How satisfied are your customers?
Posted by Simone Militzer on November 1st, 2006 at 3:51pm
Customer satisfaction serves as a good indicator of the quality of customer loyalty arrangements and quality management. It is central to marketing activities. Yet, the coordination of customer satisfaction is a challenge for managers.
Do you know why your customers come back to you? Is it owing to a routine to buy things at your store; or a real belief and a strong confidence in the quality of your products? Why and when are customers satisfied and when they are loyal? What are the reasons why they don’t come back?
Research has found explanations to these questions. There is coherence between quality management of services and customer satisfaction. If you have high quality management of services, your customers will be satisfied. But how do you measure this?
There are some methods to measure the level of quality, and consequentially, customer satisfaction. It allows differentiation between objective and subjective methods. One side looks at objective magnitudes such as turnover or market share, where the other analyses subjective things such as customer complaints.
One of the well-known methods of quality measurement from the perceptions of customers is Servqual. The word “Servqual†combines service and quality. Servqual is a standardised questionnaire and based on a model by Parasuraman, Zeithaml & Berry [1990].
The method measures the difference between the expected and the received achievements from inter-branch dimensions of quality. This method has five dimensions called RATER:
- Reliability – measures the correct and reliable achievement of staff
- Assurance – measures politeness, competence and appearance
- Tangibles – evaluates for example the dress or appearance of staff
- Empathy – measures the intuition of the staff
- Responsiveness – the quick and active reaction to customer wishes
Â
These aspects are specified with 22 items. Every item has two statements. For example the dimension Assurance/Competence – “The staff should be polite to customersâ€; and for Reliability – “You should bank on that the service will be delivered on timeâ€. The respondent shall appraise these statements on a seven point scale. This then allows for calculation of the perceived level of quality.Furthermore, a good example of the progression of customer satisfaction and the increase of customer loyalty, due to high service quality, is the German bonus program Payback. What differentiates Payback from other bonus programs?Â
The aim of Payback is the establishment of an inter-branch customer loyalty program to encourage customer satisfaction. Payback is the leading bonus program in Germany with 26.5 million cards purchased. The partners are high quality services inter-branch stores including pharmacies, opticians, car rental agencies, big food stores, hotels, clothing stores and many more. Owners of Payback cards can collect points from companies of all service branches. 1 point is equivalent to 1 cent. Usually points are reflected in the value from 0.5 – 4 % of the purchase price. You can convert the points and you will get premiums; Lufthansa Miles and More Miles; cash; or you can donate to UNICEF, etc.
According to a 2003 study from the research institute EMNID Payback has the highest customer satisfaction among all customer satisfaction programs in Germany. EMNID discovered that in every third customer’s purse lies a Payback card, right next to the health insurance card and cash card.
Now and in the future, it is important to improve customer relationships and to have satisfied customers because the recovery of a prospect is five times more expensive than keeping a regular customer at the company.
When you look at the scale, you can see where your strengths and weaknesses lie. If you have a high score, your customers come back from conviction because of satisfaction and not because of a routine.
Posted in Uncategorized
