Measuring Customer Satisfaction

Measuring Customer Satisfaction

HENRY JOHN N. NUEVAManagement Engineering

(A Brief Presentation)

Customer Satisfaction

A measure of how products and/or services supplied by a company meet or surpass customer expectation.

It is also a key performance indicator (measure) within business and is often part of the Balanced Scorecard.

WHY WE NEED TO MEASURECustomer Satisfaction?

• Delighted customers or clients are profitable on every company business.

• It can be use as a basis of monitoring, evaluating and developing new products and process that contribute to company’s performance management.

• Provides an indication of how successful the organization is at providing products and/or services to the marketplace.

2 MAJOR PURPOSE IN CREATING

The collection, analysis and dissemination of CS data send a message about the importance of tending to customers and ensuring that they have a positive experience with the company’s goods and services.

Customer Satisfaction?12

Satisfaction is perhaps the best indicator of how likely it is that the organizations’ customers will make further purchases in the future. Since current research has now focusing on the relationship between customer satisfaction and retention.

2 METHODS IN MANAGING Customer Satisfaction

Direct Methods: Directly contacting customers and getting their valuable feedback is very important. Following are some of the ways by which customers could be directly tabbed:

1. Getting customer feedback through third party agencies.

2.Direct marketing, in-house call centers, complaint handling department could be treated as first point of contact for getting customer feedback. (these feedbacks are compiled to analyze customers’ perception)

3. Getting customer feedback through face to face conversation or meeting.

4. Feedback through appreciation letter.

5. Direct customer feedback through surveys and questionnaires.

1

Indirect Methods: The following are indirect methods of getting feedback regarding customer satisfaction:

A. Customer Complaints: Customer’s complaints are the issues and problems reported by the customer to supplier with regards to any specific product or related service. These complaints can be classified under different segments according to the severity and department. If the complaints under a particular segment go high in a specific period of time then the performance of the organization is degrading in that specific area or segment. But if the complaints diminish in a specific period of time then that means the organization is performing well and customer satisfaction level is also higher.

B. Customer Loyalty: A customer is said to be loyal if he revisits supplier on regular basis for purchases. These loyal customers are the satisfied ones and hence they are bounded with a relationship with the supplier. Hence by obtaining the customer loyalty index, suppliers can indirectly measure customer satisfaction.

2

CHARACTERISTICS OF EXCELLENTQuality Measures & Data

High Satisfaction Loadings

Good Reliability

Low Error Variances

POSSIBLE DIMENSIONS WE COULD MEASUREIN AN ORGANIZATION

Quality of Service

Speed of Service

Pricing Complaints or Problems

Employees Trust & Relationship

Types of other services needed

Positioning in client or customers’ mind

3 PSYCHOLOGICAL ELEMENTS FOR EVALUATIONOF PRODUCT AND SERVICE EXPERIENCE

1. cognitive (thinking/evaluation)

2. affective (emotional-feeling/like-dislike)

3. behavioral (current/future actions)

How satisfied are you with the "taste" of Yoni fresh yogurt?

How important is "taste" to you in selecting Yoni fresh yogurt?

1. cognitive (thinking/evaluation)

2. affective (emotional-feeling/like-dislike)

Would you recommend "Yoni" to your family and friends?

Overall, how satisfied are you with "Yoni fresh yogurt"?

3. behavioral (current/future actions)

Would you recommend "Yoni" to your family and friends?

TOP 5 GENERAL WAYS TO MEASURE Customer Satisfaction

Survey CustomersThis is probably the only way to get customer feedback unless they

use a direct contact to your organization, which most people are too busy to bother with unless they are extremely upset for some reason.

We can provide surveys in several ways (through mail, email, over the phone or websites) and in order to get the best information, we should allow customers to answer questions on a weighted scale like:

(“Rate your experience on a scale of 1 to 5 with 1 indicating complete dissatisfaction and 5 indicating complete satisfaction”).

1


Understand Expectations If we know what our customers expect from us, it logically follows

that we will be better able to offer them an enjoyable experience.

Therefore, make an effort to discover the expectations of your customers in terms of both service and products in order to ensure that you’re meeting their needs.

2


Find Out Where You’re Failing If you’re not meeting customer requirements, you need to find out

where the failure is occurring. Examples of general questions that would behave the company to know where the lines of communication are breaking down so that relationship with customers can be mended are as follows:

1.Are the products less than what is advertised? 2.Are employees making promises that cannot be met? 3.Are customer service representatives dropping the call on customer concerns and managing their complaints?

3


Pinpoint Specifics Whether a customer is satisfied or not, the data we collect will

need to accurately assess what is working and what isn’t. So inquiries into level of satisfaction should include more than just the overall experience.

We need to determine the products and/or services they purchased, what they liked or disliked about their sales interaction, how the actual purchase compared to their expectations, and any suggestions they have for improvement.

4


Assess the Competition If we don’t know why customers prefer another brand over ours,

we cannot hope to keep them from flocking to the competition.

So as part of the survey process, we may want to consider inviting customers to compare and contrast similar products or companies to find out what they are offering that you are not.

5

Expectancy Value Measures of Behavioral Intention (BI), Attitude (A) and Satisfaction (SAT)

Expectancy value models have been found to perform well in predicting both satisfaction/dissatisfaction and behavioral intention (intention to try, purchase, recommend, or re-purchase a product or service).

The Expectancy value model using attitudes and beliefs reads:

where:•w1, w2 = weights that indicate the relative influence of the overall attitude toward the object and the normative influence to purchase the product•Ao = Attitude toward the object (brand, product, service or company)• = the overall attitude toward the object. The overall attitude is formed by the multiplicative product of ai (the person's affective evaluation of attribute i), and bi (here defined as the importance of attribute i in the purchase decision). The sum is taken over the k attributes that are defined as salient in the purchase decision.• = The overall normative component of the decision process. This is computed as the multiplicative product of nbi (the norms governing attitude i), andmci (the motivation of the respondent to comply with those norms).

Behavioral Intention (BI)Behavioral intention is measured using a question such as "Indicate the likelihood of you buying sometime during the next year" with a five or seven-point Likert or semantic differential scale labeled "definitely will purchase" and "definitely will not purchase" at the endpoints.

SatisfactionOverall satisfaction or dissatisfaction with an object is often measured using a five-point satisfaction scale. As an example, "Overall, how satisfied are you with Sparkle toothpaste?" could be measured with a "Very Satisfied, Somewhat Satisfied, Neither Satisfied Nor Dissatisfied, Somewhat Dissatisfied, Very Dissatisfied" scale.

Attitude (ai*bi)

bi - the probability that attribute i is associated with performing behavior B. The concept "Crest toothpaste prevents decay" could be rated on a seven point scale with endpoints labeled "Very Likely" and "Very Unlikely".

ai - the evaluation of belief i. A representative measure of ai would be "In terms of buying Crest toothpaste, decay prevention is …" with a five or seven point scale with "good" and "bad"; or "Excellent" and "Poor" at the endpoints

SAMPLE Customer Satisfaction Survey USING

FORMS AND PAPER BASED TOOLS


PHONE AND/OR PHONE SCRIPT

PHO

NE

SCRI

PT IVR Program


EMAIL


WEBSITE / NET PORTAL

END

Business

Measuring Customer Satisfaction