Free Management Dissertations - It Has Been A Major Topic Of Discussion In American Boardrooms Since The
It has been a major topic of discussion in American boardrooms since the 1980s, yet the exact formula for creating an effective customer satisfaction program is still murky. Given that customer satisfaction is positively related to loyalty, which in turn leads to increased profitability, market share, and growth, the importance of developing an effective program is critical. (Naumann, Jackson Jr., and Rosenbaum, 2001)
To try and clear up this confusion, and exactly define the nature customer satisfaction programmes and how to design and implement them, researchers have explored the failures of many past programmes. According to a study conducted by Arthur D. Little and McKinsey, less than one-third of all customer satisfaction initiatives accomplished anything, and two-thirds of them ground to a halt. (Duffin 1993)
Ahire (1996) cites the major reasons for these failures as: "lack of top management commitment, unrealistic expectations about the time frame and cost of implementing them, over- or under-relce on statistical methods, and the failure to develop and sustain a quality-oriented corporate culture."
A major problem with most customer satisfaction programs is that they begin with an attempt by the marketing research department to send customers a standard, packaged, survey, or one from another company, to probe their attitudes about customer service. Although this seems to be an easy and inexpensive method, the results are generally less than satisfactory, as questions have no true relevance to the specific firm or its customers and thus answers may not be relevant either. Each firm should take the initiative to develop its own measurement program based on its needs and the needs of its customers, as this is the only effective way to ensure that survey results will be useful to management and lead to future improvements.
An effective customer satisfaction program must be based on an understanding of customer value: from the customer's perspective, the ratio of the expected benefits of a product or service to the expected outlays. This is due to the fact that customers can seldom determine the benefits or outlays objectively, thus their expectations and perceptions of them become critical. These expectations and perceptions can be separated into two groups: hygiene factors and satisfiers, much like in Herzberg's hygiene and motivation theory for motivating a workforce. (Herzberg, 1971) Hygiene factors are mandatory for satisfying customers, whereas satisfiers are enhancing factors: the "extras". For example, a Toyota customer may indicate that the reliability of their vehicle is a hygiene factor, but that the fuel efficiency is a satisfier. As a result, high satisfaction levels can only be achieved when hygiene factors meet customer expectations and satisfiers are delivered at levels that exceed those expectations.
