Donna J. Hill, PhD Professor of Marketing Foster College of Business Administration Bradley University

Satisfaction Loyalty and Retention Financial Performance Service Performance Current Belief About Outcomes of Customer Satisfaction With Service 1.Customer referrals 2.Long-term customer loyalty 3.Streamlined service delivery 4.Positive word of mouth 5.More cross- selling 6.Employee Satisfaction and Retention

Happy Customers  Retaining customers costs one-fifth of getting new ones  Loyalty and customer retention rates increase  Less emphasis on price as customers seek augmented benefits associated with their broader set of expectations  Share of account rises as customers increase their level of purchases  Customers are more open to cross-selling of multiple products  Highly satisfied customers recommend the organization to other prospects Each completely satisfied customer will tell five other people about the good or service

Service Quality Dimensions Cues used to assess service Reliability Assurance Tangibility Empathy Responsiveness Perceived Services – evaluations are based on perception

The Five Dimensions of Customer Service Quality - RATER Ability to perform the promised service dependably and accurately. Credibility, security, competence and courtesy. Physical facilities, equipment, and appearance of personnel. Approachability, listening, understanding the customer Willingness to help customers and provide prompt service. Tangibles Reliability Responsiveness Assurance Empathy

Reliability  Performing the service accurately and consistently. Performing services right the first time. Maintaining error free records. Dependability in handling customers’ service problems. Providing service as promised. Giving estimated time for service whether it is room service, laundry service, delivery, or simply how long it will take to be seated at a restaurant. Always giving accurate information

Responsiveness  Hours open are convenient to customers  Answering the phone and  Answering questions.  Keeping customers informed as to when services will be performed.  Prompt service to customers.  Willingness to help customers.  Readiness to respond to customer’s requests. “Because I don't want to waste my time, I don't frequent shops that do not have consistent hours.” “Very few stores in the downtown are open past 5:00. Very few stores are open on Sunday. Increasing the hours of operation would allow those of us that work out of town or until 5:00 each day the opportunity to shop more locally”.

Assurance  Employees who instill confidence in customers.  Making customers feel safe in their transactions.  Employees who are consistently courteous.  Employees who have the knowledge to answer customer questions. “Employers need to screen their employees better. Have seen the young girls in stores with feet up on the desk kicked back and using their cell phones. They were too busy to help me”.

Empathy  Giving customers individual attention.  Employees who deal with customers in a caring fashion.  Having the customer’s best interest at heart.  Employees who understand the needs of their customers.  Personalized attention “I want to spend my money in Canton but it makes it very difficult when the service is subpar”.

Tangibles  Employees who have a neat, professional appearance.  Visually appealing facilities.  Modern equipment.  Visually appealing materials associated with the service.  Web pages “I would love to see some downtown businesses take more pride in their storefronts. Some owners do not shovel snow, do not clear leaves in the fall, and if they would invest a little time and effort enhance their facade, they would make a much more positive first impression on their customers.”

In order of importance  Reliability (32%)  Responsiveness (22%)  Assurance (19%)  Empathy (16%)  Tangibles (11%)  Note: Different for different services, different contexts, and different people.  Note: What shows up as unimportant becomes important if it crosses a certain failure threshold. Note one study found that 68% of dissatisfaction could be traced to rude or indifferent treatment!

Studies Consistently Find Customers Judge You “On the Little Things”  Treat the customer like a somebody.  Greet the customer.  Be polite!  Appearances do count!  Do what you say you will.  Listen to your customers. Repeat back to the customer what it is you heard them say.  Mea Culpa.  Avoid “pinging”

Secret Shoppers Experiences Negative: One place in particular: did not greet when we entered the door—not welcoming Answered a personal phone call while I was checking out/paying for my product Assumed we were local and didn’t need any assistance while shopping Positive:  Very friendly, personable, helpful, went out of their way to help you  Gave suggestions on other stores to visit  Suggested things to do in Canton—knowledgeable about other local businesses

The Customer Satisfaction Loyalty Relationship Loyalty (Retention) Very Dissatisfied NeitherSatisfied Very Satisfied Satisfaction Near Apostle Zone of Defection Zone of Indifference Zone of Affection Terrorist Apostle Source: Adapted from Thomas O. Jones and W. Earl Sasser, Jr., “Why Satisfied Customers Defect,” Harvard Business Review, November-December 1995, p. 91.