CUSTOMER SATISFACTION

INTRODUCTION
Why Organizations Focus on Customer Satisfaction

Businesses monitor customer satisfaction in order to determine how to increase their customer base,
customer loyalty, revenue, profits, market share and survival. Although greater profit is the primary driver,
exemplary businesses focus on the customer and his/her experience with the organization. They work to
make their customers happy and see customer satisfaction as the key to survival and profit. Customer
satisfaction in turn hinges on the quality and effects of their experiences and the goods or services they
receive.

Customer Satisfaction

The definition of customer satisfaction has been widely debated as organizations increasingly attempt to
measure it. Customer satisfaction can be experienced in a variety of situations and connected to both goods
and services. It is a highly personal assessment that is greatly affected by customer expectations. Satisfaction
also is based on the customer’s experience of both contact with the organization (the “moment of truth” as it
is called in business literature) and personal outcomes. Some researchers define a satisfied customer within
the private sector as “one who receives significant added value” to his/her bottom line—a definition that may
apply just as well to public services. Customer satisfaction differs depending on the situation and the product
or service. A customer may be satisfied with a product or service, an experience, a purchase decision, a
salesperson, store, service provider, or an attribute or any of these. Some researchers completely avoid
“satisfaction” as a measurement objective because it is “too fuzzy an idea to serve as a meaningful
benchmark.”4 Instead, they focus on the customer’s entire experience with an organization or service contact
and the detailed assessment of that experience.

For example, reporting methods developed for health care patient surveys often ask customers to rate their
providers and experiences in response to detailed questions such as, “How well did your physicians keep you
informed?” These surveys provide “actionable” data that reveal obvious steps for improvement. Customer
satisfaction is a highly personal assessment that is greatly influenced by individual expectations’

If you don’t satisfy your customers, your business will fail.

Some definitions are based on the observation that customer satisfaction or dissatisfaction results from either
the confirmation or disconfirmation of individual expectations regarding a service or product. To avoid
difficulties stemming from the kaleidoscope of customer expectations and differences, some experts urge
companies to “concentrate on a goal that’s more closely linked to customer equity.” Instead of asking
whether customers are satisfied, they encourage companies to determine how customers hold them
accountable Customer satisfaction, a business term, is a measure of how products and services supplied by a
company meet or surpass customer expectation. It is seen as a key performance indicator within business

Customer satisfaction depends on the product’s performance relative to a buyer’s expectation, the customer is
dissatisfied. If preference matches expectations, the customer is satisfied. If preference is exceeds
expectation, the customer is highly satisfied or delighted outstanding marketing insurance companies go out
of their way to keep their customer satisfied. Satisfied customers make repeat purchases insurance products
and tell other about their good experiences with the product. The key is to match customer expectations with
company performance. Smart insurance company’s aim to delight customers by promising only what they
can deliver, then delivering more than the promise. Consumers usually face a broad array of products and
services that might satisfy a given need. How do they choose among these many marketing makers offers?
Consumers make choices based on their perception of the value and satisfaction that various products and
services deliver.

Customer value is the difference between the values the customer gains from owning and using a product and
the costs of obtaining the products customers from expectations about the value of various marketing offers
and buy accordingly. How do buyers from their expectations? Customer expectations are based on past
buying experiences, the opinion of friends and marketer and competitor information and promises.

Customer satisfaction with a purchase depends on how well the product’s performance lives up to the
customers’ expectations. Customer satisfaction is a key influence on future buying behaviour. Satisfied
customers buy again and tell others about their good experiences dies-satisfied customer’s of ten switches to
competitors and disparage the products to others.

An insurance provider open only to active duty, retired and separated military members and their immediate
families and therefore not included in the rankings, achieved a satisfaction ranking equal to that any
insurance company.

In general, customer satisfaction with auto insurance providers decreased significantly, with the 21
companies surveyed decreasing in satisfaction from the previous year. Insurance is the only carrier that did
not experience a decline in satisfaction. Though consumers report their insurance carriers are resolving their
claims and problems faster. Businesses survive because they have customers who are willing to buy their
products or services. However, many businesses fails to “check in” with their customers to determine
whether they are happy or not and what it will make to make or keep them happy

According to U.S consumers’ affairs department, it costs five times more to gain a new customer than to
retain an existing one. Other studies have repeated that with just a five percent increase in Customer
retention’s a firm can raise its profitability customers spend salary at first, but with succeeding years of good
experience, they will spend increasingly more.

Depending on the industry and the nature of the bad experience, dissatisfied customers will complain to 10 to
20 friends and acquaintances, which is three times more than those with good experiences are. Hence, the
negative information is influential, and consumers generally place significant weight on it when making a
decision. If that is not the reason enough, fierce competitor is needed more and more to differentiate firms
from one another. With technology available to virtually every one today, the traditional features and cost
advantages are no longer relevant. Still product and service quality provides an enormous opportunity to
distinguish a firm from the rest. The Japanese have recognized this and have though us to expect quality.
Today’s consumers do, and they know more about products and services than they ever did.

Customers are the best source of information. Whether to improve an existing product or service or whether
firms are planning to launch something new. There is no substitution for “getting it from horse’s mouth”
When you talk to your customer directly, to increase your odds for achieving success you “mistake-proof”
your decisions and work on what really matters. When you routinely ask the customers for feedback and
involve them in business they, in turn, become committed to the success of your business.
Why customer satisfaction is important?
1. A Loyal customer is a treasure you should keep and hide from the world
According to the White House Office of Consumer Affairs, on average, loyal customers are worth up to 10
times as much as their first purchase. Some research says that it is 6-7 times more expensive to acquire a new
customer than it is to keep a current one.

Banks or mobile providers know it best, so they don’t have any problem with going the extra mile for a
customer who is not quite satisfied and often offer him something special. Not only it is more expensive but
also much more difficult to keep existing and loyal clients (let alone keeping them fully satisfied and happy!)
than to gain some new ones.

Take this rule into account while organizing your customer service processes and do your best to look after
them.

2. They can stop being your clients in a heartbeat

Is not rocket science, nowadays clients easily switch their love brands. It is often caused by terrible customer
service. Clients waiting for ages to get feedback or comment from a brand? Unacceptable! But it still
happens.
And gaining clients’ trust takes up to 12 positive experiences to make up for one unresolved negative
experience.

“When customers share their story, they’re not just sharing pain points. They’re actually teaching you how to
make your product, service, and business better. Your customer service organization should be designed to
effectively communicate those issues.”

You can’t gain customers’ satisfaction forever, you need to look after them all the time. Try to talk to them,
instead of to them. Ask questions, offer constant support, send personalized messages or offers, use

dedicated customer satisfaction software or any other technique that will help you communicate with your
customers and collect insights.
Take care of each and every one of your clients’ need and you’ll be rewarded with their gratitude and loyalty.
Sounds like a good deal, doesn’t it? Brands often take their audience for granted, and they’ve never been so
wrong – one decision, or lack of it, can result in losing a lot of clients and their respect.

That’s why measuring clients’ satisfaction is so important.

3. It’s (all) about the money, too

It shouldn’t be surprising, but customer satisfaction is also reflected in your revenue. Customers’ opinion and
feelings about the brand can affect, in both positive and negative way, the essential metrics – such as the
number mentions and repeated transactions, and also customer lifetime value or customer churn.

Happy customers won’t look at your competitors offers – they will happily interact with your brand again,
make a purchase and recommend the product further. If you meet all of their requirements and answer their
needs while delivering the best quality of your services, they will be fully satisfied.

Not to mention your brand will increase sales revenue!

Measuring customer satisfaction should become your daily habit – not something you do from time to time
and only if you’re about to face crisis management. If you don’t know how to do it right, you can take a look
at our guide to measuring customer satisfaction to make things easier.

4. Customer satisfaction is a factor that helps you stand out of the competition
Kate Zabriskie once said that “Although your customers won’t love you if you give bad service, your
competitors will.” and we couldn’t agree more.

Your competitive rivals are just waiting for you to make a wrong move. What is more, they can often play the
role of an instigator. Being prepared for their provocations is not enough if you don’t know how to deal with
the negative backlash.

However, if you provide your customers with amazing customer service, you will gain arguments to convince
those uncertain of your services.
5. Great customer experience can take your brand places
The importance of customer satisfaction should never be neglected. You should consider it especially while
planning your marketing and positioning campaigns. Satisfied customers are more likely to share your
content across social media.

They will also more keenly interact with your posts, leaving some delightful and admirable comments. Later
you can use it as the source for case studies and success stories. Being an example of a company that
provides a ravishing customer satisfaction? Every brand should aim for it.

Customer Satisfaction Measurement: -

A basic and effective base line customer satisfaction survey program should focus on measuring customer
perceptions of how will the company delivers on the critical success factors and dimensions of the business
as defined by the customers:

For example:

• Service Promptness
• Courtesy of Staff • Responsiveness

• Understanding the customer problem, etc.

The findings of the company performance should be analyzed both with all customers and by key segments
of the customer population. The essential starting point for Customer Satisfaction Measurement (CMS) is
exploratory research. Since satisfaction is about an organization’s ability. To meet customer requirement one
has to start by clarifying with customers exactly what those requirements are. This is done through
exploratory

research using focus groups or one to one depth interviews.

Two main factors determine the accuracy of CMS. The first is the asking the right question and the second is
the asking them to the right people sample of customers which accurately reflects the customer base.
Three things decide the accuracy of a sample. They are:

• It must be representative.
• It must be randomly selected.
• It must be adequate enough.

Measuring customer satisfaction

Organizations need to retain existing customers while targeting non-customers. Measuring customer
satisfaction provides an indication of how successful the organization is at providing products and/or services
to the marketplace.

Customer satisfaction is an abstract concept and the actual manifestation of the state of satisfaction will vary
from person to person and product/service to product/service. The state of satisfaction depends on a number
of both psychological and physical variables which correlate with satisfaction behaviors such as return and
recommend rate. The level of satisfaction can also vary depending on other factors the customer, such as
other products against which the customer can compare the organization's products.

The usual measures of customer satisfaction involve a survey with a set of statements using a Linker
Technique or scale. The customer is asked to evaluate each statement in terms of their perception and
expectation of performance of the service being measured.