Customer dissatisfaction/ Jostin Sebastian

CONSUMER DISSATISFACTION

Jostin Sebastian

Adi Shankara Institute for Management and Technology

Final year management studies

9895818267/ jostin12@yahoo.com

• The basis for consumer satisfaction or dissatisfaction lies in mankind's ability to

learn from past experiences.

• A basic tenet of marketing is that consumer satisfaction with a product is likely

to lead to repeat purchases, acceptance of other products in the product line, and

favorable word-of-mouth

• When consumers have a negative evaluation of an outcome, they feel dissatisfied.

• Dissatisfaction occurs when you do not enjoy a movie, do not like the taste of food, were unhappy with the salesman etc.

• How well the product or service is offered.

ATTRIBUTION THEORY

• Theory explains how individuals find explanations or causes for effects or

behavior.

• How a person would be motivated or demotivated towards an event.

• Stability: is the cause of the event temporary or permanent.

• Focus: is the problem consumer or marketer related.

• Controllability: is the event under the customer’s or marketer’s control

• The theory basically explains how a consumer finds explanation to things happening in his life relating to products.

• How their behavior is affected.

• If a consumer drives his new car and finds a crack on the windshield, he may analyze the cause for the same.

• Might be the crack is due to a pebble hitting the glass or his own fault or the marketers fault.

• So attribution theory gives an insight of how the consumer reacts and find an explanation of the events happening in his daily life which relates to product experience.

STABILITY

• In banks not every customer can be satisfied, the organization knows this and gives value added services like financial advice, bill payment facilities etc.

• Putting such efforts retains the trust of the customer and the satisfaction level is kept intact as the customers feel that they are being cared.

• All major banks have realized this potential and are catering the needs of their customers.

FOCUS

• This aspect of the theory sheds light on the blame game. Who is responsible? Who is the focal point?

• If a problem occurs who is held responsible and why.

• Honda had faced a problem in their cars, Honda city. They had encountered some problems with the engine and the company had recalled all the batch and repaired it free of cost.

CONTROLLABILITY

• This aspect of the theory deals with the controllable factor of the problem.

• Is the problem occurred under the marketer’s control or the consumer’s.

• Pepsi had faced an allegation that a customer had found syringe inside the can.

• The allegation was baseless and was later found that the customer had tampered with the can.

• Pepsi used this opportunity to publicize it’s policies about packaging and safety.

• They also had made arrangements to show the packaging process .

• This gave a positive effect to Pepsi.

EQUITY THEORY

• Another approach developed by psychologists that is useful in understanding consumer satisfaction or dissatisfaction.

• It focuses on the nature of exchanges between individuals and their perceptions of these exchanges.

• In marketing, it has been applied as the exchanges between a buyer and a seller.

• Consumers form a particular form of perception of their own inputs and outputs in a particular exchange.

• Example: when buying a stereo, a consumer’s inputs might include information search, making the effort, money, psychological anxiety etc.

• The output would be a satisfactory sound system.

• Seller inputs might include a quality product, selling effort, a financing plan; a fair profit margin.

• Customer satisfaction means money!

• Marriott found that each percentage point increased in the customer-wide satisfaction measure of intent-to-return was worth some $50 million in revenues

• A study in the Harvard Business Review showed that just a 5 percent increase in customer retention boosts profits by 25 percent to 125 percent.

• IBM in Rochester, Minn., calculates that a 1 percent increase in customer satisfaction is worth $257 million in additional revenues over five years.

• What if the customer is not satisfied !!

• Customers are three times more likely than service providers to recall the

quality of the personal element in a transaction.

70-85% of dissatisfaction is due to customer service not product; 68% of

customers who stop buying do so because they perceive an employee as

discourteous or indifferent

• dissatisfied customers on average tell 12 friends of the poor service; satisfied

people tell 5 friends.

• the average business loses 10-30% of its customers each year (without knowing

which, when or why lost)

• For every complaint there are an estimated 25 unnoted complaints

• People who complain are generally younger, have higher incomes, are better

educated, have more experience with the product, are less brand loyal, and may

have higher expectations.

• Quick resolution results in higher satisfaction & loyalty than multiple contacts

THE DISCONFIRMATION PARADIGM

• Now we can take an example of a movie to explain the disconfirmation

paradigm.

• A consumer opts for a Jim Carrey movie and enters the movie hall with much

expectations. His movies are always funny.

• If the person evaluates it as funnier than expected then a positive disconfirmation

would result.

• Vice versa.

MARKETER’S AIM

• Marketers have to make sure that the consumer has to experience a positive

experience.

• Customer retention is prime.

• After sales service and customer retention.

• Long term relationship

• Making negative word of mouth into positive. E.g: Coca Cola

• Monitoring customer satisfaction is very important.

• Surveys are conducted by all companies who realize the potential in it.

• The results of such surveys are published in business magazines and also be used

as a marketing communication tool.

COMPLAINTS

• Majority of dissatisfied consumers do not complain.

• Some may take extreme measures as to go for legal means.

• Solving complaints are very important

• Companies take it as an opportunity to grow.

• Identifying and addressing the genuine complaints are vital.

IS CUSTOMER SATISFACTION IMPORTANT?

• It should be an extremely important goal for any firm.

• Customers switch to competitor brands as a result of dissatisfaction and lack of trust.

• Customer retention.

• Care about customers.

• Showing the effort.

• Build trusting relationships

• Thank you.