Methods of Measuring Customer Satisfaction

Managing customers’ satisfaction efficiently is one the biggest challenge an organization face. The tools or
methods to measure customer satisfaction needs to be defined sophisticatedly to fulfill the desired norms. There
are following methods to measure customer satisfaction:

1. Direct Methods: Directly contacting customers and getting their valuable feedback is very important.
Following are some of the ways by which customers could be directly tabbed:
a. Getting customer feedback through third party agencies.
b. Direct marketing, in-house call centers, complaint handling department could be treated as first
point of contact for getting customer feedback. These feedbacks are compiled to analyze
customers’ perception.
c. Getting customer feedback through face to face conversation or meeting.
d. Feedback through complaint or appreciation letter.
e. Direct customer feedback through surveys and questionnaires.
Organizations mostly employ external agencies to listen to their customers and provide dedicated
feedback to them. These feedbacks needs to be sophisticated and in structured format so that conclusive
results could be fetched out. Face to face meetings and complaint or appreciation letter engages
immediate issues. The feedback received in this is not uniformed as different types of customers are
addressed with different domains of questions. This hiders the analysis process to be performed
accurately and consistently. Hence the best way is to implement a proper survey which consists of
uniformed questionnaire to get customer feedback from well segmented customers. The design of the
prepared questionnaire is an important aspect and should enclose all the essential factors of business.
The questions asked should be in a way that the customer is encouraged to respond in a obvious way/.
These feedback could received by the organizations can be treated as one of the best way to measure
customer satisfaction.
Apart from the above methods there is another very popular direct method which is surprise market
visit. By this, information regarding different segment of products and services provided to the
customers could be obtained in an efficient manner. It becomes easy for the supplier to know the weak
and strong aspects of products and services.

2. Indirect Method: The major drawback of direct methods is that it turns out to be very costly and
requires a lot of pre compiled preparations to implement. For getting the valuable feedbacks the supplier
totally depends on the customer due to which they looses options and chances to take corrective measure
at correct time. Hence there are other following indirect methods of getting feedback regarding customer
satisfaction:
a. Customer Complaints: Customer’s complaints are the issues and problems reported by the
customer to supplier with regards to any specific product or related service. These complaints
can be classified under different segments according to the severity and department. If the
complaints under a particular segment go high in a specific period of time then the performance
of the organization is degrading in that specific area or segment. But if the complaints diminish
in a specific period of time then that means the organization is performing well and customer
satisfaction level is also higher.
b. Customer Loyalty: It is necessarily required for an organization to interact and communicate
with customers on a regular basis to increase customer loyalty. In these interactions and
communications it is required to learn and determine all individual customer needs and respond
accordingly. A customer is said to be loyal if he revisits supplier on regular basis for purchases.
These loyal customers are the satisfied ones and hence they are bounded with a relationship with
the supplier. Hence by obtaining the customer loyalty index, suppliers can indirectly measure
customer satisfaction.
Repeat Purchase
Repeat Purchase also known as Repurchase or Replacement Sale is when consumer purchases the same brand
that replaces the previous purchase which is already consumer. Brand loyalty can be measured through repeat
purchase of the brand.
For Example-
If a customer is happy and satisfied with a particular hair shampoo and make repeat purchases of the same
brand shampoo after consuming the previous one. It is said to be repeat purchase and consumer is said to be
loyal consumer.
In order to increase repeat purchase there is need to pay more attention to customers than competition then only
repeat purchases can be garnered. Either as salesperson or a corporate, repeat sales are necessary to make
profits. Statistics have shown that it costs more to attract new customers than to retain existing customers
because of high costs of advertising and promotions.

Market Researchers take repeat purchases into account to evaluate the business. Infact repeat purchases are the
most profitable way to increase revenue of E-Commerce stores. Studies have shown that best online stores get
almost 50% of the sales from returning customers.
Existing customers is the most easily approachable segment to target through marketing campaigns and
promotions. It is easy to contact the existing customers because of the contact information and a connection that
has been made due to earlier purchases. Those existing customers feel positive engagement with the brand and
tend to respond more effectively to marketing campaigns and make repurchase decisions.

Brand Loyalty
Brand loyalty is the positive association consumers attach to a particular product or brand. Customers that
exhibit brand loyalty are devoted to a product or service, which is demonstrated by their repeat purchases
despite competitor's efforts to lure them away. Corporations invest significant amounts of money on customer
service and marketing to create and maintain brand loyalty for an established product. Coca-Cola Company is
an example of an iconic brand that has resulted in customers demonstrating brand loyalty over the years despite
Pepsi's products and marketing efforts.

KEY TAKEAWAYS

 Brand loyalty is demonstrated by repeat purchases of a product even when the consumer has choices of
competing alternatives.
 Marketing campaigns are designed to nurture brand loyalty.
 Brand loyalty can evaporate when consumer trends change, but the product doesn't.

How Brand Loyalty Works

Loyal customers are the ones who will purchase the same brand regardless of convenience or price. These loyal
customers have found a product that meets their needs, and they're not interested in experimenting with another
brand.
Most established brand name products exist in a highly competitive market overwhelmed with new and old
competing products, many of them barely distinguishable. As a result, companies employ many tactics to create
and maintain brand loyalty. They spend their advertising budgets on messages targeted at the segment of the
market that includes their loyal customers and like-minded people who could become loyal customers.
Opinion Leadership
Opinion Leadership is the process by which the opinion leader informally influences the actions or attitudes of
others, who may be opinion seekers or merely opinion recipients. Opinion receivers perceive the opinion leader
as a highly credible, objective source of product information who can help reduce their search and analysis time
and percieved risk.
Opinion leaders are motivated to give information or advice to others, in part doing so enhances their own status
and self image and because such advice tends to reduce any post purchase dissonance that they
may have.Other motives include product involvement, message involvement or any other involvement.
Market researchers identify opinion leaders by such methods as self designation, key informants, the
sociometric method and the objective method.
Studies of opinion leadership indicate that this phenomenon tends to be product category specific, generally one
of their interest. An opinion leader of one product range can be an opinion receiver for another product
category.

Customer complaint behavior

Customers are often uncomfortable making direct complaints. If a customer is dissatisfied with your business,
they will often complain to others - colleagues, family, friends and your business competitors - before they
complain to you.

Understanding customer complaint behaviour, including how and why they complain, can help you minimise
negative perceptions about your business.

Diffusion Of Innovations Theory

Diffusion of innovations theory is a hypothesis outlining how new technological and other advancements spread
throughout societies and cultures, from introduction to wider-adoption. The diffusion of innovations theory
seeks to explain how and why new ideas and practices are adopted, with timelines potentially spread out over
long periods.
The way in which innovations are communicated to different parts of society and the subjective opinions
associated with the innovations are important factors in how quickly diffusion—or spreading—occurs. This is
important to understand when developing market share.

Understanding Diffusion Of Innovations Theory

The theory was developed by E.M. Rogers, a communication theorist at the University of New Mexico, in 1962.
It explains the passage of an idea through stages of adoption by different actors. The main people in the
diffusion of innovations theory are:

 Innovators: People who are open to risks and the first to try new ideas.
 Early adopters: People who are interested in trying new technologies and establishing their utility in
society.
 Early majority: The early majority paves the way for use of an innovation within mainstream society
and are part of the general population.
 Late majority: The late majority is also part of the general population and refers to the set of people
who follow the early majority into adopting an innovation as part of their daily life.
 Laggards: As the name indicates, laggards lag the general population in adopting innovative products
and new ideas. This is primarily because they are risk-averse and set in their ways of doing things. But
the sweep of an innovation through mainstream society makes it impossible for them to conduct their
daily life (and work) without it. As a result, they are forced to begin using it.
Factors that affect the rate of innovation diffusion include the mix of rural to urban population within a society,
the society's level of education, and the extent of industrialization and development. Different societies are
likely to have different adoption rates. An adoption rate is the rate at which members of a society accept a new
innovation. Adoption rates for different types of innovation vary. For example, a society may have adopted the
internet faster than it adopted the automobile due to cost, accessibility and familiarity with technological change

Consumer Adoption Process

The Consumer Adoption Process is a 5 step mental process by which all the customers/ consumer go through
while adopting a product from learning about a new product to becoming a happy loyal user of that product or
to decline/reject the product completely. The process of a consumer of moving from a cognitive state toward the
emotional state and finally reaching towards the behavioral or conative state is another way to explain
Consumer Adoption Process.

1. Cognitive State can be defined as being informed and aware of the product existence.
2. Emotional State can be defined as the Likes/dislikes and preferences of the customer.
3. Behavioral or conative state can be defined as taking the decision of purchase.

The Stages of Consumer Adoption Process

Consumer Adoption Process is a constant marketing tool, which has different stages to get itself completed.
These stages of the Consumer Adoption Process are discussed as under:
1. Product Awareness:
2. Product Interest:
3. Evaluation:
4. Trial:
5. Adoption/Rejection:

Product Awareness:
Introducing a product in the market and creating awareness for that product is the first stage of the Consumer
Adoption process. Companies invest a lot in creating avenue for informing the consumer and customer.
Creating Product or Brand Awareness is very important for the success of the entire business.

Making customer aware of the existence of the product ensure the entire existence of the company. The
companies use many advertising techniques and marketing materials like teasers, videos, banners and images.
The companies use many interesting ways to engage the consumers in this phase of product marketing. Creating
a strong attractive presence for the newly launched product can attract more customers.

In this era of internet marketing, online shopping and social media advertising the marketers have many
advertising tools are available to create awareness about the product in the customers. The Companies deploy
smart tactics to launch a product in the market to avoid the advertisement clutter.
Product Interest:
During this phase of adoption process the consumer becomes more aware and informed about the product itself,
the value the product deliver, its unique feature and the manufacturer of the product. Creating and maintaining
the interest of the customer is very necessary for the companies. This is why the marketers use those
promotional channels which are easily accessible to the targeted market.

Product Evaluation:
The process of consumer examination, comparison and evaluation of the product before making a purchase
decision comprises of Stage 3 in the Adoption Process. The Consumer behavior varies in intensity according to
the need, the price of the product, features of the product and the value that the product delivers.

The consumers search for information about the product options and the brand available in the market. Online
surfing to learn about the new brand in the market is very common now days. The Customer utilizes social
media channels, online shopping sites and other media channels to learn and explore about the products. The
consumer use recommendations, online reviews, and suggestions from online groups before making purchase
decisions.

In this phase the consumer verifies the pro and cons of the product, the substitutes available in the market and
the value for money.
The consumer outlines the unique selling proposition, identifies what your product offers against other
competing products.
Utilizing the marketing strategies provides the companies with a platform that allows the businesses to
communicate to the existing and potential customers and advertise the unique feature of the product.

Product Trial:
In this phase of the Consumer Adoption Process the consumer use the product on trial basis. Trying out the
actual product gives the consumer the idea of the product and its benefits. The trail is the most important stage
as the entire product acceptance and rejection depends upon the trail phase. The company can provides free
sample and trail products as part of the marketing campaign. Free sampling is very important as this will the
consumer expectations about the product.

Product Adoption:
The consumer is ready to adopt the product which means that he is ready to actually spend the money on the
product. The Adoption phase is the most critical stage in the whole process as the companies needs the
consumers to accept the product and complete adopt it. The company needs to ensure availability, quality, ease
and accessibility of the product to the consumer.

Factors Affecting Consumer Adoption Process

Some important factors influencing the consumer adoption process are as bellow:
 Readiness of the Consumer/Customer to try new products and switch to the new brands
 New product or Innovation
 Personal Choices and influences about the Purchase Decisions
 Varying Rates of Product Adoption
 Readiness of the organization to launch new products