12.3 Customer satisfaction
If we are to retain customers and to successfully implement CRM it is necessary that customers are at least satisfied with what they receive and how they are treated by the organisation . Lovelock et al. (2004, p. 89) define customer satisfaction as a:
.post-purchase evaluation of the overall service experience (processes and outcome). It is an affective (emotion) state or feeling reaction in which the consumer's needs, desires and expectations during the course of the service experience have been met or exceeded.
Merely achieving satisfaction, that is, meeting customer expectations, is not enough as they can be lured away by another offer. Instead, if the customer is delighted with the service product, the customer is more likely to remain loyal, despite attractive competitive offerings. A study by the Xerox Corporation found that delighted customers are six times more likely to repurchase than a merely satisfied customer.
However, we need to remember that we can only delight customers if satisfaction is first present and, additionally, that it is not easy to constantly delight customers.
To clarify the link between customer satisfaction, delighting the customer and loyalty, examine Figure 12.1. The figure indicates that improvements in satisfaction levels initially result in a large increase in loyalty, thus note the steep slope. Between the threshold points, little if any increase in loyalty is experienced when satisfaction is increased.
Figure 12.1 Non-linear effects of satisfaction levels on customer loyalty
Source: Lovelock et al. (2004, p. 90)
To exceed the second threshold requires the customer to be 'delighted', meaning significant further improvements in loyalty. The width of the threshold varies. For example, if there is a high investment in the relationship (either monetary or psychological investment) more dissatisfactory service encounters are required before the customer switches to competitors.
Think about this in terms of your family medical doctor. If your doctor keeps you waiting one hour in the reception area, or the doctor increases the fees, and this results in a dissatisfactory experience, as a customer you are unlikely to switch to another doctor. This is because the doctor has your complete medical records, understands your family history, and a relationship has been formed between you, the patient, and the doctor. The psychological investment means that as a patient you are more likely to be forgiving when the occasional dissatisfactory experience occurs.
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