Customer Value,

Satisfaction and Loyalty

The New “Managerial Paradigm”
 Value
• Benefits (actual or perceived)
– Come from features or product attributes
– May be economic, social or personal

• Costs (actual or perceived)

– Economic/Financial
• Money
• Time
• Resources
– Social/Personal
• worry, feelings of uncertainty, distress
• Social embarrassment

• The Value Equation: Value = Benefits - Costs

 The Value Proposition

The whole cluster of benefits the

company promises to deliver less the associated total cost.
 Loyalty

A deeply held commitment to re-buy

a preferred product
or service in the future.
JetBlue has loyal customers
 Customer Satisfaction
• Two components
– Cognitive (thinking, reasoning, logic)
– Affective (emotional)

• Driven by Performance vs. Expectations Gap

• Articulation Issues
– Consumers can almost always articulate the reasons for their
dissatisfaction
– Sometimes harder for consumers to articulate why they are
satisfied
Measuring Satisfaction
Periodic Surveys

Customer Loss Rate &

Returns

Mystery Shoppers

Word of Mouth
Product and Service Quality

Quality is the totality of features and

characteristics of a product or
service that bear on its
ability to satisfy
needs.
 Quality

Conformance Performance
quality quality