1. Measuring Customer Satisfaction and Loyalty

2. Measuring Customer Satisfaction and Loyalty
The value of measuring customer satisfaction
Conducting a customer satisfaction survey
Satisfaction and quality measure
Measurement of brad loyalty
Measurement of employee satisfaction and loyalty

3. I. The value of measuring customer satisfaction
measuring satisfaction over time—allows an organization to communicate a message of caring and to determine whether customers believe the organization is continuously improving, losing ground to a competitor, or stagnating
objective measure—considered to be hard data, such as number of units sold or time that customers spend in a queue waiting for service, that is not affected by perceptions of people
subjective measures—attempt to measure people’s perceptions of a brand, process, or experience with the organization in relation to competitive offerings

4. II. Conducting a customer satisfaction survey(1/9)
basic survey—eight steps include: (1) define the problem and objectives, (2) plan the survey design, (3) design a questionnaire, (4) select a sample, (5) collect data, (6) analyze data, (7) draw conclusions and prepare a report, and (8) follow up as input to strategy
Exhibit 10.1: A Survey Research Process

5. II. Conducting a customer satisfaction survey(2/9)
Stage 1: Defining the Problem
exploratory research—an informal study to provide background information that is usually needed to clarify the nature of a customer satisfaction problem
focus group interviews—loosely structured discussions with groups of 6 to 12 people who “focus” on a product or some aspect of the buying process
community complaint rooms—sites on the Internet that are designed to allow customers to complain about specific products, organizations, and services

6. II. Conducting a customer satisfaction survey(3/9)
Stage 2: Planning the Survey Design
survey design—specifies the specific techniques and procedures that will be used to collect and analyze data relevant to the satisfaction issue
descriptive research—a study to measure the characteristics (who buys, what do they buy, how much do they spend, when do they buy, where do they shop/purchase), of defined segments
causal research—uses carefully controlled experiments to isolate reasons for behaviors or outcomes

7. II. Conducting a customer satisfaction survey(4/9)
Stage 3: Designing the Questionnaire
wording survey questions—a skill in which the goal is to ask relevant questions that respondents can answer
double barreled questions—questions with two subjects or nouns. i.e., how satisfied are you with the cost and quality of the product?
Exhibit 10.2: Examples of Types of Satisfaction Questions for Tires

8. II. Conducting a customer satisfaction survey(5/9)
Stage 4: Selecting a Sample
sampling—any any procedure in which a small part of the whole is used as the basis for conclusions regarding the whole
who will be sampled—specifies the target population, the total group of interest
what is the sample size—big enough to represent the target population
probability sample—each element or person in the population has a known and non-zero chance of being selected for the sample
simple random sample—each element has an equal chance of inclusion
sampling error—the difference between the sample results and the results you would have gotten if you had been able to poll the entire population
nonprobability sample—sample units are selected on the basis of convenience or personal judgment
unrepresentative samples—the organization can use the results for exploratory ideas but should not base costly decisions on the results since the sample does not necessarily represent the views of the larger population

9. II. Conducting a customer satisfaction survey(6/9)
Stage 5: Collecting Data
field service firms—organizations that specialize in the collection of data
computer assisted telephone interview (CATI)—field workers enter the respondent’s answer directly into the database, minimizing translation errors

10. II. Conducting a customer satisfaction survey(7/9)
Stage 6: Analyzing the Data
coding—assigns numbers to subjective responses, e.g., the reasons for switching may be given identification numbers such as 1=cheaper price, 2=better value, 3=coupon, etc.
analysis—ranges from simple frequencies to complicated mathematical modeling and is beyond the scope of this text

11. II. Conducting a customer satisfaction survey(8/9)
Stage 7: Drawing Conclusions and Preparing the Report
purpose of customer satisfaction research—aid managers in making effective marketing decisions

12. II. Conducting a customer satisfaction survey(9/9)
Stage 8: Following Up
output of one study—typically the input for defining research objectives for the next one, thus, the ending discussion is the time to consider the specific issues in need of better description as well as the steps that should be taken to initiate the next measure

13. III. Satisfaction and quality measure
3-1 Perceptual drivers
3-2 Quality of tangible goods
3-3 Quality of services and service components of products

14. 3-1 Perceptual drivers
perceptual driver—similar to a key performance indicator, it identifies which issues seem to affect satisfaction the most
drivers of customer perceptions of brand, value, and relationship/retention equity:
Value equity
Brand equity
Relationship equity

15. 3-2 Quality of tangible goods
quality dimensions—include such aspects as performance, conformance to specifications, features, reliability, durability, and styling
Exhibit 10.3: Quality Dimensions for Goods

16. 3-3 Quality of services and service components of products
gap analysis model—defines potential problems between what customers expect and what the organization delivers
Exhibit 10.4: SERVQUAL: Five Dimensions of Service Quality

17. 3-3 Quality of services and service components of products
Four gaps of service delivery:
management perception-consumer expectation
management perception-service quality specification
service quality specification-service delivery
service delivery-external communications

18. IV. Measurement of brand loyalty
traditional behavioral measure—the number of times the brand is purchased divided by the total number of times the product category is purchased
customer loyalty—a customer’s commitment or attachment to a brand, store, manufacturer, service provider, or other entity based on favorable attitudes and behavioral responses, such as repeat purchase
Exhibit 10.5: Differentiating Levels of Sports Loyalty

19. IV. Measurement of brand loyalty
behavioral intention--assessed with surveys by asking about the customer’s willingness to repurchase and likelihood of recommending the brand or organization to a family member, friend, or associate
Exhibit 10.6: An Example Measure of Store Loyalty
e-loyalty—a customer’s favorable attitude toward an online retailer
Exhibit 10.7: Example Issues to Measure E-Loyalty

20. V. Measurement of employee satisfaction and loyalty
Internal customers vs. external customers
A key task for managers is to define the drivers of employee satisfaction and improve those components over time.

21. V. Measurement of employee satisfaction and loyalty
internal marketing—applying the basic principles to internal employees to ensure that frontline personnel, in particular, are providing desires levels of service
measurement options—include objective indicators (turnover), subjective answers (surveys of satisfaction), mystery shoppers, and other approaches

22. V. Measurement of employee satisfaction and loyalty
Internal customers vs. external customers
A key task for managers is to define the drivers of employee satisfaction and improve those components over time.