Mktg Final Draft

8/9/2019 Mktg Final Draft

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A Term paper on

CUSTOMER SATISFACTION AND BEYOND

Subject: Sales management

Submitted to: Mr. Raghunathan

Submitted By:

Group: 13

Praveen Kumar Jha (09234)

Ravi Teja Reddy. S (0409020)

Ramya. K (09238)

Shwetha Reddy. T (0409018)

Krishna Sumanth .C (0409004)


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Executive summary:

Business industry today is complex. There are big competitions in every business. That is why

many research and study are being conduct for their continuous growth. Customers loyalty is

one factor that can help to many organizations. If they gain their trust, that will be mean a long

relationship with them. They can also ask for a referral to their friends, families and business

associates. Thus, the customers loyalty is one of the important tool or way for the companys

brand awareness and it is the cheapest way. For big companies are expending much money for

brand awareness, excellent customers service that will lead to their loyalty is a big factor for

their business.

Objective of study:

y To understand the effect of customer satisfaction on sales generated by the organization.y To understand the difference between customer satisfaction and customer delight.y To understand the effect of dissatisfied customer in HCL Infosystems Ltd Hyderabad.


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Contents

Introduction:............................................................................................................................................ 4

Customer Satisfaction: ............................................................................................................................. 4

Factors effecting customer satisfaction:.................................................................................................... 5

Effect of Customer Satisfaction on Customer Loyalty and Retention: ............................... ...................... .. 6

Customer Delight: ................................................................................................................................... 7

Difference between Customer Satisfaction and Customer Delight: .............................. ...................... ....... 7

Why Delighting Customer?...................................................................................................................... 7

How to keep customer delight? ................................................................................................................ 8

Importance of customer delight:............................................................................................................... 8

Customer delight curve: ........................................................................................................................... 8

Beneficial for the management:................................................................................................................ 9

Beneficial for the company: ..................................................................................................................... 9

Customer Loyalty: ................................................................................................................................... 9

Loyalty Attitudes: .................................................................................................................................. 10

Value of Greater Customer Loyalty: ...................................................................................................... 10

Moving Customers beyond Customer Satisfaction to Loyalty:................................................................ 11

Overcoming Common Selling Problems & Key Points To Get The Customers Satisfied: ....................... 12

Case study: HCL Infosystems ltd Hyderabad ......................................................................................... 14

Conclusion: ........................................................................................................................................... 17

Bibliography:......................................................................................................................................... 18


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Introduction:

To be successful, organizations must look into the needs and wants of their customers. That is

the reason why many researchers and academicians have continuously emphasized on the

importance of customer satisfaction, loyalty and retention. Customer satisfaction is important

because many researches have shown that customer satisfaction has a positive effect on an

organizations profitability. Due to this, the consequences of customer satisfaction and

dissatisfaction must be considered. There is also a positive connection between customer

satisfaction, loyalty and retention. Therefore, customer satisfaction and loyalty are all very

important for an organization to be successful.

Survival of organizations, moreover, is highly dependent on customer satisfaction and customer

loyalty. Customer satisfaction, for instance, is considered as a necessary condition for customer

retention, and assists in realizing economic goals like sales turnover and profit revenue.

Customer satisfaction is defined as the customers response to the evaluation of the perceived

discrepancy between prior expectations and the actual performance of the product/service as

perceived after its consumption.

Likewise, customer loyalty is considered by many organizations as key to long term profitability.

It is defined as a deeply held commitment to re-buy or re-patronize a preferred product/serviceconsistently in the future. This leads to repetitive same-brand or same brand-set purchasing

despite situational influences and marketing efforts having the potential to cause switching

behavior. Once brand loyalty is established, customers will not only continue to buy the

products and services in the future but also recommend to family and friends, and choose the

product over competitors.

CustomerSatisfaction:Many researchers have looked into the importance of customer satisfaction. Kotler (2000)

defined satisfaction as: a persons feeling of pleasure or disappointment resulting from

comparing a products perceived performance (or outcome) in relation to his or her

expectations. In terms of value, the difference between the bundle of benefits a customer gets


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and the total costs incurred in evaluating, obtaining, using, & disposing of product. Higher the

difference, higher the customer gets satisfied. Satisfaction can be associated with feelings of

acceptance, happiness, relief, excitement, and delight. There are many factors that affect

customer satisfaction. These factors include friendly employees, courteous employees,

knowledgeable employees, helpful employees, accuracy of billing, billing timeliness,

competitive pricing, service quality, good value, billing clarity and quick service.

In order to achieve customer satisfaction, organizations must be able to satisfy their customers

needs and wants. Customers needs state the felt deprivation of a customer; whereas customers

wants refer to the form taken by human needs as they are shaped by culture and individual

personality.

Factors effecting customer satisfaction:

y Friendly employeesy Helpful and courteous employeesy Quick servicey Billing clarityy Accuracy of billingy Good valuey Service quality


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y Competitive pricingy Product satisfies the need of the customer

Effect of Customer Satisfaction on Customer Loyalty and Retention:

Some experts argue that having satisfied customers is not enough, there has to be extremely

satisfied customers. This is because customer satisfaction must lead to customer loyalty.

Building customer loyalty is not a choice any longer with businesses: its the only way of

building sustainable competitive advantage. Building loyalty with key customers has become a

core marketing objective shared by key players in all industries catering to business customers.

The strategic imperatives for building a loyal customer base are as:

y Focus on key customersy Proactively generate high level of customer satisfaction with every interactiony Anticipate customer needs and respond to them before the competition doesy Build closer ties with customersy Create a value perception

There is an increasing recognition that the ultimate objective of customer satisfaction

measurement should be customer loyalty. High customer satisfaction will result in increased

loyalty for the firm and that customers will be less prone to overtures from competition.

Satisfaction is positively associated with repurchase intentions, likelihood of recommending a

product or service, loyalty and profitability. Loyal customers would purchase from the firm over

an extended time. Satisfied customers are more likely to be repeat (and even become loyal)

customers. Satisfaction also influences the likelihood of recommending a departmental store as

well as repurchase but has no direct impact on loyalty. Thus satisfaction in itself will not

translate into loyalty. However, satisfaction will foster loyalty to the extent that it is a

prerequisite for maintaining a favorable relative attitude and for recommending and repurchasing

from the store. Once customers recommend a department store it fosters both re-patronage and

loyalty towards that store. Thus the key to generating loyalty is to get customers to recommend a

store to others. Also, customers are likely to recommend a department store when they are


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satisfied with that store and when they have a favorable relative attitude towards that store.

Companies with satisfied customers have a good opportunity to convert them into loyal

customers who purchases from those firms over an extended period.

Customer Delight:

The result of delivering a product or service that exceeds customer expectations.

Customer delight is a key to success. Customer delight refers to if the company reaches beyond

the expectations of the customer and the customer exceeded quality, then the customer is

delighted. Customer cannot be delighted if he/she is not satisfied, the factor of delighters comes

after the factor of satisfying consumer need. The delighted customer is more valuable for the

company as it will help to the companies to compete with the competitors. A delighted customer

finds the largest perceived value-cost gap. Customers are moving towards services and quality.

Delighted customer can do a lot in the favor of a company.

Difference between Customer Satisfaction and Customer Delight:

It is not enough we satisfy the customer, basically customer delight have importance to manage

the quality of product.Customer delight and satisfaction were not the same because delight to take pleasure in which

satisfaction means how we agree the person that will purchase the product or not. So the both

gives different meanings.

In short, a delighted customer is more likely to remain the customer of an organization then those

who are merely satisfy.

Why Delighting Customer?

The perspective that why delighting the customer is refers that it is the most factor to be

consider. A delighted customer can remain loyal, can repeated buying, a good word of mouth. A

delighted customer can increase the profit rate tents to over the life of it. A new acquired

customer can cost five times of a remained delighted customer.


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How to keep customer delight?

The most successful businesses have discovered a formula that goes beyond product and service.

Their business is providing delight to their customers by understanding their specific personal

interests, anticipating their needs, exceeding their expectations, and making every moment and

aspect of the relationship a pleasant or better yet, an exhilarating experience.

Importance of customer delight:

When it comes to marketing, the ultimate target of every company is to delight the customer. The

basic reason is to stay in the market and earn profit as well. Companies can earn profit and can

stay in the market by satisfying customer needs and also by delighting them. The customer can be more loyal to the company products just by the fulfillment of the expectations by the

customers.

Customer delight curve:


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Beneficial for the management:

If the company has the ability to takeover more customers that is good enough. If the company

has the ability to take away its customers from competitors is also good. Every company applies

some rules and has set of factors to delight the customers. So the customer can be satisfied and

then can be delighted. This is valuable for the company to delight the customers.

The company has the keen customers to its product and has quality products and the loyalty and

also the fulfillment of the expectations so the management can play the role of keeping it

maintained in the market, the image of the company If the company does not have the ability to

keep away its customers from the competitors so the customers can be moved to. The other

company can make more customers just by applying the same clauses to its management so then

to the customers.

Beneficial for the company:

Different companies have different strategies for gaining profit in the market. The basic factors

are the work cultures and the exceeded the customers values. Companies have the more values in

the market and having competition in the market. This is only possible if the company has large

amount of stick to customers and if the customers of the company are delighted.

Customer Loyalty:

Loyalty has two definitions. Loyalty behavior means the act of customers making repeat

purchases of their current brand, rather than choosing a competitor brand instead. Loyalty

behavior is also called customer retention. Loyalty attitudes are those judgments and feelings

about your product, service, brand or company that are associated with repeat purchases.

Sometimes customers exhibit loyalty behavior without having loyalty attitudes, as in markets

dominated by a monopolist. And sometimes customers exhibit loyalty attitudes without

demonstrating much loyalty behavior, as in the case of true blue customers who buy very


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infrequently. Still, it is worthwhile to examine loyalty behavior and attitudes in more detail,

because each definition has value.

The value of the behavior definition is that it directly relates to sales and market share. Loyalty

behavior is measured by analyzing customers sales transactions, revealing customer retention

rates and customer defection rates over various time periods. As transactions of individual

customers are tracked over time, this shows their repeat purchases and "lifetime value." Then

lifetime value is linked to demographics, and used in developing marketing strategies that target

high value customers.

Loyalty Attitudes:

Loyalty attitudes are a softer measure than behavior because people can feel one way and behave

quite differently. Sometimes customers are classified into loyalty attitude groups such as "new

arrivals", "repeat buyers," "advocates," "loyalists" and so on as they slowly bond with the

company over time. Loyalty attitudes are measured by means of customer surveys. There is no

widely accepted standard for what questions to ask or what is a "good" score. Instead a good

process is needed that produces useful information. For example, customers' loyalty attitudes can

be tracked over time and this trend information can be used to see where the company may be

improving or slipping, and learn which of the improvement efforts are having an impact on

customer attitudes.

Value of Greater Customer Loyalty:

Loyalty behavior is worth almost any effort unless it is achieved by deep price cutting or major

promotional giveaways that destroy profits. Loyalty is so valuable because it has a huge impact

on market share. It is undeniable that each customer who switches from Brand A to Brand B

raises Brand Bs market share and lowers Brand As market share. In most markets there is a

fairly high degree of this brand switching or churn. Churn is a pool of potential customers that

smart competitors pursue. Established repeat customers may often generate superior profit


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margins. They require less customer care, have less price sensitivity, and need fewer advertising

and promotional inducements; they refer their family and friends to your brand and so on.

Moving Customers beyond Customer Satisfaction to Loyalty:

Loyalty behavior is the result or outcome of very high satisfaction. What has to be worked on

and improved is satisfaction. As customers become more satisfied they start to take on some

loyalty attitudes. In managing a loyalty program it makes most sense to consider loyalty attitudes

to be part of customer satisfaction. All the efforts in this field need to be directed at winning

more favorable customer attitudes to get more loyalty behavior. A lot of time should not be spent

on trying to improve loyalty behavior; its just the result. Its a metric. Improving the root

causes of customer satisfaction and that will create loyalty behavior outcomes should be the

focus. You can't improve loyalty by being "results oriented." Again, that is because loyalty

behavior is a result, an outcome, a metric. A high jumper can contemplate clearing the bar at

seven feet (the result or outcome) but this focus on a desired result doesn't help accomplish the

result. Only by training and practicing can the high jumper improve performance and start

raising the bar. Loyalty can be improved by improving a product's root causes of customer

satisfaction.

There is a complex relationship between satisfaction and loyalty. Satisfaction is the first tier in

the relationship between a customer and the company. In order for a company to differentiate

itself from the competition, it will have to move customers from the first tier of this relationship,

satisfaction, to the second tier, loyalty.

A loyalty model incorporates both behavioral as well as psychological components to compute a

loyalty index. The results of this loyalty index are then used to create market segments that

classify customers current relationships with the company. Customers will be grouped into

segments based on their level of comfort with their relationship with the company. These results

are very strategic for the company because they alert the company to potential departing

customers. A similar index can be developed for potential customers. This index classifies

customers based on their likelihood to switch from their current company to another company.


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Again this is very strategic for the company because this can be used to decide where to allocate

marketing and advertising resources to convert potential customers into customers.

Overcoming Common Selling Problems & Key Points To Get The CustomersSatisfied:

y Selling is the management of buying1. It requires high professionalism, lot of hard work, self-discipline2. It should focus on buying actions, not selling actions

y Focus on being a professional. Amateurs hope, but professionals work.1. They always try to improve2. It could be more better3. Study your product and the competitive product. gather all the information4. Set goals and make plans to achieve them5. Practice till perfect and always try to improve.

y There is no such thing as soft sell and hard sell. There is only smart sell and stupid sell.1. The only way to understand Customers Buying Motives is to have the Customer

to describe it to you.2. Understand his buying motives.3. Maximum cooperation from customers only if your questions make sense to them.

See through the customers eyes.

y Understand the disinterest and then probe for needs.1. Analyze the customers situation & point of view2. Ask good questions3. Reveal needs and opportunities. (improved product performance, better service,

reduced cost)

4. In selling as in medicine, prescription before diagnosis is malpractice


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y Concentrate on highest potential customers.1. Identify those who are in particular need.2. Make sure the customer needs your product. (The ability to concentrate and to use

time well is everything)

y Accept that customer knows best.1. Customers feel that all the products are same2. We are using the best.3. He knows he has problems. He is not open to discussions.4. The greatest selling opportunity always exists when you have a solution to some

ones need. (when the product is right, you dont need to be a great marketer)

y Become an expert on the features & benefits of your product.1. When the customer says I dont need your product, it is not the end of selling

process, it is the beginning.

y If you dont sell, its not the product thats wrong, its you.y Customers never buy a product, but buy a bundle of benefits that have to do with utility,

value and service, and its the salespersons job to make sure the customer is never

disappointed.

y Selling consists of transferring a conviction by a seller to a buyer.y What really drives re-purchase is high quality customer service.

1. If he is treated badly, he will never buy your product.y The best part of selling is to recognize that you and your customers are on the same side,

you are helping them to buy.


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Case study: HCL Infosystems ltd Hyderabad

HCL Info systems Ltd is one of the pioneers in the Indian IT market, with its origins in 1976. For

over quarter of a century, HCL has developed and implemented solutions for multiple market

segments, across a range of technologies in India. HCL has been in the forefront in introducing

new technologies and solutions. HCL Infosystems Ltd draws its strength from 30 years of

experience in handling the ever changing IT scenario, strong customer relationships, ability to

provide the cutting edge technology at best-value-for-money and on top of it, an excellent

service and support infrastructure. Today HCL is countrys premier information enabling

company. It offers one-stop-shop convenience to its diverse customers having an equally diverse

set of requirements. Be it a large multi-location enterprise, or a small/medium enterprise, or a

small office or a home, HCL has a product range, sales and support capabilities to service the

needs of the customers. HCL has Indias largest distribution and retail network, taking to market

a range of Digital Lifestyle products in partnership with leading global ICT brands, including

Nokia, Apple, Casio, Kodak, Toshiba, and Bull, Ericsson, Cisco, Microsoft, Konica Minolta and

many more.

After engaging into 5 weeks of sales and getting good experience about the market and about

how sales happens in reality. As a project trainee my job was to visit clients belonging to

different verticals like International schools, Engineering Colleges, Pharmacy Colleges, MBA

Colleges, Multi Specialty Hospitals and Software Companies and getting to know requirements

of various products. A demonstration was given to explain various products of HCL Infosystems.

My main job over there was to generate sales lead to the company.

With the interaction of some of the HCL Infosystems Ltd customers I came to know that some of

the customers are highly dissatisfied with the service quality HCL Infosystems Ltd offers. Some

of the customers are not satisfied with the distribution channel and credit facility of HCL

Infosystems Ltd. Because of these dissatisfaction issues they have stopped buying

Laptops/Desktops and other products of HCL Infosystems Ltd. Some of the examples are quoted

below:


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Times of India:

During 1993-1994 times of India were using HCL Products all over India. There was some

service requirements came into those products and that issue were not rightly addressed by HCL

Infosystems Ltd team. Because of that currently Times of India is not using HCL Infosystems

Ltd products now.

Sagar society Hyderabad:

They were loyal customers of HCL Infosystems Ltd and they bought some HCL Laptops; there

was some service issue in those Laptops. They gave HCL service centre 15 Laptops with bag and

charger but HCL service centre team returned only Laptops saying that we took only Laptops

from you. This issue was not solved by HCL Infosystems Ltd team and finally they lost their oneloyal customer. Now also they are ready to give order to HCL with condition that they have to

solve their, that service issue first.

SEW infrastructure Hyderabad:

They ordered some Laptops to HCL Infosystems Ltd and paid 100% advance because they

wanted Laptops to be delivered in 1 week. HCL Infosystems Ltd executive promised that they

will deliver the Laptops within 1 week but after 6 weeks also Laptops were not delivered. So

they got so much of dissatisfied with HCL Infosystems Ltd that they black listed HCL

Infosystems Ltd saying that we will not purchase any product from HCL Infosystems Ltd.

RVR College of engineering Hyderabad:

They purchased HCL Desktops, but some service issues were not rightly addressed by HCL

Infosystems Ltd. So they stopped making purchase decisions in favor of HCL Infosystems Ltd.

When I visited RVR campus and with a round of talk they got convinced and got ready to give

an order of 60 desktops out of 120 required desktops with saying that if we will be satisfied this

time next time we will make purchase decision in favor of HCL Infosystems Ltd.


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Joginpally B.R. College of engineering college Hyderabad:

Because of some service issue they stoped making purchase decision in favor of HCL

Infosystems Ltd. But when we visited the campus new HOD were there. Mr. Ajay kumar (CSE-

HOD) invited HCL to sponser an event there so that ice between college management and HCL

Infosystems Ltd should not be there. After sponsoring event series of talks started to purchase

and sale of 600 desktops started.

Satisfied Customers:

Other than these dissatisfied customers, some of the customers were satisfied also. They were

mainly satisfied with the price offered by HCL Infosystems Ltd products, rightly addressed

service issues, and summer projects provided to B-Schools student. Some of the examples ofsatisfied customers:

Geethanjali College of engineering and technology Hyderabad:

There was some service issues in desktops provided to the college. That issue was rightly and

timely addressed by HCL Infosystems Ltd so they were satisfied. They were also satisfied with

the price quoted by HCL Infosystems Ltd.

CMR Group of Institution Hyderabad:

The price offered to this group of Institution is highly competitive and service issues are also

rightly and timely addressed. The main reason for this is they have many institutions under one

umbrella and they purchase a large number of HCL Desktops every year.

Malla reddy group of Institutions Hyderabad:

The price offered to this group of Institution is highly competitive and service issues are also

rightly and timely addressed. The main reason for this is they have many institutions under one

umbrella and they purchase a large number of HCL Desktops every year.


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Key learning from the case:

y Customer satisfaction is one that helps in retaining the old customers and also helps inacquiring new customers. It is the responsibility of the company to keep its customers

satisfied.

y One satisfied customer generates leads for organization by word of mouth publicity. Ithelps in better sales for organization and brand building.

y Service is one which gives a competitive edge over others. The company should be readyto listen to the customer grievances and should try to solve them at the earliest.

y The delivery time should be minimized. If the company is able to deliver the goods within the stipulated time then the customer will becomes loyal.

y The company should listen to what the customer says, should take the feedback andmodify the product according to the customer specifications.

Conclusion:

y Everyone who purchases a product or a service does so with certain expectations aboutwhat product and service will do when it is used. If the performance falls short of

expectations, the customer is dissatisfied. If the performance matches the expectations the

customer is satisfied.

y Today, more than ever before, retaining customers and gaining their loyalty are the keysto business survival and profitability. A company that learns to speak the language of

process, builds relationship of trust with stakeholders, and is proactive rather than

reactive with the forces of change will create value for both itself and its customers.

y Relationship marketing seems to be vogue. The new, increasingly efficient ways thatcompanies have of understanding and responding to customers needs and preferences

seemingly allow them to build more meaningful connections with the customers than

ever before. These connections promise to benefit the bottom line by reducing costs and

increasing revenue.


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Mktg Final Draft