceeding customer
expectations
 Determine the performance attributes that
create customer satisfaction after the choice
of products, services and companies has been
made.
 Quantify the performance of the company
and its major competitors in satisfying this set
of performance attributes.
 Implement priority 2 : Excel at satisfying
the performance attributes and expectatons
that satisfy the customers after they have
selected a particular product or service
Exceeding customer
expectations
 Classify the performance attributes into basic
factors, performance factors, and excitement
factors
 Quantify the performance of the company
and its major competitors in satisfying this set
of excitement factors
 Implement priority 3: Emphasize satisfying
and exceeding both the performance and the
excitement factors
Managing Customer
Expectations:
 A company can gracefully give the
customer news that service will not be
as expected:
Managing Customer
Expectations
 Offer Choices:One way to reset
expectations is to give customer options
for any aspects of service that are
meaningful, such as time and cost.
 Create tiered value service offerings
 Companies can establish the criteria by
which the customers assess service.
 Negotiate unrealistic Expectations