Customer Satisfaction Evaluation

Customer Satisfaction, Dissatisfaction & Strategies : 

Customer Satisfaction, Dissatisfaction & Strategies Authored By: Anupam Kumar Reader, SMS Varanasi Email: anupamkr@gmail.com

Customer Satisfaction : 

© Copyright 2010- Anupam Kumar 2 Customer Satisfaction

Customer Satisfaction – Why? : 

© Copyright 2010- Anupam Kumar 3 Customer Satisfaction – Why? Mc Kinseys 1999 Study: Repeat customers generate over twice as much gross income as new customers By 10% increase in customer value to customers Revenue from repeat customers goes up by 5.8% Percentage of customers who repeat purchase go up by 9.5% Customer churn rate decrease by 6.7% Reichhald Study For 5% increase in customer retention the increase in Net Present Value occurred from 35% (Software Firms) to 95% (Advertising Firms).

Product / Service Evaluation : 

© Copyright 2010- Anupam Kumar 4 Product / Service Evaluation Evaluation Factors PERFORMANCE FEATURES SERVICE WARRANTY PRICE REPUTATION Evaluation Stages Instrumental performance relates to the physical functioning of the product. Symbolic performance relates to aesthetic or image-enhancement performance. Affective performance is the emotional response that owning or using the product or outlet provides

Evaluation Factors : 

© Copyright 2010- Anupam Kumar 5 Evaluation Factors PERFORMANCE Fitness for use Product / Service is ready for use Availability Reliability Maintainability FEATURES Secondary Character Extra Facility SERVICE Provide service at right time WARRANTY Represents a promise of a quality product Forces the organisation to Focus on customer need Correct the action system

Evaluation Factors : 

© Copyright 2010- Anupam Kumar 6 Evaluation Factors PRICE Customers are willing to pay higher price towards quality Customer expects good product at low price To succeed the organization should identify the customers value perception as the same change continuously REPUTATION Customers buy products from known companies Reputation brings market to the organization Organizations should strive for customer throughout its life cycle.

Customer Feedback : 

© Copyright 2010- Anupam Kumar 7 Customer Feedback Comment Card. Customer Questionnaire. Focus Groups. Toll Free Telephone No. Customer Visits. Report Card. Internet & Computer. Employee Feedback. Customer complaints

Comment Card : 

© Copyright 2010- Anupam Kumar 8 Comment Card Procedure Comment Card can be attached to the Warranty Card the Product at the time of Purchase Comment Card captures information like Name, Age & Address Occupation What made the customer buy that product Limitations For Customer there is little or no Incentive to Comment Customers respond when there is something very good or very bad Typically used in Hospitality Industry

Customer Questionnaire : 

© Copyright 2010- Anupam Kumar 9 Customer Questionnaire Procedure Popular tool for obtaining opinion and perception about Organization Product Service Surveys ask Customers to grade the Questions on a 1-5 or 1-10 LIKERT SCALE Limitations COSTLY TIME CONSUMING Does not tell about The importance of individual questions relative to others What the customers expect from the organization Results are not representative of the normal population Only those who feel very strongly (Good or Bad) tend to respond

Focus Group : 

© Copyright 2010- Anupam Kumar 10 Focus Group Popular way to obtain feedback Used to find out what customers are actually expecting Group of Customers is assembled in a meeting room to collect information Carefully prepared questions are asked by skilled moderators Moderators probes into participants ideas, thoughts, perceptions and comments Group selected are from people having the same profile as the expected customers This techniques is sometimes also used within the organization to address internal issues

Focus Group (Imprint Analysis) : 

© Copyright 2010- Anupam Kumar 11 Focus Group (Imprint Analysis) Procedure Imprint analysis is an emerging technique used in the focus group Good way to obtain intrinsic feeling about the product /service Word Association, discussions & relaxation techniques identify a customers emerging needs Rationale Feelings are not easily obtained from customers Customers often hold back information in survey Imprint analysis helps to understand the human emotions involved in the purchase decision

Other Techniques : 

© Copyright 2010- Anupam Kumar 12 Other Techniques Toll Free Number Effective technique for complaint feedback Organizations can respond faster and economically to the complaints Customer Visits Visit customers place of business is an effective way to gather information Accurate information is obtained People can see first hand how the product is performing Report Card Internet & Computer

Types of Customer : 

© Copyright 2010- Anupam Kumar 13 Types of Customer Internal Customers Customers within the organization Every person in the process Each department is a customer to the preceding department External Customers Who uses the product Who purchases the product Who influences the sale of the product Customers Perception of Quality Quality is what customer perceives to be Customer needs keep changing

Customer Informational Hierarchy : 

© Copyright 2010- Anupam Kumar 14 Customer Informational Hierarchy Customers Frontline Sales Team Functional Teams Senior Managers CEO

Employee Feedback : 

© Copyright 2010- Anupam Kumar 15 Employee Feedback Employees are untapped source of information Employees provide deeper insight into conditions Organizations listen more to external customers than internal customers Customers research reveals what is happening Employees research reveals why it is happening

Customer Complaints : 

© Copyright 2010- Anupam Kumar 16 Customer Complaints Procedure Customer Complaints are Reactive but very useful. Complaints give organizations a second chance. By working on complaints organizations can improve on the product / services. Limitations 80% customers do not report complaints they switch brands 18.5% complaints reach frontline teams Only 1.5% complaints reach top management For the management overall complaints seem miniscule when combined with overall reactions.

Corrective Action : 

© Copyright 2010- Anupam Kumar 17 Corrective Action Once customer complaints are received and understood. Take steps to correct the same Incorporate customers voice in the Product / Service.

Strategies to Better Address Needs : 

© Copyright 2010- Anupam Kumar 18 Strategies to Better Address Needs Mass Customization Give the customers exactly what the customer wants It is a result of Flexible manufacturing system, JIT & Cycle time reduction E.g. In sale of flats Customers specify the floorings, internal paints, switch models, bath fittings, kitchen accessories etc. Customerization

Mass Customization : 

© Copyright 2010- Anupam Kumar 19 Mass Customization Modular Design Form of standardization where design consists of interchangeable modules (components) thus helping: Simplification of assembly and customization Easy repair & replacement However, modular design has limitation on variety Delayed Differentiation Delayed differentiation is a postponement tactics The product is not fully assembled until the customer preferences or specifications are known. May affect the service time of the product.

Customerization : 

© Copyright 2010- Anupam Kumar 20 Customerization Concurrent Engineering Concurrent engineering is bringing together marketing, engineering, manufacturing, purchasing, service, packaging, etc. people early in the design phase. Over the Wall Approach In this system team from the manufacturing, design, product conception and other functions are encouraged to interact with the customers so that the complete organization becomes customer focused.

Post Purchase Dissonance : 

© Copyright 2010- Anupam Kumar 21 Post Purchase Dissonance Post Purchase Dissonance occurs when a consumer has doubts or anxiety regarding the wisdom of a purchase made and is a function of the following: The degree of commitment or irrevocability of the decision The importance of the decision to the consumer The difficulty of choosing among the alternatives The individual’s tendency to experience anxiety

Slide 22: 

© Copyright 2010- Anupam Kumar 22 ? Causes of Customer Dissatisfaction Can minimize through: Effective Communication Follow-up GuaranteesWarranties Under-promise & over-deliver Marketing Cognitive Dissonance Did I make a good decision? Did I buy the right product? Did I get a good value?

Bibliography : 

© Copyright 2010- Anupam Kumar 23 Bibliography Lindquist, Jay D. and Sirgy, M Joseph. Consumer Behaviour. New Delhi: Cenage Learning India Private Limited, 2009. Hawkins, Del I., Best, Roger J., Coney, Kenneth A. and Mookerjee, Amit. Consumer Behaviour: Building Marketing Strategy. Ninth Edition New Delhi: Tata McGraw-Hill Publishing Company Limited, 2007. Schiffman, Leon G. and Kanuk, Leslie L. Consumer Behaviour. Ninth Edition. New Delhi: Dorling Kindersley (India) Pvt. Ltd. Licenses of Pearson Education in South Asia, 2009. Loudon, David L. and Della Britta, Albert J. Consumer Behaviour. Fourth Edition. New Delhi: Tata McGraw-Hill Publishing Company Limited, 2002. Assael, Henry. Consumer Behaviour: A Strategic Approach. New Delhi: Biztantra, An Imprint of Dreamtech Press. By arrangement with Houghton Mifflin Co., USA, 2009. Khan, Martin. Consumer Behaviour. Second Edition. New Delhi: New Age International (P) Limited, 2004. Nair, Suja R. Consumer Behaviour in Indian Perspective. Mumbai: Himalya Publishing House, 2007. Kumar, S Ramesh. Consumer Behaviour and Branding: Concepts Reading and Cases. Noida: Dorling Kindersley (India) Pvt. Ltd. Licenses of Pearson Education in South Asia, 2009. Gupta, S.L. and Pal Sumitra. Consumer Behaviour: An Indian Perspective. New Delhi: Sultan Chand & Sons, 2001. Datta, Debraj and Datta Mahua. Consumer Behaviour & Advertising Management. Delhi: Vrinda Publications (P) Ltd., 2009. Acknowledgements: wayofthewoo.blogspot.com;

For further details / comments : 

For further details / comments Contact: Anupam Kumar Reader, SMS Varanasi Email: anupamkr@gmail.com