Customer satisfaction: Kotler on marketing Share this article: Post on twitter: Most companies pay more attention to their

market share than to their customers’ s atisfaction. This is a mistake. Market share is a backward-looking metric; custo mer satisfaction is a forward-looking metric. If customer satisfaction starts sl ipping, then market share erosion will soon follow. Companies need to monitor and improve the level of customer satisfaction. The hi gher the customer satisfaction, the higher the retention. Here are four facts: 1. Acquiring new customers can cost 5 to 10 times more than the costs invol ved in satisfying and retaining current customers. 2. The average company loses between 10 and 30% of its customers each year. 3. A 5% reduction in the customer defection rate can increase profits by 25 to 85%, depending on the industry. 4. The customer profit rate tends to increase over the life of the retained customer.1 One company bragged that 80% of its customers are satisfied or highly satisfied. This sounded pretty good until it learned that its leading competitor attained a 90% customer satisfaction score. The company was further dismayed to learn tha t this competitor was aiming for a 95% satisfaction score. Companies that achieve a high satisfaction score should advertise it. J. D. Powe rs gave the Honda Accord the number one rating in customer satisfaction for seve ral years, and this helped sell more Accords. Dell achieved the highest satisfac tion ratings for its computer service and advertised this in its ads, giving pro spects confidence that they could trust ordering a computer sight unseen from De ll. The importance of aiming for high customer satisfaction is underscored in compan y ads. Honda says: “One reason our customers are so satisfied is that we aren’t.” Cign a advertises, “We’ll never be 100% satisfied until you are, too.” But don’t make too big a claim. Holiday Inns ran a campaign a few years ago that promised“No Surprises.” G uest complaints were so high that the slogan“No Surprises” was mocked, and Holiday I nn quickly canceled this slogan. Customer satisfaction is a necessary but not sufficient goal. Customer satisfact ion only weakly predicts customer retention in highly competitive markets. Compa nies regularly lose some percentage of their satisfied customers. Companies need to focus on customer retention. But even retention can be misleading, as when i t is based on habit or an absence of alternative suppliers. A company needs to a im for a high level of customer loyalty or commitment. Loyal packaged-goods cust omers, for example, generally pay seven to 10% more than non-loyal customers. The company should therefore aim to delight customers, not simply satisfy them. Top companies aim to exceed customer expectations and leave a smile on customers’ faces. But if they succeed, this becomes the norm. How can a company continue to exceed expectations after these expectations become very high? How many more su rprises and delights can a company create? Interesting question! Six universal drivers to assure customer satisfaction A study in the summer of 2006 revealed (again!) that consumers rated customer se rvice as the number one influence for their loyalty to a company. So what does i t take to give your consumers an excellent customer service experience? One key factor is CONSISTENCY. You need to be consistent across all of your comp any s touch points, and especially so in the way you deliver services or product s to your customers. A great customer experience sets the foundation for the cre ation of customer loyalty; this in turn leads to greater profitability. Here, we will learn more about the four universal drivers which lead to lasting customer service experiences, plus two more factors that can heighten such exper


iences for your customers. 1. Promptness / responsiveness One survey showed that the two leading complaints of customers were difficulty i n reaching live agents (72%), and being made to wait too long (69%). The survey also showed that half of the people asked said that their calls failed to answer their questions. So, the questions you should ask yourself are: "Can my custom ers easily reach me?" "Am I listening to them & responding promptly?" It makes no sense talking about good consumer experience, when the customers are already annoyed before getting through to an agent. Often these are due to ext ensive IVR-menus or other non-value-creating difficulties that a customer has to go through to contact you. Make access to customer service as easy as 1-2-3. Listen to your customers. Honestly evaluate what they have to say, and you will learn something that benefits your business. 2. Personal attention / empathy Do you have a "we care" attitude? If you do not, then there is much work to be done. Employees need to realize their key role in bringing in, and keeping, the customer. The "we care" attitude could come in the form of a friendlier voice intonation, a non-scripted probing to understand the concern better, or a sincer e willingness to respond to the concern. Our data for the financial services in dustry shows that the personal attention, in the form of friendliness and empath y, is the factor that weighs the most in the overall satisfaction score. {sideb ar} 3. Employee competence Are your employees trained to meet customer expectations? Do you have the proces ses laid out, and do your employees know what the company expects from them? Eve ry connection with a customer is a moment of truth. If the agent s dialogue with the customer is unsatisfying, you have not only lost the opportunity of turning the customer in to an external agent for your company, but also most likely red uced the value of your brand. If you are committed to delivering exceptional cu stomer experience, assure that the first point of contact provides extreme custo mer satisfaction. 4. Dependability / Reliability Do you keep your promises? Exaggerated claims lead to customer dissatisfaction. Set your product or service performance standards high enough to attract busines s; but be realistic enough to deliver or exceed them 100 percent of the time. Cu stomers will be more satisfied if they expect to be placed on hold for 4 minutes and only wait 3, instead of expecting a 2-minute wait and having to wait 2½. Bewa re: Your customers expectations will increase over time and so should your abil ity to meet them. When making improvements, focus on those areas where expectati ons are low but the value to the customer is high. Two additional drivers that generate customer satisfaction: 5. Recovery & Problem Solving It is a fact that a customer who has encountered a problem, and was satisfied wi th your prompt and efficient response, actually becomes a more loyal customer th an another customer that never had a problem. This boils down to building a cult ure for speedy resolution, because this creates an opportunity for loyalty. To pursue this opportunity, you should be able to answer yes to this question: " Do you empower employees to solve problems quickly & perform service recovery?" 6. Reputation & Credibility Bad news travels faster than good news. As was written in the last issue of this magazine, customers who feel their needs are not being met do not hold back. They turn elsewhere to buy their products or services Seventy-six percent (76%) of people in a survey conducted in the US market reported that they have stopped doing business with a company with poor customer service. That is a lot of cust omers! In a business environment where consumers have multiple choices, and wher e the vast majority of companies depend on their existing customer base for both profitability and growth, focusing on customer experience makes a lot of sense. Taking care of your customers is not just a fad in today s customer experience e conomy. It is a strategy designed to increase profitability and grow your custom er base.




Businesses that are successful are those that provide good customer service and experiences. They have discovered that the customer experience is an essential component of the company s brand identity. Customer satisfaction research From Wikipedia, the free encyclopedia Jump to: navigation, search This article has multiple issues. Please help improve it or discuss thes e issues on the talk page. • It does not cite any references or sources. Please help improve it by citing rel iable sources. Tagged since October 2008. • Its neutrality or factuality may be compromised by weasel words. Tagged since Oc tober 2008. Customer satisfaction research is that area of marketing research which focuses on customers perceptions with their shopping or purchase experience. Many firms are interested in understanding what their customers thought about th eir shopping or purchase experience, because finding new customers is generally more costly and difficult than servicing existing or repeat customers. Many people are familiar with "business to customer" (B2C) or retail-level resea rch, but there are also many "business to business" (B2B) or wholesale-level pro jects commissioned as well. Contents [hide] • 1 Types of research o 1.1 Descriptive or documentary research o 1.2 Inferential or models-based research • 2 Methods o 2.1 Quantitative Research Studies o 2.2 Qualitative Research Studies • 3 References • 4 See also [edit] Types of research [edit] Descriptive or documentary research Many customer satisfaction studies are intentionally or unintentionally only "de scriptive" in nature because they simply provide a snapshot in time of customer attitudes. If the study instrument is administered to groups of customers period ically, then a descriptive picture of customer satisfaction through time can be developed (this is a type of "tracking" study). [edit] Inferential or models-based research Beyond documentary types of work are studies that attempt to provide an understa nding of why customers have the perceptions they do and what may be done to chan ge those perceptions. While models-based studies also provide snapshots of custo mer attitudes, the results of these studies are more powerful because they prese nt the firm with recommendations on how to improve customer satisfaction. Freque ntly, these studies also provide firms with a prioritization of the various reco mmended actions. Inferential studies can also be conducted as tracking studies. When this is done, the firm can gain insight into how the drivers of customer sa tisfaction are changing in addition to documenting the levels and areas of custo mer satisfaction. [edit] Methods [edit] Quantitative Research Studies Quantitative studies allow a firm to develop an understanding of the "big pictur e" of their customers experiences based upon a relatively small number of inter views. This "sample" of the firm s customers must be carefully designed and draw n if the results of the study are to be considered representative of the custome r population as a whole. In most cases, the results of quantitative studies are based upon the responses of a relatively "large" number of interviews. Depending upon the size of the population and the amount of segmentation desired, "large" can be as few as 50 responses or range from several hundred to thousands of int





erviews. Mail-based, telephone-based, and (more recently) Internet-based surveys and related data collection methods. [edit] Qualitative Research Studies Qualitative studies are used by firms to provide a more detailed and/or unconstr ained understanding of customer experiences. In most cases, the results of quali tative studies are based upon dozens of interviews. Qualitative studies are not designed to provide insights that are projectable to the customer population: qu alitative studies are used for initial exploration of experiences and topics or to probe more deeply the reasons behind customer perceptions. Focus groups (grou p depth interviews) and "one-on-ones" (individual depth interviews) are common e xamples of qualitative studies. Customer Satisfaction Model The Customer Satisfaction Model is a macro level framework the links the 2 exten ded Ps (people and performance), and reflects the impact of the traditional Ps ( product, price, place, promotion).

While conceptually simple, the framework captures the essence of marketing: (a) Generate customer satisfaction by meeting, or better yet exceeding, customer s requirements and expectations, i.e. delivering superior relative perceived va lue. (b) Amass satisfied (and profitable) customers into a substantial share of the r elevant served market. (c) Leverage the market share into high profitability via scale economies (i.e. spreading fixed costs over a broad volume base), experience effects (i.e. learni ng curve efficiencies), and market clout (e.g. getting better deals from supplie rs). The CSM links together several fundamental business and marketing concepts: Key takeaways: (a) Share is a direct function of Relative Perceived Value (b) RPV is often dependent on achieving high levels of customer satisfaction (the "top box" effect) (c) Developing very high levels of satisfaction may be constrained by "s-curve" economics: it may be too costly to provide the service required to move customer s from somewhat satisfied to very satisfied. (d) Empirical evidence (largely from the PIMS studies) has validated that compan ies with very high market shares are positioned for superior profitability, res ulting from a combination of scale economies, learning/experience curve effects, or simply clout in the marketplace (with suppliers and buyers) (e) But, high market share - even very high market share - does not guarantee su perior profitability. A company must capitalize on its favorable market positio n (e.g. through effective operations) to capture the profitability potential. Benefits of customer satisfaction A benefit of creating highly satisfied (delighted) customers who are loyal to th e organisation is that they also spread positive word-of-mouth by, in essence, b ecoming a walking, talking advertisement for the firm. If there are many delight


ed customers spreading positive word-of-mouth communication, this then lowers th e cost of promotion to attract new customers. This benefit is particularly impor tant among professional services firms such as lawyers and accountants where wor d-of-mouth and reputation are key sources of information for new clients. As we have already discovered, highly satisfied customers are more forgiving, th erefore the firm can occasionally slip up and not and lose customers. Having hig hly satisfied customers then, is like having an insurance policy against somethi ng going wrong in the service encounter. Essentially, customer satisfaction can be seen as a means of achieving business goals as well as being a source of sustainable competitive advantage. Now read w hat your text has to say about customer satisfaction a nd how it can be measured . the Customer Satisfaction Cycle, Part 1 When the sales epidemic of Hush Puppies shoes began in the mid-1990s, the shoe w as due to be discontinued by its manufacture, Wolverine. With sales bottoming ou t at a mere 30,000 pairs a year, the future seemed bleak. But a few “hipsters” had b ecome fond of the shoe. They wore the shoes to their favorite coffee shops, bars , and night clubs. They began to put together ensembles to meet workplace dress codes. Soon their friends were buying the shoes, and the friends of their friend s, until two years later sales had reached 430,000 pairs a year. A year later fo ur times as many were sold.1 It was a sales epidemic started solely by what the customer valued, customer pull and customer word of mouth: the three key compone nts of the customer satisfaction cycle. Wolverine had an advantage in diagnosing customer satisfaction with its product. In this case, the customer found value in the product even though it had not b een realized by the company. By making a run on the resellers, the Mom and Pop s hops, and the few small stores that still carried the shoes, the “hipsters” demonstr ated that they valued the product and began pulling the shoes through the supply chain. As they communicated their satisfaction to friends, family and colleague s, the volume of the pull increased until the evidence of customer satisfaction for Hush Puppies became evident. It was the value that the customers placed on Hush Puppies that led to the incre ase of sales. In “The Loyalty Effect,” Frederick F. Reichheld says, “creating value fo r the customer is the foundation of every successful business. Creating value f or customers builds loyalty, and loyalty in turn builds growth, profit, and more value.” How then do we create value for our customers?

Creating Value Recently I worked with a group of room service professionals. This group has its own customer satisfaction training program and has worked hard over several yea rs to improve its third party customer satisfaction scores. The room service tra ining the group receives stresses doing extra things for the customer to improve satisfaction. “Create exceptional moments for the customer,’ they were told, “When you deliver to th e room, note if the plant needs watering. If it does, water it for the customer. Ask if the customer would like the windows open, if so, open them. Do whatever it takes to give the customer an exceptional experience.” In talking with the manager and the staff, I learned that all were highly dedica ted to providing the customer with the highest level of service. Customer satisf action was important to everyone. I accompanied staff members as they performed

their duties. I witnessed for myself the high level of commitment and detail tha t these professionals provided with each delivery. Why then were the customer sa tisfaction scores consistently lower than expected? The answered is in what the customer valued. While surveying the customers, it was quickly evident that the customers found t he delivery personnel friendly, helpful and professional. It was also clear that the customers were dissatisfied with the amount of time they had to wait for de livery. There was nothing intrinsically wrong with stopping to water a plant, op en a window, with the number of other “little things” that the staff were taught to do to improve customer satisfaction. However, those things took time. The realit y was that while the customer appreciated those little things; they did not valu e them. The customer valued faster delivery times. When trying to improve customer satisfaction, it is best to allow the customer t o define value. As in the Hush Puppies story, the turn around for the room servi ce scores began when the managers and staff responded to what the customer value d by lowering delivery times. By changing processes and procedures, the staff wa s able to cut delivery times in half in less than two weeks. They saw an immedia te upward trending of the theretofore flat line satisfaction scores. The turnaro und did not involve changing product, buying new equipment, or implementing a ne w training program. The change was realized by focusing on what the customer val ued! Customer values will depend on socio-economy group, demographics, family and per sonal preferences, brand identification, convenience and any number for other fa ctors. A consultant or third party survey can help you identify what is of value to your customers, but you should also gather immediate data from your customer s during normal business transactions. This will help you react quickly to chang es in your customers’ demands. In my next blog, we ll explore four survey elements: Quality, Cost, Delivery, an d Personnel. We ll look at examples of questions that will aid you in determinin g what is value-added to your customers. Finally, we ll examine customer pull an d word of mouth within the customer satisfaction cycle. Tata Motors Nano puts customers last 5 Comments Share Larger Smaller • • Agencies Tags : Tata Motor s Nano ranked, customer satisfaction, entry level sma ll cars, TNS, Total Customer Satisfaction, Maruti Suzuki Posted: Thu Feb 24 2011 , 15:22 hrs New Delhi: Tata Motor s Nano has been ranked last on customer satisfaction while Maruti Alt o tops, says TNS. Freelance Jobs China Wholesale Discount Shopping Buy Flower & Gift • Discussion • Blogs Gadkari is begging t... - By GhodboleyIndia to reply or be... - By vargheseGood move by preside... - By Atif UsmanBjp s real face - By amaranOpportunistic used b... - By IndianglobalStop this nonsense - By Ajit PanikerOdds with themselves.. . - By Roy Irresponsible Rakta charitraLearning Point Illumina at MDIDesi Food Galaxy Tata Motor s Nano has been ranked last among entry level small cars in terms of customer satisfaction, according to market research firm TNS. In the 2010 four-wheeler Total Customer Satisfaction (TCS) study by TNS Automo tive, Maruti Suzuki India s (MSI) best selling model Alto topped the entry level small car category. Omni and the once bread-and-butter model M800 followed the















list. "The customer expectations even at the bottom end are rising. The owners of Tata Nano expect more in terms of design and Maruti 800 owners expect better servici ng as the years go by," the survey said. While Alto scored 91 points, Nano got only 70 points thus being placed last, it added. Nano has been having issues following fire incidents with six reported cases sin ce its launch in 2009. Tata Motors had offered to provide additional safety meas ures free of cost as a precautionary measure, although it claimed that the Nano is absolutely safe. Ads by Google Tata Nano Now Less than Rs 3000*/month Drive Home Nano To day!www.TatananocampaignTata Aria The World of Luxury and Ruggedness come Toge ther in a Perfect Blend.TataAria.comTest the New Hyundai i10 The Best in-Class Mileage, Power & Resale Value. Test Drive it Now! In the higher priced cars segment, the survey reflected the Indian consumers res pect for value even if the price is higher. The study pointed out that car owners in Northern India are relatively less sati sfied compared to those in other parts of the country, primarily because of afte r sales services as the age of the car grows. "At the national level, the customers in the relatively larger cities are more s atisfied than those in the smaller cities. "This may be a reflection of the growing expectations in the smaller cities. The manufacturers will do well to understand those," TNS said. Apart from the entry level compact car segment, MSI s Zen Estilo and A-Star join tly topped the premium compact car category in customer satisfaction. While Volkswagen s (VW) Polo and MSI s Swift together became the number one in t he upper premium strata, MSI s Swift DZiRE was ranked as the numero uno in the e ntry-level mid-sized sedan segment. Other models that topped in different segments are Toyota Corolla Altis in premi um mid-sized sedan, VW Passat in entry-level luxury sedan, Toyota Innova and Mah indra Scorpio jointly in sports utility vehicle and multi utility vehicle and Ho nda CR-V in premium SUV categories. "In a year of high growth and long queues at the automotive dealerships, auto ma nufacturers maintained their poise and managed their processes to keep their cus tomers satisfied," TNS Automotive Executive Director Pradeep Saxena said. Ads by Google Tata Nano Now Less than Rs 3000*/month Drive Home Nano To day!www.Tatananocampaign£99 Car Service - Citroën £99 Citroën Service from Trained Ser vice Technicians - Get A Aria The World of Luxu ry and Ruggedness come Together in a Perfect The survey covered 9300 car buyers, opting for 56 models. Questionnaire of tata-nano ________________________________________ QUESTIONNAIRE OF TATA-NANO 1. What is the first thing, which comes into your mind when you think about NANO? .................................................. ............................. ..................... ................. ................. .................................................. ............................. ..................... ................. ................. .................................................. ............................. ..................... ................. ................. 2. 1. 2. 3. Instead of purchasing a Bike, will you prefer to go for the NANO? Yes No Can’t say





3. Which feature of NANO attracts you most, that inspires you to go for NANO? 1. Price 2. Design 3. Mileage 4. Interior space 5. All the above 6. Can’t say 4. Which colour of NANO would you prefer? 1. Red 2. Blue 3. White 4. Yellow 5. Silver 6. Other, Specify… …............ 5. 1. 2. 3. 4. 5. 6. 1. 2. 3. 7. 1. 2. 3. 8. 1. 2. 3. 9. 1. 2. 3. 4. For what purpose would you like to use NANO? Will offer it to your children to use it in place of a two wheeler. Will use as family car for shopping and travel. Will prefer as a taxi. Would like to offer as gift. Any other, specify................................. Do you think NANO is people s car Yes No Can’t say Will you recommend NANO to your friends and relatives? Yes No Can’t say Which small car would you prefer to buy? Maruti 800 Tata NANO Other……………….. How long can you wait for NANO? 1-2 months 2-4 months 4-6 months Can’t wait

10.If the price of NANO rises, would you still purchase it? 1. Yes 2. No 3. Can’t say 11.Will Tata be able to maintain the price of nano in future if there is hike in cost of raw materials? 1. Yes 2. No 3. Can’t say 12.How will you feel if NANO is used as a taxi? 1. Embarrass


2. Don’t care 3. Can’t say 13.Will there be traffic problem with the introduction of nano on Indian roads? 1. Yes 2. No 3. Can’t say 14.Can you trust NANO for safety? 1. Yes 2. No 3. Can’t say

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