Customer satisfaction research focusses on two key issues  

Understanding the expectations and requirements of the customers Determining how well a company and its major competitors are succeeding in satisfying these expectations and requirements

Some research findings   

One hundred satisfied customers generate 25 new customers For every complaint received, there are 20 other customers who feel the same way but do not bother to complain. The cost of accquiring a new customer is 5 times as great as the cost of keeping a satisfied customer.

The Malcolm Baldrige National Quality Award 

30% 15% 15% 15% 10% 9% 6%

Customer satisfaction Human Resource Utilization Quality assurance Quality results Leadership Strategic quality planning Information and analysis

Objectives of customer satisfaction research    

Determine critical performance attributes that result in customer satisfaction Assess the performance of the company and its major competitors Establish priorities and take corrective action Monitor progress

Planning the determination of Performance attributes 



Conduct interviews with employees Analyse indirect measures of customer satisfaction Conduct qualitative research with customers Conduct quantitative research with customers to solidify the requirements and expectations Analyse the results Present the results to the organisation Finalyse the critical Performance attributes Obtain commitment from employees

Universal Performance attributes   

Attributes related to the product: Value price relationship, product quality, product benefits, product features, product design, product reliability &consistency, Range of products and consistency Attributes related to service: Gurantee or warranty, delivery, Complaint handling, resolution of problems Attributes related to purchase: Courtesy, communication , ease of acquisition

Designing questionnaire for a customer satisfaction survey 

Questions on overall customer satisfaction Questions relating to demographics and psychographics. Questions on individual performance attributes. Likelihood of repurchasing the product or service. The likelihood of recommending the product or service to friends and relatives.

Measurement scales   

Yes- No Scale: If the question addresses an event that either occurred or did not occur Three Point Scale: If questions relate to specific performance requirements Five point scale: When responses involve attitudes and opinions other than facts.

Comparison standards other than customer expectations: 

Comparing performance to desires Satisfaction based on product performance other than expectations Comparing performance to experience based norms Comparing performance to an ideal Satisfaction based on an evaluaton of equity

Summated rating scales: 

Ratings on several performance attributes can be added to form an index called a summated Rating Scale.

Analysing Results    

Descriptive Percentages: Descriptive percentages can be used in the following three types of trend analysis. Plots of percentages over time to indicate where improvements have been accomplished and where additional emphasis is necessary. Statistical procedures to determine if significant changes have occurred from the previous period Statistical quality control limits to highlight areas where significant trends are occuring.

Penalty Reward Analysis   

A basic factor: Creates dissatisfaction when not achieved but does not increase satisfaction when achieved or exceeded. A performance factor: results in reward when the requirement is exceeded and in a penalty when the requirement is not satisfied. An excitement factor incurs no penalty if not achieved but adds value if the requirement is exceeded

Gap Analysis
Expectations vs Performance  Identify :  Low priority attributes  Attributes that need attention  Overkill areas  Company strengths

Statistical tools that can be used are  

Arithmetic Averages: Arithmetic averages on all performance attributes can be computed and the averages can be compared with competitor s scores to more clearly define the company strengths and weaknesses Correlation Analysis: The correlation coefficient is a number between + and_ 1 that indicate4s the degree of linear association between two variables. Correlation coefficients between the overall satisfaction rating and individual performance attributes can be found out

Statistical tools that can be used are  

ultiple Regression: Multiple Regression is a statistical technique used to develop an equation in which customer s ratings of the performance attributes are used to predict the overall satisfaction rating. Helps in understanding the importance and predictive accuracy of the performance attributes.

Statistical tools that can be used are 

Discriminant analysis: Discriminant analysis can determine if the set of performance attributes can effectivey distinguish between satisfied and dissatisfied customers.

Statistical tools that can be used are 

Factor Analysis: Factor Analysis is used to investigate the nature and number of underlying dimensions in the survey data The performance attributes can be combined to form a smaller set of unifying dimensions 

Statistical tools that can be used are  

Correspondence Analysis:
Correspondence analysis is a mathematical tool used to develop perceptual maps. Customer satisfaction research is anideal applicaton for perceptual mapping, since relatonships among variables such as performance attributes, demographics and competitors can be investigated These relationships are visually potrayed by the relative positions of points on a two or three dimensional perceptual map. Points that cluster together reveal performance attributes, demographic characteristics , and companies that are closely related. 

Multiple sources of Customer satisfaction information:   

Cross comparision with other key data and information such as complaints, losses and gains of customers. Correlation of satisfaction results with other satisfacton indicators such as complaints and gains and losses of customers Trends in major adverse indicators such as complaints, claims ,refunds, repeat services, replacement, repairs, warranty costs etc.

Exceeding customer expectations:    

Determine the critical performance attributes that influence how customers choose products, services and companies Determine the performance standards and expectations associated with these attributes Quantify the performance of the company and its major competitors in satisfying these expectations Implement Priority 1: Excel at satisfying the performance attributes and expectatons that influence how customers choose products, services and companies.

Exceeding customer expectations   

Determine the performance attributes that create customer satisfaction after the choice of products, services and companies has been made. Quantify the performance of the company and its major competitors in satisfying this set of performance attributes. Implement priority 2 : Excel at satisfying the performance attributes and expectatons that satisfy the customers after they have selected a particular product or service

Exceeding customer expectations   

Classify the performance attributes into basic factors, performance factors, and excitement factors Quantify the performance of the company and its major competitors in satisfying this set of excitement factors Implement priority 3: Emphasize satisfying and exceeding both the performance and the excitement factors

Managing Customer Expectations: 

A company can gracefully give the customer news that service will not be as expected:

Managing Customer Expectations  


Offer Choices:One way to reset expectaqtions is to give customer options for any aspects of service that are meaningful, such as time and cost. Create tiered value service offerings Companies can establish the criteria by which the customers assess service. Negotiate unrealistic Expectations

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