Unit 4 Customer Satisfaction

UNIT 4: CUSTOMER SATISFACTION

Overview

• Focus on Customer Satisfaction within the context of business management.

• Instructor: Dr. Renuka Vidyashankar, Assistant Professor, Faculty of Management Sciences, Sri Ramachandra Institute of Higher Education and Research.

Learning Outcomes

• After completing the lessons, students should be able to explain:

  • Customer Satisfaction

  • Types of Customers

  • Customer Perception of Quality

  • Factors Influencing Customer Perception of Quality

  • Identifying Customer Needs

  • Customer Complaints and Feedback

  • Customer Retention

  • Patient Satisfaction

  • Survey Questionnaire Design

Importance of Customer Satisfaction

• Customer satisfaction is essential for a successful business.

• It starts and ends with meeting customer needs and expectations.

• Improving internal customer satisfaction enhances the overall efficiency of the production process and service delivery, leading to greater satisfaction among external customers.

Customer Types

1. Potential Customers:

   • Individuals likely to purchase products or services, e.g., someone looking for an apartment.

   • Opportunity for the business to convert them into actual customers.

2. Loyal Customers:

   • Repeat purchasers despite minor changes in price or quality, e.g., frequent flyers loyal to an airline.

3. New Customers:

   • First-time buyers, may switch from competitors or newly entered markets.

   • Their acquisition may involve launching new products or competitive offerings.

4. Discount Customers:

   • Purchase only when discounts are available. They are more likely to switch brands based on price.

5. Former Customers:

   • Previously bought from a business but have switched to a competitor.

   • They may still be considered potential customers.

6. Internal Customers:

   • Individuals within the organization (employees, shareholders) who contribute to customer service.

7. External Customers:

   • Consumers or businesses who buy the products/services offered by the organization.

8. Intermediate Customers:

   • Purchase goods for resale, such as retailers who are part of a supply chain.

KANO Model of Customer Requirements

• Developed by Noriaki Kano, it classifies customer preferences into three categories:

  • Must-Be Requirements: Basic expectations that are taken for granted, e.g., safety in airlines, cleanliness in hotels.

  • Performance Requirements: Features customers discuss and negotiate, such as flight schedules.

  • Excitement Requirements: Unexpected features that delight customers, e.g., in-flight fashion shows.

• The fulfillment impacts customer satisfaction differently across these categories.

Factors Influencing Customer Perception of Quality

1. Performance: Fitness for use, reliability, and availability.

2. Features: Secondary characteristics of a product or service, e.g., phone functionalities.

3. Customer Service: Added value which includes any assistance provided to enhance customer experience.

4. Warranty: A public commitment to product/service quality that also generates customer feedback.

5. Price: Customers constantly evaluate whether the price matches the value of service or product offered.

6. Reputation: Associated with trust, where customers prefer known brands based on past experiences.

Customer Retention

• The importance of retaining customers is highlighted:

  • It is five times cheaper to retain an existing customer than to acquire a new one.

  • Existing customers are more likely to buy new products and tend to spend more over time.

Customer Feedback Collection Tools

1. Comment Cards: Attached to products during sales.

2. Customer Questionnaires: Surveys via mail or online.

3. Focus Groups: Direct discussions with selected customers.

4. Toll-free Numbers: Facilitates feedback collection.

5. Customer Visits: Direct feedback from customer interactions.

6. Social Media: Includes feedback from diverse online platforms.

Customer Complaint Process

• Flowchart detailing the process:

  1. Collect complaints from various sources.

  2. Record using specific forms (CC&F) and address promptly.

  3. Analyze and resolve complaints effectively.

  4. Ensure data review for continuous improvement.

Developing a Successful Customer Service System

1. Management commitment to customer service.

2. Understand customer preferences and dislikes.

3. Set quality standards for service.

4. Train staff appropriately and reward performance.

5. Maintain regular communication with customers.

6. Focus on continuous improvement of service quality.

Patient Satisfaction

• Emphasizes the importance of feedback in healthcare settings.

• Creates a structured approach to measure and enhance patient experience through satisfaction surveys.

Elements of Customer Service

• According to Jacques Horovitz and Chan Cudennec-Poon, key elements include:

  • Organization

  • Customer Care

  • Effective Communication

  • Front Line Staff Selection and Training

  • Leadership and Continuous Improvement Strategies

Ladder of Loyalty

• Stages include:

  1. Suspect

  2. Prospect

  3. Buyer

  4. Customer

  5. Frequent Customer

  6. Loyal Customer

  7. Advocate

  8. Partner

• Each stage represents a deeper relationship and loyalty, impacting marketing strategies.