CUSTOMER SATISFACTION

Customer satisfaction (often abbreviated as CSAT, more

correctly CSat) is a term frequently used in marketing. It is a measure of how
products and services supplied by a company meet or
surpass customer expectation. Customer satisfaction is defined as "the number
of customers, or percentage of total customers, whose reported experience with
a firm, its products, or its services (ratings) exceeds specified satisfaction goals.

PURPOSE

 Customer satisfaction provides a leading indicator of consumer purchase

intentions and loyalty.
 Customer satisfaction data are among the most frequently collected
indicators of market perceptions.

Benefits of Customer Satisfaction

Increased customer loyalty

Higher amount of average purchases

Increased word-of-mouth (WOM)

Stronger staff-customer relationships

The Importance of Customer Satisfaction

Businesses need money to survive. To make money, businesses need

customers. Ideally these customers are happy, tell their friends about you and
keep coming back.
Whether you’re in a B2B or B2C marketplace, at the end of the day, you’re
living in an H2H world…. human to human. And that’s where the importance
of customer satisfaction comes in.

Building relationships with customers

Customer satisfaction is key in creating a long-term relationship with your

customers. If you think back to the dating analogy, going through the sales
process is just like wooing your prospect to turn them into a customer.

But keeping a long term relationship functioning is hard work. You need to
keep delivering value time and time again. You need to keep
yourcustomer satisfied.

 81% of satisfied customers are more likely to do business with

you again if they have a positive experience.
 95% of customers will “take action” after a negative experience – like
sharing concerns with friends and family, or churning.

Ongoing satisfaction leads to loyalty. Once customers have placed trust in a

company and are assured that the company will continue to deliver they will
continue to do business with them.

Loyalty is a worthy goal to shoot for the White House Office of Consumer
Affairs estimates that loyal customers are worth up to 10 times their initial
purchase value.
Calculating the Effect of Customer Satisfaction

Customer satisfaction is extremely important to your bottom line.

The Feedback of Customer Satisfaction

If customer satisfaction is the goal, then constant feedback is the best way to
improve over time. You need to measure customer satisfaction in order to
improve it. There are a few ways to measure customer satisfaction, but the most
common and effective ways are to simply ask your customer.

Transactional satisfaction

Transactional satisfaction measures how your customers feel after contacting

your business. After each reply or interaction, ask the customer how they felt
about the exchange. Are they satisfied? Or could you have done more to make
them happy?

Relational satisfaction

Of course, even if you don’t interact with your customers, they still have an
opinion about your company. Measuring satisfaction at regular intervals instead
of just after interactions is also important.
 OBJECTIVES OF CUSTOMER SATISFACATION

I. Assessing the effects of quality, value and customer satisfaction on

consumer Behavioral intention in service environments.

II. A study the effects of service quality and the mediating role of customer
satisfaction.

III. Determining how well company and its customers are satisfying their
expectations and requirements.

IV. To analyse complaints of customer towards products and services.

V. To develop effective solution to the problem faced by customers.

LIMITATIONS OF CUSTOMER SATISFACTION

 Expected versus delivered value is being measured – CSAT is NOT

necessarily a measure of overall value or quality of the firm and its
offerings
 High CSAT scores may be simply a reflection of low expectations of the
firm
 High CSAT scores may not deliver increased profitability (and may even
have a negative financial impact – primarily due to the firm over-
delivering increased customer value)
 Existing customers will adjust their expectations to the value regularly
being delivered, resulting in most customers being “just satisfied”
(reflected in average, not high, CSAT scores). This means that it is
 difficult (high effort and cost) to maintain very high satisfaction scores
over a long period of time
 More engaged and involved customers are more likely to participate in
optional market research surveys, such as online surveys, potentially
leading to an overestimation of CSAT levels
 There are better measures available – for the aggregate of factors that
customer satisfaction is suggested to address (which include of loyalty,
customer profitability, likeability of the firm, word-of-mouth potential,
and so on).