Customer satisfaction, a business term, is a measure of how products and services supplied by a company meet or surpass customer expectation. It is seen as a key performance indicator within business and is part of the four perspectives of a Balanced Scorecard. Wall Street, Manhattan is the location of the New York Stock Exchange and is often used as a symbol for the world of business. ... Jargon redirects here. ... In 1992, Robert S. Kaplan and David Norton introduced the balanced scorecard (BSC), a concept for measuring a companys activities in terms of its vision and strategies, to give managers a comprehensive view of the performance of a business. ...

In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy.^[1]

Measuring customer satisfaction

Organizations are increasingly interested in retaining existing customers while targeting non-customers;^[2] measuring customer satisfaction provides an indication of how successful the organization is at providing products and/or services to the marketplace.

Customer satisfaction is an ambiguous and abstract concept and the actual manifestation of the state of satisfaction will vary from person to person and product/service to product/service. The state of satisfaction depends on a number of both psychological and physical variables which correlate with satisfaction behaviors such as return and recommend rate. The level of satisfaction can also vary depending on other options the customer may have and other products against which the customer can compare the organization's products.

Because satisfaction is basically a psychological state, care should be taken in the effort of quantitative measurement, although a large quantity of research in this area has recently been developed. Work done by Berry, Brodeur between 1990 and 1998^[3] defined ten 'Quality Values' which influence satisfaction behavior, further expanded by Berry in 2002 and known as the ten domains of satisfaction. These ten domains of satisfaction include: Quality, Value, Timeliness, Efficiency, Ease of Access, Environment, Inter-departmental Teamwork, Front line Service Behaviors, Commitment to the Customer and Innovation. These factors are emphasized for continuous improvement and organizational change measurement and are most often utilized to develop the architecture for satisfaction measurement as an integrated model. Work done by Parasuraman, Zeithaml and Berry between 1985 and 1988 provides the basis for the measurement of customer satisfaction with a service by using the gap between the customer's expectation of performance and their perceived experience of performance. This provides the measurer with a satisfaction "gap" which is objective and quantitative in nature. Work done by Cronin and Taylor propose the "confirmation/disconfirmation" theory of combining the "gap" described by Parasuraman, Zeithaml and Berry as two different measures (perception and expectation of performance) into a single measurement of performance according to expectation. According to Garbrand, customer satisfaction equals perception of performance divided by expectation of performance. The term satisfaction can refer to: (I Cant Get No) Satisfaction, a Rolling Stones song, which has also been covered by several artists, including: The Residents, released as a single (Satiafaction b/w Loser=Weed) in 1976 and 1978. ...

The usual measures of customer satisfaction involve a survey ^[4] with a set of statements using a Likert Technique or scale. The customer is asked to evaluate each statement and in term of their perception and expectation of the performance of the organisation being measured. Sampling is that part of statistical practice concerned with the selection of individual observations intended to yield some knowledge about a population of concern, especially for the purposes of statistical inference. ... A Likert scale (pronounced lick-ert) is a type of psychometric response scale often used in questionnaires, and is the most widely used scale in survey research. ...

Customer Feedback

Customer feedback is an important and valuable way for companies to get to the heart of what their customers really think. Effective customer feedback allows companies to make improvements to service quality, thus increasing retention, lifetime customer value and enhancing overall satisfaction levels.

Instant customer feedback consists of comments captured whilst a customer is undergoing the service provided by the company. Capturing feedback at the point of experience allows companies to gain real-time insight into how their customers are feeling. Thus, they are able to respond much more effectively. Many companies are utilising new, innovative methods to get feedback this way, including the use of SMS and mobile email, which allows companies to capture verbatim comments in-situ.

See also

• American Customer Satisfaction Index
• Net Promoter Score
• Loyalty business model
• Customer relationship management

Since 1994, the American Customer Satisfaction Index (ACSI) has been a leading indicator of customer satisfaction, measuring satisfaction across the entire U.S. consumer economy. ... A net promoter score (NPS) is the result of a customer satisfaction survey in which customers are asked only one so-called Ultimate question: How likely are you to recommend Company or Product X to a friend or colleague? The NPS concept was developed by loyalty business model expert Fred... The loyalty business model is a business model used in strategic management in which company resources are employed so as to increase the loyalty of customers and other stakeholders in the expectation that corporate objectives will be met or surpassed. ... Customer relationship management (CRM) is a broad term that covers concepts used by companies to manage their relationships with customers, including the capture, storage and analysis of customer information. ...

References

1. ^ The Future of Business: The Essentials By Lawrence J. Gitman, Carl D McDaniel ISBN 0324320280
2. ^ Fundamentals of Customer-Focused Management: Competing Through Service By Joby John
3. ^ Marketing Services: Competing Through Quality by Leonard L Berry, A Parasuraman
4. ^ Customer Satisfaction Toolkit for Iso 9001: 2000 By Sheila Kessler ISBN 0873895592

External Links

• The Financial Times- "How to find out what's being said about you"
• Satisfaction not guaranteed: is it time to rethink complaints management?