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. Customer’s 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 customer’s loyalty is one of the important tool or way for the company’s
brand awareness and it is the cheapest way. For big companies are expending much money for
brand awareness, excellent customer’s service that will lead to their loyalty is a big factor for
their business.

Objective of study:

 To understand the effect of customer satisfaction on sales generated by the organization.

 To understand the difference between customer satisfaction and customer delight.
 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:.......................................................................................................................................8
Difference between Customer Satisfaction and Customer Delight:.............................................................8
Why Delighting Customer?.........................................................................................................................8
How to keep customer delight?...................................................................................................................9
Importance of customer delight:..................................................................................................................9
Customer delight curve:..............................................................................................................................9
Beneficial for the management:.................................................................................................................10
Beneficial for the company:.......................................................................................................................10
Customer Loyalty:.....................................................................................................................................10
Loyalty Attitudes:......................................................................................................................................11
Value of Greater Customer Loyalty:..........................................................................................................11
Moving Customers beyond Customer Satisfaction to Loyalty:..................................................................12
Overcoming Common Selling Problems & Key Points To Get The Customers Satisfied:........................13
Case study: HCL Infosystems ltd Hyderabad............................................................................................15
Conclusion:...............................................................................................................................................18
Bibliography:.............................................................................................................................................19

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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
organization’s 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 customer’s 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/service
consistently 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.

Customer Satisfaction:

Many researchers have looked into the importance of customer satisfaction. Kotler (2000)
defined satisfaction as: “a person’s feeling of pleasure or disappointment resulting from
comparing a product’s perceived performance (or outcome) in relation to his or her

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expectations”. In terms of value, the difference between the bundle of benefits a customer gets
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 customer’s
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:

 Friendly employees
 Helpful and courteous employees
 Quick service
 Billing clarity
 Accuracy of billing
 Good value

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  Service quality
 Competitive pricing
 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: it’s 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:

 Focus on key customers

 Proactively generate high level of customer satisfaction with every interaction
 Anticipate customer needs and respond to them before the competition does
 Build closer ties with customers
 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

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

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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.

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.

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Customer delight curve:

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.

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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
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

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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 B’s market share and lowers Brand A’s 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
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; it’s just the result. It’s 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

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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.
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 Customers
Satisfied:

 Selling is the management of buying

1. It requires high professionalism, lot of hard work, self-discipline
2. It should focus on buying actions, not selling actions
 Focus on being a professional…. Amateurs hope, but professionals work.
1. They always try to improve
2. It could be more better
3. Study your product and the competitive product. gather all the information
4. Set goals and make plans to achieve them

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 5. Practice till perfect and always try to improve.
 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 Customer’s 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.
 Understand the disinterest and then probe for needs.
1. Analyze the customers situation & point of view
2. Ask good questions
3. 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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 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)
 Accept that customer knows best.
1. Customers feel that all the products are same
2. 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 don’t need to be a great marketer)
 Become an expert on the features & benefits of your product.
1. When the customer says “I don’t need your product”, it is not the end of selling
process, it is the beginning.
 If you don’t sell, it’s not the product that’s wrong, it’s you.
 Customers never buy a product, but buy a bundle of benefits that have to do with utility,
value and service, and it’s the salespersons’ job to make sure the customer is never
disappointed.
 Selling consists of transferring a conviction by a seller to a buyer.
 What really drives re-purchase is high quality customer service.
1. If he is treated badly, he will never buy your product.
 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 it’s 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 country’s 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 India’s 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 one
loyal 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 of
satisfied 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:

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

 One satisfied customer generates leads for organization by word of mouth publicity. It
helps in better sales for organization and brand building.

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

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

 The company should listen to what the customer says, should take the feedback and
modify the product according to the customer specifications.

Conclusion:

 Everyone who purchases a product or a service does so with certain expectations about
what 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.
 Today, more than ever before, retaining customers and gaining their loyalty are the keys
to 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.
 Relationship marketing seems to be vogue. The new, increasingly efficient ways that
companies 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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Bibliography:

 “Why the customers don’t want what you want them to do”
 “Delivering and Designing Superior Customer Value – Concepts, Cases and Applications”
by Art Weinstein and William C. Johnson, CRC Press 1999, USA
 “An Overview of Customer Satisfaction and Loyalty” by Joe Jennings, Vice President, ICR
Survey, Pennsylvania, USA
 “Get Inside the Lives of Your Customers” by Patricia B. Seybold, Harvard Business
Review, May 2001

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