Customer satisfaction
Customer satisfaction is a term frequently used in marketing to evaluate customer experience. It is a measure of how products and services supplied by a company meet or surpass customer expectation. Customer satisfaction is defined as "the number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services exceeds specified satisfaction goals". Enhancing customer satisfaction and fostering customer loyalty are pivotal for businesses, given the significant importance of improving the balance between customer attitudes before and after the consumption process.
Expectancy disconfirmation theory is the most widely accepted theoretical framework for explaining customer satisfaction. However, other frameworks, such as equity theory, attribution theory, contrast theory, assimilation theory, and various others, are also used to gain insights into customer satisfaction. However, traditionally applied satisfaction surveys are influence by biases related to social desirability, availability heuristics, memory limitations, respondents' mood while answering questions, as well as affective, unconscious, and dynamic nature of customer experience.
The Marketing Accountability Standards Board endorses the definitions, purposes, and measures that appear in Marketing Metrics as part of its ongoing Common Language in Marketing Project. In a survey of nearly 200 senior marketing managers, 71 percent responded that they found a customer satisfaction metric very useful in managing and monitoring their businesses. Customer satisfaction is viewed as a key performance indicator within business and is often part of a balanced scorecard. In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a major differentiator and increasingly has become an important element of business strategy.
Purpose
Customer satisfaction operates in relation to both consumer and business usage of goods and services. Farris et al. wrote that "ustomer satisfaction provides a leading indicator of consumer purchase intentions and loyalty".The authors also wrote that "customer satisfaction data are among the most frequently collected indicators of market perceptions. Their principal use is twofold:"
- "Within organizations, the collection, analysis and dissemination of these data send a message about the importance of tending to customers and ensuring that they have a positive experience with the company's goods and services."
- "Although sales or market share can indicate how well a firm is performing currently, satisfaction is perhaps the best indicator of how likely it is that the firm’s customers will make further purchases in the future. Much research has focused on the relationship between customer satisfaction and retention. Studies indicate that the ramifications of satisfaction are most strongly realized at the extremes."
In a business context where purchasing decisions involve a number of different individuals with varying objectives and professional backgrounds, Jagdish Sheth noted that varying degrees of satisfaction with previous usage of a product or a supplier are one of the reasons why business decisions can become challenging when a consensus on a purchasing decision is required.
Theoretical ground
In the research literature, the antecedents of customer satisfaction are studied from different perspectives. These perspectives extend from the psychological to the physical as well as from the normative perspective. However, in much of the literature, research has been focused on two basic constructs, expectations prior to purchase or use of a product and customer perception of the performance of that product after using it.A customer's expectations about a product bear on how the customer thinks the product will perform. Consumers are thought to have various "types" of expectations when forming opinions about a product's anticipated performance. Miller described four types of expectations: ideal, expected, minimum tolerable, and desirable. Day underlined different types of expectations, including ones about costs, the nature of the product, benefits, and social value.
It is considered that customers judge products on a limited set of norms and attributes. Olshavsky and Miller and Olson and Dover designed their researches as to manipulate actual product performance, and their aim was to find out how perceived performance ratings were influenced by expectations. These studies took out the discussions about explaining the differences between expectations and perceived performance."
In some research studies, scholars have been able to establish that customer satisfaction has a strong emotional, i.e., affective, component. Still others show that the cognitive and affective components of customer satisfaction reciprocally influence each other over time to determine overall satisfaction.
Especially for durable goods that are consumed over time, there is value to taking a dynamic perspective on customer satisfaction. Within a dynamic perspective, customer satisfaction can evolve over time as customers repeatedly use a product or interact with a service. The satisfaction experienced with each interaction can influence the overall, cumulative satisfaction. Scholars showed that it is not just overall customer satisfaction, but also customer loyalty that evolves over time.
The disconfirmation model
"The Disconfirmation Model is based on the comparison of customers’ and their ratings. Specifically, an individual's expectations are confirmed when a product performs as expected. It is negatively confirmed when a product performs more poorly than expected. The disconfirmation is positive when a product performs over the expectations.There are four constructs to describe the traditional disconfirmation paradigm mentioned as expectations, performance, disconfirmation and satisfaction."
"Satisfaction is considered as an outcome of purchase and use, resulting from the buyers’ comparison of expected rewards and incurred costs of the purchase in relation to the anticipated consequences. In operation, satisfaction is somehow similar to attitude as it can be evaluated as the sum of satisfactions with some features of a product."
"In the literature, cognitive and affective models of satisfaction are also developed and considered as alternatives.
Churchill and Suprenant in 1982, evaluated various studies in the literature and formed an overview of Disconfirmation process in the following figure:"
Construction
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 or services to the marketplace."Customer satisfaction is measured at the individual level, but it is almost always reported at an aggregate level. It can be, and often is, measured along various dimensions. A hotel, for example, might ask customers to rate their experience with its front desk and check-in service, with the room, with the amenities in the room, with the restaurants, and so on. Additionally, in a holistic sense, the hotel might ask about overall satisfaction 'with your stay.'"
As research on consumption experiences grows, evidence suggests that consumers purchase goods and services for a combination of two types of benefits: hedonic and utilitarian. Hedonic benefits are associated with the sensory and experiential attributes of the product. Utilitarian benefits of a product are associated with the more instrumental and functional attributes of the product.
Customer satisfaction is an ambiguous and 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 options the customer may have and other products against which the customer can compare the organization's products.
Work done by Parasuraman, Zeithaml and Berry between 1985 and 1988 provides the basis for the measurement of customer satisfaction with a service by using the gap between the customer's expectation of performance and their perceived experience of performance. This provides the measurer with a satisfaction "gap" which is objective and quantitative in nature. Work done by Cronin and Taylor propose the "confirmation/disconfirmation" theory of combining the "gap" described by Parasuraman, Zeithaml and Berry as two different measures into a single measurement of performance according to expectation.
The usual measures of customer satisfaction involve a survey using a Likert scale. The customer is asked to evaluate each statement in terms of their perceptions and expectations of performance of the organization being measured.
Good quality measures need to have high satisfaction loading, good reliability, and low error variances. In an empirical study comparing commonly used satisfaction measures it was found that two multi-item semantic differential scales performed best across both hedonic and utilitarian service consumption contexts. A study by Wirtz & Lee, found that a six-item 7-point semantic differential scale, which is a six-item 7-point bipolar scale, consistently performed best across both hedonic and utilitarian services. It loaded most highly on satisfaction, had the highest item reliability, and had by far the lowest error variance across both studies. In the study, the six items asked respondents’ evaluation of their most recent experience with ATM services and ice cream restaurant, along seven points within these six items: “pleased me to displeased me”, “contented with to disgusted with”, “very satisfied with to very dissatisfied with”, “did a good job for me to did a poor job for me”, “wise choice to poor choice” and “happy with to unhappy with”. A semantic differential scale, which is a four-item 7-point bipolar scale, was the second best performing measure, which was again consistent across both contexts. In the study, respondents were asked to evaluate their experience with both products, along seven points within these four items: “satisfied to dissatisfied”, “favorable to unfavorable”, “pleasant to unpleasant” and “I like it very much to I didn’t like it at all”. The third best scale was single-item percentage measure, a one-item 7-point bipolar scale. Again, the respondents were asked to evaluate their experience on both ATM services and ice cream restaurants, along seven points within “delighted to terrible”.
Finally, all measures captured both affective and cognitive aspects of satisfaction, independent of their scale anchors. Affective measures capture a consumer's attitude towards a product, which can result from any product information or experience. On the other hand, cognitive element is defined as an appraisal or conclusion on how the product's performance compared against expectations, was useful, fit the situation, exceeded the requirements of the situation.
Recent research shows that in most commercial applications, such as firms conducting customer surveys, a single-item overall satisfaction scale performs just as well as a multi-item scale. Especially in larger scale studies where a researcher needs to gather data from a large number of customers, a single-item scale may be preferred because it can reduce total survey error. An interesting recent finding from re-interviewing the same clients of a firm is that only 50% of respondents give the same satisfaction rating when re-interviewed, even when there has been no service encounter between the client and firm between surveys. The study found a 'regression to the mean' effect in customer satisfaction responses, whereby the respondent group who gave unduly low scores in the first survey regressed up toward the mean level in the second, while the group who gave unduly high scores tended to regress downward toward the overall mean level in the second survey.