Understanding and Measuring Customer Satisfaction

1
Understanding and MeasuringCustomer Satisfaction
2
Behavioral Objectives Things To Know

• Know understand
• the five building blocks of marketing strategy
• the four Ps of marketing
• Value-line concepts
• benefits, price, value, value line
• the relationship between these concepts
• use these terms to describe what makes a product
  successful
• What it means to maximize the customer experience
• How do you measure satisfaction
• Overall measures of customer satisfaction
• Affective measures of customer satisfaction
• Cognitive measures of customer satisfaction
• Behavioral measures of customer satisfaction
• Expectancy value measures of customer
  satisfaction
• Components of a Satisfaction Survey

3
The Marketing Process
Consumer
4
The Marketing Process
The sale is complete when the consumer is
satisfied
What does this suggest aboutwhen the sale is
complete?
Demand Analysis
Product Development
P
Production
Consumer
Promotion Pricing Distribution
After-sale Service
Consumer
3Ps
5
Marketing Strategy Focuses on Creating Satisfied
Customers
ProductStrategy
PricingStrategy
PromotionStrategy
Target Market
DistributionStrategy
6
The 4 Ps of Marketing

• PromotionObjectives
• Promotion Blend
• SalespeopleKindNumberSelectionTrainingMotiva
  tion
• AdvertisingTargetsKinds of adsMedia typeCopy
  thrustPrepared by whom
• Sales Promotion
• Publicity

• Price
• Objectives
• Flexibility
• Level overProduct Life Cycle
• Geographic terms
• Discounts
• Allowances

• Product
• Physical good
• Service
• Features
• Quality Level
• Accessories
• Installation
• Instructions
• Warranty
• Product Lines
• Packaging
• Branding

• Place
• Objectives
• Channel Type
• Market Exposure
• Kinds of Middlemen
• Kinds and locations of stores
• How to handle transporting storing
• Service Levels
• Recruiting Middlemen
• Managing Channels

7
(No Transcript)
8
Instructor Supplements Add Value and Enhance the
Experience

• Printed test bank
• Computerized test bank
• On-line Learning Center
• Current events, marketing news
• Internet exercises

• Free texts
• Instructors manual
• Transparencies
• Powerpoint slides
• Video case studies
• Video games
• Instructors CD-ROM

9
Review of a Line Chart
PriceCharged
P1
1
P2
QuantitySold
Q1
Q2
10
Goal of the Market-focused Firm

• Delivering value that is sustainably superior (in
  customers' eyes) to competing alternatives, while
  providing adequate profit.

Note that, 1. Value Benefits ? Price 2. Price
Consumers perceived total cost of buying
using the product
11
Customer Value
Value Benefits ? Price

• Price both financial and non-financial consumer
  costs
• Benefits the sources of satisfaction provided
  by a product which vary by customer (vs
  features, which are unchanging product
  characteristics)
• Sources of Benefits arising from the anticipated
  use of the product, or from its price, promotion,
  or distribution

12
Marketing Strategy the Value Line
Value Benefits ? Price
Value Line
Benefits
Dissatisfaction
Price
Price both financial non-financial cost
13
Marketing Strategy the Value Line
Value Benefits ? Price

• BMW 335i (50,000)
• Dodge Viper SR-10 (82,200)
• Hyundai Accent GL (12,600)

Value Line
Benefits
Price
Price both financial non-financial cost
14
Marketing is notselling products. It is
satisfyingwants
15
And Satisfying Customersis Also Profitable
satisfaction metrix.mpg
5 increase incustomer retention
Profit increaseof 25
16
But . . . 4 Ps Updated The 4 Cs
Consumer Needs
Target Market
17
The 4 Ps Updated
The 4 Ps
The 4 Cs
Why
Product
Consumer Needs
Consumer needs are more important than particular
products.
Promotion
Communi- cation
Paid promotion is only one portion of a total
communication plan.
Price
Cost/price toSatisfy Needs
Financial price is just one cost (price, time,
opportunity cost, risk).
Distribution
Convenience to Buy
Accessibility overshadows store location (direct
mktg, phone, Internet, TV)
18
Satisfying Customers Leads toMaximizing the
Customer Experience

• Satisfaction reflects the total interactions a
  customer has with a company and its products
• It starts the moment a customer thinks of your
  product
• It does not end until the customer is completely
  satisfied with it

Source The Customer Experience, Net Company,
Fall 1999.
19
Maximizing the Customer ExperienceAddresses 3
Questions
Source The Customer Experience, Net Company,
Fall 1999.
20
How Do We Measure Customer Satisfaction and Build
a Customer Satisfaction Survey
Customer satisfaction measurement reports the
state of mind that customers have about a company
and its products or services when their
expectations have been met or exceeded. This
state reflects the customers lifetime of product
or service experience Customer satisfaction
with any product or survey reflects the
evaluation of the product, service, company, and
environment. Customer satisfaction is critical
to any product or service because customer
satisfaction is a strong predictor of customer
loyalty and product repurchase.
21

• Customer satisfaction may be measured by
  including
• cognitive (thinking-evaluative),
• affective (like/dislike), and
• behavioral action dimensions of the product or
  service experience.
• The Three Most Common Survey Types are
• Customer satisfaction surveys,
• Market segmentation surveys, and
• Concept testing surveys

22
(No Transcript)
23

• Customer satisfaction usually leads to customer
  loyalty and product repurchase.
• Measuring satisfaction is not the same as
  measuring loyalty. Satisfaction measurement
  questions typically include items like
• Overall, how satisfied are you with (brand name)?
• Would you recommend (brand name)?
• Do you intend to repurchase (brand name)?
• Graphically, customer satisfaction can be
  depicted as being influenced by perceived quality
  of product and service attributes, features and
  benefits, and is moderated by customer
  expectations regarding the product or service.
  Each of these constructs that influence customer
  satisfaction also need to be defined

24
Types of Expectations that Influence Customer
Satisfaction
Customer performance expectations about the
product and service attributes, features and
benefits to be enjoyed may be identified as
including both explicit and implicit
expectations.  Explicit expectations are mental
targets for product performance that include well
identified performance standards. Implicit
expectations represent the norms of performance
that reflect accepted standards established by
business in general, and other companies,
industries, and even cultures. Static
performance expectations concern how performance
and quality for a specific application are
defined.  Although each systems performance
measures are unique, general expectations relate
to quality of outcome and include accessibility,
customization, dependability, timeliness,
accuracy, tangible cues which augment the
application, options, cutting edge technology,
flexibility, and user friendly interfaces.  
Static performance expectations are the visible
part of the iceberg they are the ones we see and
-- often erroneously -- assume are all that
exist. Dynamic performance expectations are
about how the product or service evolves over
time and includes the changes in support and
product or service enhancement needed to meet
future business or use environments. Dynamic
performance expectations may result in revised
static performance expectations as new uses,
integrations, or systems require changes.
25
Types of Expectations that Influence Customer
Satisfaction
Technological expectations focus on the evolving
state of the product category. Mobile phones are
a continually evolving and very involving product
that demonstrates a high switch rate as new
technology appears. The availability of text
messing, email, camera, blue tooth technology and
MP3 capability changes technology expectations as
well as the static and dynamic performance
expectations of the product. These highly
involving products enhance perceptions of status,
ego, self-image, and can even invoke fear when
the product is not available. Interpersonal
expectations involve the relationship between
customer and the product or service provider.
These person to person relationships are
increasingly important, especially where products
require support for proper use and functioning.
Expectations for interpersonal support include
technical knowledge and ability to solve the
problem, ability to communicate, time to problem
resolution, courtesy, patience, enthusiasm,
helpfulness, understood my situation and problem,
communication skills, and customer perceptions
regarding professionalism of conduct, often
including image, appearance. For each of these
types of expectations that result in customer
satisfaction or dissatisfaction and complaining
behavior, the perceived quality and value are
critical and result in repurchase and loyalty.
26
Types of Expectations that Influence Customer
Satisfaction
Perceived QualityPerceived quality is often
measured through three questions overall
quality, reliability, and the extent to which a
product or service meets the customers needs.
Customer perceptions of quality are the single
greatest predictor of customer satisfaction.
Perceived ValuePerceived value may
conceptually refer to the overall price given
quality or the overall quality given price.
Perceived value is measured in many ways
including overall evaluation of value,
expectations of price that would be paid, and
more rigorous methodologies including the Van
Westendorp pricing analysis, and conjoint
analysis. The consumer behavior literature shows
that price is a primary indicator of quality when
other attributes and benefits are relatively
unknown. However for repeat purchases in some
product categories, price may be reduced in
importance. Customer LoyaltyCustomer loyalty
reflects the likelihood of repurchasing products
or services. Customer satisfaction is a major
predictor of repurchase, but is strongly
influenced by explicit performance evaluations of
perceived quality, and perceived value.
27
Types of Expectations that Influence Customer
Satisfaction
Building a Customer Satisfaction Survey When
building customer satisfaction surveys, several
measures may be implemented through a variety of
question types that focus on the overall product
or service attributes, features and benefits,
including Overall measures of customer
satisfaction Affective measures of customer
satisfaction Cognitive measures of customer
satisfaction Behavioral measures of customer
satisfaction Expectancy value measures of
customer satisfaction
28
(No Transcript)
29
When building a customer satisfaction survey, the
following items may be considered for
inclusion.
30
When building a customer satisfaction survey, the
following items may be considered for
inclusion.