Defining Customer Satisfaction free essay sample

Defining customer satisfaction Because the concept of customer satisfaction is new to many companies, its important to be clear on exactly whats meant by the term. Customer satisfaction is the state of mind that customers have about a company when their expectations have been met or exceeded over the lifetime of the product or service. The achievement of customer satisfaction leads to company loyalty and product repurchase. There are some important implications of this definition:    Because customer satisfaction is a subjective, nonquantitative state, measurement wont be exact and will require sampling and statistical analysis. Customer satisfaction measurement must be undertaken with an understanding of the gap between customer expectations and attribute performance perceptions. There should be some connection between customer satisfaction measurement and bottom-line results. Satisfaction itself can refer to a number of different facts of the relationship with a customer. For example, it can refer to any or all of the following:    Satisfaction with the quality of a particular product or service    Satisfaction with an ongoing business relationship Satisfaction with the price-performance ratio of a product or service    Satisfaction because a product/service met or exceeded the customers expectations Each industry could add to this list according to the nature of the business and the specific relationship with the customer. Customer satisfaction measurement variables will differ depending on what type of satisfaction is being researched. For example, manufacturers typically desire on-time delivery and adherence to specifications, so measures of satisfaction taken by suppliers should include these critical variables. Clearly defining and understanding customer satisfaction can help any company identify opportunities for product and service innovation and serve as the basis for performance appraisal and reward systems. It can also serve as the basis for a customer satisfaction surveying program that can ensure that quality improvement efforts are properly focused on issues that are most important to the customer. Break-down of the Definition of Customer Satisfaction Customer satisfaction is a measure of how well our†¦ PRODUCTS- Products including physical products and services. SERVICE- Customer service post sale. This includes responding to customer queries and issues. SUPPORT- Repair, maintenance and upkeep of your products post sales. ENGAGEMENET- Engaging with customer, apart from the above mentioned contexts (product, service and support). This includes offering new products, schemes, up-sell and cross-sell. †¦are able to meet the customer†¦ EXPECTATIONS- Customer satisfaction is your delivery vis-a-vis the expectations. The way a customer interprets your delivery also defines customer satisfaction. Customer satisfaction is driven by how well you manage your delivery and how well you manage customer expectations. Purpose of customer Satisfaction: A business ideally is continually seeking feedback to improve customer satisfaction. Customer satisfaction provides a leading indicator of consumer purchase intentions and loyalty. Customer satisfaction data are among the most frequently collected indicators of market perceptions. Their principal use is twofold: 1. 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 2. Although sales or market share can indicate how well a firm is performing currently, satisfaction is an 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. On a five-point scale, individuals who rate their satisfaction level as â€Å"5† are likely to become return customers and might even evangelize for the firm. A second important metric related to satisfaction is willingness to recommend. This metric is defined as The percentage of surveyed customers who indicate that they would recommend a brand to friends. When a customer is satisfied with a product, he or she might recommend it to friends, relatives and colleagues. This can be a powerful marketing advantage. ) Individuals who rate their satisfaction level as â€Å"1,† by co ntrast, are unlikely to return. Further, they can hurt the firm by making negative comments about it to prospective customers. Willingness to recommend is a key metric relating to customer satisfaction. Factors affecting customer satisfaction Customer satisfaction is the overall impression of customer about the supplier and the products and services delivered by the supplier. Following are the important factors that could affect customer satisfaction: * Department wise capability of the supplier. * Technological and engineering or re-engineering aspects of products and services. * Type and quality of response provided by the supplier. Supplier’s capability to commit on deadlines and how efficiently they are met. * Customer service provided by the supplier. * Complaint management. * Cost, quality, performance and efficiency of the product. * Supplier’s personal facets like etiquettes and friendliness. * Supplier’s ability to manage whole customer life cycle. * Compatible and hassle free functions and operations. | | The above factors could be widely classified under two categories i. e. s uppliers behavior and performance of product and services. The supplier’s behavior mostly depends on the behavior of its senior subordinates, managers and internal employees. All the functional activities like customer response, direct product and maintenance services, complaint management etc. are the factors that rely on how skillful and trained the internal and human resources of the supplier are. The second category is regarding all the products and services. This depends on the capability of supplier to how to nurture the products and service efficiently and how skilled the employees are. It’s all about how the skills are implemented to demonstrate engineering, re-engineering and technological aspects of the products and services. The quality and efficaciousness of the products is also an important factor that enables compatible and hassle free functions and operations. This bears to lower maintenance and higher life of the product which is highly admired by the customers. If the product is having some problem or compatibility issues and requires frequent maintenance and support than the customers could get irritated and possibilities of sudden ivert is there which lead to supplier’s financial loss. In the same way if the product is expecting huge amount of financial and manual resources then customers could get a feeling of dissatisfaction and worry. However, if these aspects are handled efficiently by giving class services and dealing with complaints effectively then dissatisfied customers could be converted into long time satisfied customers and retai ning them becomes easy. It is practically impossible for the supplier to provide all the above explained features. There are always some positive as well as negative features in products and services which could lead to delight or irritate customers. The final opinion is the sum of overall experiences which a customer percept. But it is also true that more the positive aspects, the more the customer is satisfied. Hence the aim of the supplier should be always to enhance these positive feelings among all the customers to increase customer satisfaction. The supplier must identify how to enhance these positive aspects to maximum level by analyzing the customer’s data and information using CRM system. The individual liking and disliking of customers differ from customer to customer. It is hence required to target a customer and identify individual requirement to make them satisfied. Having discussed the above factors that affect customer satisfaction we can say that higher the satisfaction level, higher is the sentimental attachment of customers with the specific brand of product and also with the supplier. This helps in making a strong and healthy customer-supplier bonding. This bonding forces the customer to be tied up with that particular supplier and chances of defection are very less. Hence customer satisfaction is very important panorama that every supplier should focus on to establish a renounced position in the global market and enhance business and profit. According to Adrian Thompson Customer Satisfaction in 7 Steps 1. Encourage Face-to-Face Dealings This is the most daunting and downright scary part of interacting with a customer. If one does not used to this sort of thing it can be a pretty nerve-wracking experience. Rest assured, though, it does get easier over time. It’s important to meet customers face to face at least once or even twice during the course of a project. According to Adrian experience has shown that a client finds it easier to relate to and work with someone they’ve actually met in person, rather than a voice on the phone or someone typing into an email or messenger program. When you do meet them, be calm, confident and above all, take time to ask them what they need. I believe that if a potential client spends over half the meeting doing the talking, you’re well on your way to a sale. 2. Respond to Messages Promptly Keep Your Clients Informed This goes without saying really. We all know how annoying it is to wait days for a response to an email or phone call. It might not always be practical to deal with all customers’ queries within the space of a few hours, but at least email or call them back and let them know you’ve received their message and you’ll contact them about it as soon as possible. Even if you’re not able to solve a problem right away, let the customer know you’re working on it. .3. Be Friendly and Approachable It’s very important to be friendly, courteous and to make your clients feel like you’re their friend and you’re there to help them out. There will be times when you want to beat your clients over the head repeatedly with a blunt object – it happens to all of us. It’s vital that you keep a clear head, respond to your clients’ wishes as best you can, and at all times remain polite and courteous. 4. Have a Clearly-Defined Customer Service Policy This may not be too important when you’re just starting out, but a clearly defined customer service policy is going to save you a lot of time and effort in the long run. If a customer has a problem, what should they do? If the first option doesn’t work, then what? Should they contact different people for billing and technical enquiries? If they’re not satisfied with any aspect of your customer service, who should they tell? There’s nothing more annoying for a client than being passed from person to person, or not knowing who to turn to. Making sure they know exactly what to do at each stage of their enquiry should be of utmost importance. So make sure your customer service policy is present on your site — and anywhere else it may be useful. 5. Attention to Detail (also known as ‘The Little Niceties’) Have you ever received a Happy Birthday email or card from a company you were a client of? Have you ever had a personalized sign-up confirmation email for a service that you could tell was typed from scratch? These little niceties can be time consuming and aren’t always cost effective, but remember to do them. Even if it’s as small as sending a Happy Holidays email to all your customers, it’s something. It shows you care; it shows there are real people on the other end of that screen or telephone; and most importantly, it makes the customer feel welcomed, wanted and valued. 6. Anticipate Your Client’s Needs Go Out Of Your Way to Help Them Out Sometimes this is easier said than done! However, achieving this supreme level of understanding with your clients will do wonders for your working relationship. 7. Honour Your Promises It’s possible this is the most important point in this article. The simple message: when you promise something, deliver. The most common example here is project delivery dates. Clients don’t like to be disappointed. Sometimes, something may not get done, or you might miss a deadline through no fault of your own. Projects can be late, technology can fail and sub-contractors don’t always deliver on time.