Measuring Customer Satisfaction

Measuring Customer Satisfaction - MEASURING MEASURING...

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Unformatted text preview: MEASURING MEASURING CUSTMER SATISFACTION SATISFACTION Ahmad K. Elshennawy CS1 Measuring Customer satisfaction CS2 Why Measure Customer Satisfaction? Customer Decay The average company loses 10 – 30% of its customers each year: But few know few know Which When Why OR Lost sales revenue? CS3 Adapted from Handbook of Customer satisfaction and Loyalty Measurement by Nigel and Alexander, 2000 Stage One Minimum Minimum Requirements Stage Two Custo e Customer Focus Stage Three Customer Attitudes Competitive Focus on Targeted Markets Customer Value Stage Four Conformance Quality • Delivering what we promise • Meeting standards Customer Satisfaction • Providing what customers want • Responding to customer customer complaints Customer Loyalty • Retaining our customers • Getting them to recommend us • Meeting critical needs of targeted customers • Outperforming competitors • Creating new, unique benefits 21st Century Growth Company Source: Adapted from Managing Customer Value by Bradley T. Gale, (New York, The Free Press, 1994) CS4 Loyalty Levels Partners Advocates Clients Customers Prospects Suspects PROFIT STARTS HERE STARTS HERE CS5 Adapted from Handbook of Customer satisfaction and Loyalty Measurement by Nigel and Alexander, 2000 Types Types of Customer Loyalty Example Monopoly Loyalty Cost of Change Loyalty Incentivised Loyalty Habitual Loyalty Committed Loyalty Subway/rail Commuters Financial Software Frequent Business Flyers Gas Station Soccer Club Degree of allegiance Low Medium Low To Medium Low High CS6 Adapted from Handbook of Customer satisfaction and Loyalty Measurement by Nigel and Alexander, 2000 Handbook The Satisfaction-Profit Chain Profit Customer Retention Customer Commitment Customer Value Package Customer Satisfaction Employee Satisfaction CS7 Source: Adapted from Managing Customer Value by Bradley T. Gale, (New York, The Free Press, 1994) Service Service Gaps Gap 1 The Promotional Gap What is said is different from what is delivered Gap 2 The Understanding Gap Management’s perceptions of customer's expectations inaccurate Gap 3 The Procedural Gap Inaccurate procedural procedural Translation of customer’s expectations Gap 4 The Behavioral Gap Service delivered delivered is different than service specifications Gap 5 The Perception Gap Level of service perceived different from Actual The Service Quality Gap The difference between the customer’s expectations of a service and their Perceptions of the actual service delivered! Perceptions of the actual service delivered! CS8 Adapted from Handbook of Customer satisfaction and Loyalty Measurement by Nigel and Alexander, 2000 Measuring Customer satisfaction: Measuring Customer satisfaction: Tools and Techniques • • • • • • • • • Call Reports Comment cards Depth Interviews Focus groups Customer surveys Direct customer contact Field intelligence intelligence Complaint analysis Internet monitoring CS9 Customer Satisfaction Customer Satisfaction Surveys Surveys Basic Survey Design Rules Basic Survey Design Rules • Identify purpose and respondents • Determine who should conduct the survey survey • Select the appropriate survey instrument • Design questions Design questions and and response scales CS11 Difficulties Difficulties with Customer Satisfaction Measurement Measurement • Poor measurement schemes Failure to identify appropriate quality dimensions • Failure to identify appropriate quality dimensions - - address issues important to customer not what the company think it is important • Failure to weight dimensions appropriately • Lack of comparison with leading competitors • Failure to measure potential and former customers • Confusing loyalty with satisfaction loyalty with satisfaction CS12 Customer Perceived Value (CPV) CPV measures how customers assess benefits - - such as product performance, performance, ease of use, or time savings - - against costs, such as purchase purchase price, installation cost or time, and so on - - in making purchase purchase decisions CS13 Survey Methods Designing, conducting, analyzing, and reporting the results of surveys vary according to: – Research goals – Population surveyed – Type of survey that is used CS14 The The Survey Process Analysis & Reporting Conducting Surveys Designing Surveys Survey Options Project Owner Set Objectives CS15 Customer Customer Satisfaction Surveys Surveys 1. Survey Objectives and Project Planning Pl Sampling & Survey Options Designing Surveys Conducting Surveys Surveys Analysis & Reporting CS16 2. 3. 4. 5. Survey Objectives Survey Objectives • • • What are you measuring? What are the objectives Customer perception or Market Standing? Project planning planning • CS17 What Are You Measuring? What Are You Measuring? Three Questions: • • • What is your Total Product? Who should define it? Are there any alternatives to this basis for your measure? CS18 Measuring Customer Measuring Customer Satisfaction Customer Satisfaction Overall Quality Relative Price Price Competitiveness Product Quality Customer Service Distribution and Sales Sales Brand Customer satisfaction is a measure of how an organization’s total product performs in relation to a set of customer expectations. CS19 Adapted from Handbook of Customer satisfaction and Loyalty Measurement by Nigel and Alexander, 2000 Customer Value Package The total product encompasses anything that is contributing to how anything that is contributing to how customers customers evaluate the total package of benefits customer value package of benefits - - customer value package - - provided versus the cost of acquiring them acquiring them. CS20 Survey Objectives Survey Objectives • • • Customer priorities Your performance performance Relate your performance to customer priorities Relate your performance to your competitors competitors Priorities for improvement CS21 • • Importance Importance vs. satisfaction Using Excel Software Importance vs. Satisfaction Satisfaction Importance 90 80 70 60 50 40 30 20 10 0 Responsiv enes s Product performance Customer serv ice Tec hnical support Lead time Lead time Serv ice pers onnel Delivery Product quality Relating your performance to customer priorities CS22 Relating Relating Your Performance to Your Competitors Using Excel Software Our Performance vs. Competition 9 7 Competitor B Competitor A Our product 3 1 100 80 60 40 20 0 CS23 5 Relating your performance to competition Measuring Customer Perception or Market Standing Survey? St Measuring customer satisfaction options: • Customer Perception Survey - - involving only the company existing customer base only the company’s existing customer base • Market Standing Survey - - more complex St and detailed CS24 Measuring Customer Perception Measuring Customer Perception Customer perception surveys can be used to: • Measure customer satisfaction with your total product product • Compare your own performance with customer’s expectations • Identify PFIs • Provide data for monitoring improvements • Improve customer retention rates customer retention rates • Keep ISO 9000 assessment bodies happy! CS25 Customer Customer Satisfaction Surveys Surveys 1. Survey Objectives and Project Survey Objectives and Project Planning Planning Sampling & Survey Options Designing Surveys Conducting Surveys Analysis & Reporting 2. 3. 4. 5. CS26 Sampling Sampling • The purpose of sampling is to collect a small number of units from the target population in such a way that the sample is truly representative of the total population being surveyed. CS27 Sampling Sampling Options Random Samples NonNon-Random Samples Simple Random Sample Stratified Random Sample Cluster Sampling Convenience Sample Judgment Sample Quota Sample CS28 Population vs. Sample Po • Population is ... The group of individuals is The group of individuals you wish to study or solicit opinion. • Sample is ... A small number of individuals is small number of individuals selected from the population Why Sample? CS29 Why Sampling? Why Sampling? Survey Population A sample is taken sample is taken from from the relevant population Sample Estimations or generalizations regarding an entire population's opinions attit opinions, attitudes or beliefs on a or beliefs on particular particular topic CS30 Basic Types of Samples Basic Types of Samples • Random Sample … is a sample that gives every member of the population an equal opportunity for selection in the sample. It is suitable when the the sample. It is suitable when the population is believed to be relatively homogeneous. Population Sample • Stratified Sample … is the process of randomly sampling after grouping members of the population into relatively homogeneous subgroups. Population Population Sample Population vs. Population vs. Sample CS31 Survey Survey Options Surveys Written Electronic Oral Drop-off Mail Group Administered Telephone Group Interview On the Internet e-mail Public Computers CS32 Written Surveys Written • Mail Surveys • Group Administered Questionnaires Administered Questionnaires – The group administered questionnaire would allow you to get your survey results in one space of time – Would ensure a very high response rate – this type of survey might be the most efficient for your specific purposes your specific purposes • Drop-off Survey Survey CS33 Oral Surveys • • Oral surveys are generally used to get thorough opinions and impressions from the respondents th Oral surveys can be administered in several different ways. – Group interview, the respondents work in groups to answer the questions together while one person takes notes for the whole group. – Phone surveys Ph • Strengths – Personal Contact – Response Rate Weaknesses – Cost – Bias – Types of Questions Possible – Attitude • CS34 Electronic Surveys Electronic Surveys Electronic Surveys – electronic survey is becoming a more widely used survey method – Electronic surveys can take many forms: surveys can take many forms: • Electronic mail messages sent to potential respondents • On the Internet th • Publicly available computers in high-traffic areas such as libraries and shopping malls CS35 Electronic Surveys Electronic Surveys Strengths • • • • • • • Cost-savings Ease of Editing/Analysis Faster Transmission Time Easy Use of Pre-letters Higher Response Rate More Candid Responses Potentially Quicker Response Time with Wider Magnitude of Coverage CS36 Electronic Surveys Electronic Surveys Weaknesses • • • • • Sample Demographic Limitations Lower Levels of Confidentiality Layout and Presentation issues and Presentation issues Additional Orientation/Instructions Potential Technical Problems with Hardware and Software Software • Response Rate CS37 Customer Customer Satisfaction Surveys Surveys 1. Survey Objectives and Survey Objectives and Project Project Planning Sampling & Survey Options Designing Surveys Surveys Conducting Surveys Analysis & Reporting 2. 3. 4. 5. CS38 Designing Designing Surveys • Initial planning is important planning is important • The instrument must remain stable in order to The instrument must remain stable in order to standardize standardize the data set! • Important decisions: – Types of questions – Question contents – Wording, order and format of your survey questionnaire questionnaire CS39 Common Mistakes Common Mistakes • • • • No proper planning! Inappropriate and irrelevant questions Inappropriate flow of questions Poorly worded questions CS40 Basic Basic Principles of Asking Questions • Will the respondent have the information or knowledge to answer the questions? • Will the respondent understand the questions? • Is the respondent likely to give a true answer? answer? • Will the question bias the response? ques CS41 Attributes of The Quantitative Customer Survey • A series of questions and statements about the product or service • A response scale that follows each of the questions or statements • Reduce emphasis on open-ended questions - Only a few is recommended few is recommended • A survey tool (questionnaire) that presents su (ques the questions and records the responses CS42 Designing An Effective Survey Designing An Effective Survey • Collect customer surveys ever chance you get • Keep the length of two pages or less • Make the font size large enough to read easily • Don’t use unusual fonts • Keep a space at the top for the questionnaire’s number • Include brief instructions at the top of the survey CS43 Designing An Effective Survey Designing An Effective Survey • Include a few basic identifiers • For more extensive surveys, e.g. using agree/disagree scales, include up to three statements about each satisfaction issue • Don’t place questions/statements addressing the same issue next to each other the same issue next to each other • Questions/statements with the same scale sa sca should be grouped together CS44 Designing An Effective Survey Designing An Effective Survey • Somewhere within the survey, include a list of all issues the survey addresses • Include one or two open-ended questions related to one or two open questions related to satisfaction • Include this final question in every survey: What would you recommend that we do to improve this survey? • Number each of the questions or statements • Consider using a graphic designer’s services CS45 Questions Questions and Scaling Question Close Open Nominal/ Categorical Rating Scale Yes/No Multiple Choice Ordinal Interval Ratio Analysis CS46 Creating Questionnaire Creating a Questionnaire • Developing well-crafted questionnaires is wellmore difficult than it might seem • Carefully consider the type, content, wording, wording, and order of the questions that they include CS47 Sample Sample Customer Survey CS48 Source: California State University Long Beach Customer Customer Satisfaction Surveys Surveys 1. Survey Objectives and Project Planning Project Planning Sampling & Survey Options Designing Surveys Conducting Surveys Surveys Analysis & Reporting CS49 2. 3. 4. 5. Conducting Surveys Conducting Surveys • Make a plan that outlines how and to whom you will administer it • There are a number of options available in order to find relevant sample group order to find a relevant sample group amongst amongst your survey population • Various considerations involved with administering the survey itself CS50 Collecting Data Collectin 1. What is the appropriate survey Method for What is the appropriate survey Method for my my purpose? How many completed surveys do I need? Who will collect the data? Are they trained? CS51 2. 3. 3. 4. Data Data Collection 1. Daily end-of day follow-up & endfollow- corrective actions, as necessary ti 2. Timely data entry 3. Proper records maintenance CS52 Customer Satisfaction Surveys Customer Satisfaction Surveys 1. Survey Objectives and Survey Objectives and Project Project Planning Sampling & Survey Options Designing Surveys Surveys Conducting Surveys Analysis & Reporting 2. 3. 4. 5. CS53 Analyzing Survey Results Analyzing Survey Results • Knowledge of statistics and computer software packages • Define the scope of your study • The audience to whom you wish to direct the work the work CS54 Processing the Results Processing the Results • Use a computer to help sort and organize the data th • Editing should be the first step to processing this Editing should be the first step to processing this data. data. At the same time, editing can reduce the bias, increase the precision and achieve consistency between the tables consistency between the tables • Charts and graphs are clear, visual ways to record Charts and graphs are clear, visual ways to record findings findings in many cases • you might use a response rate graph to make the th process easier CS55 Excel Statistical Functions Excel Statistical Functions Useful Excel Functions for Survey AVERAGE COUNT COUNTIF MAX MEDIAN MIN MODE PERCENTILE QUARTILE STDEV SUM VAR CS56 Analyzing the Results Analyzing the Results • Different formulas needed in order to properly analyze the survey and obtain statistical ana th significance. significance. Use computer programs! • The results must be assembled in some useable format that allows comparison within the survey group between groups or both the survey group, between groups, or both The results could be analyzed in number of • The results could be analyzed in a number of ways: ways: – T-test – A matched T-Test matched – ANOVA CS57 Common Common Tools for Survey Analyses Analyses 1. 2. 3. 4. 5. Descriptive statistics Charts & Graphs Histogram & Pareto Charts Comparative Analysis & Charts Ch Customer Satisfaction Index CS58 Reporting Results Reporting Results 1. Keep project owner aware of developments developments and results throughout the project Relate reporting to the study purpose Conclude with follow-up action followplan Thank and feedback participants! CS59 2. 3. 4. Common Reporting Pitfalls Common Reporting Pitfalls 1. Non-actionable results. Non2. Including non-value-added (fancy) non-value- charts and graphs charts and graphs. 3. Not following good report Not follo good report writing/structure writing/structure practice. CS60 Key Key Success Factors 1. 2. Plan ahead! Involve those involved all the th th time! Do it with the right team at the right time Maintain good control of data Feedback of results and Feedback of results and improvements improvements is essential CS61 3. 4. 5. Advantages Advantages and Disadvantages of Th The Survey Method Strengths Relatively inexpensive Useful in describing the characteristics of a large population Can be administered from remote locations Consequently, very large samples are feasible Man Many questions can be asked about a given topic giving considerable flexibility to the analysis • Several options for administering the survey • Standardized questions make measurement more precise Standardized questions make measurement more precise by by enforcing uniform definitions upon the participants • Standardization ensures that similar data can be collected from groups then interpreted comparatively (between group from groups then interpreted comparatively (between-group study) study) CS62 • • • • • Advantages Advantages and Disadvantages of The The Survey Method Weaknesses • A methodology relying on standardization requires general questions general to be appropriate for all respondents and missing what is most appropriate to many respondents • Inflexible - - requires the design to remain unchanged throughout the data collection • Difficult to have a large number of the selected sample reply Hard for participants to recall information or to tell the truth • Hard for participants to recall information or to tell the truth about about a controversial question CS63 In In-Depth Interviews Interviews CS64 InIn-Depth Interviews • In-depth interviews are one-to-one Inone-tointerviews • Objective: Develop a very broad understanding of the customer-supplier th relationship • Respondents must represent a wide Respondents must represent wide spectrum: spectrum: • In planning, consider the following: planning consider the following: – Customers – Experts and influencers and influencers – Sampling CS65 Conducting InConducting In-Depth Interviews • Recruiting respondents: – Objectives of the interview, including benefits to customers – How the interview will be conducted the interview will be conducted – What will happen after the interview • Suggested approach: – Ask questions about their business and market place – Move the discussion to their company’s usage of the th di th th product or service in question – Move on to the more substantive topics to cover your exploratory research objectives CS66 Topics Topics for In-Depth Interviews In1. The purchase decision and DMU (Decision Making Unit) 2. Supplier evaluation 3. Purchasing criteria 4. Priorities 5. Supplier performance 6. Relative performance 7. Future trends CS67 Focus Groups CS68 Focus Focus Groups • Purpose: to improve understanding of all aspects aspects of the customer-supplier customerrelationship Most commonly used in relationship Most commonly used in consumer consumer markets than in business markets Discussions involving six to eight customers led by an experienced facilitator They last for up to two hours last for up to two hours Take place at a neutral place Usually recorded or videoed recorded or videoed CS69 • • • • Recruiting Recruiting Focus Groups • • • • • • • • Qualify respondents before inviting them Offer an incentive Target databases by mail or telephone Advertise in special interest magazines Naming the focus group adds value and make it Naming the focus group adds value and make it more more meaningful Proper sampling Recruit more members than you need in case of nono-show Retain participants’ information for future research participants information for future research CS70 Focus Groups Focus Groups Next Steps: Steps: • • Arranging the venue Conduct focus groups – Welcome and agenda – Brief respondents to what is expected – Explain technical terms, if applicable – What feedback respondents would expect – Start with easy topics – Identify the supplier – Gather experiences and views of participants about the supplier List all mentioned customer priorities CS71 • A Comparison of In-Depth Comparison InInterviews Interviews and Focus Groups InIn-Depth Interviews • • • • • • • • • • One-to-one interviews interviews More convenient for business Usually held on respondents’ premises No fee for respondents Costly on interview time Medium skill level required skill le req Few respondent reservations 60 minutes’ duration Usually interviewer driven interviewer driven Can be recorded on audio • • • • • • • • • • Focus Groups Group discussion with Group discussion with 6-8 people people Attractive for consumers Held in hotel or special place Incentive for participants Costly on recruitment Skilled facilitator essential May be some inhibitions initially 90 minutes’ duration Usually drawn by group dynamics dynamics Can be videoed and viewed CS72 Sources and References Sources and References 1. Shawna Jackson, Karen Marcus, Cara McDonald, Timothy Wehner, and Mike Palmquist. (2005). Introduction to Statistics. Colorado State and Mike Palmquist Introduction to Statistics Colorado State University. University. Retrieved March 2007 from http://writing.colostate.edu/guides/research/stats/ 2. Evans and Lindsey, The Management and Control of Quality, 6th The Edition, 2005 3. Hill and Alexander, Handbook of Customer Satisfaction and Loyalty Handbook Measurement, 2nd Edition, Gower, 2000 CS73 Discussion CS74 ...
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This note was uploaded on 08/22/2010 for the course ESI 6224 taught by Professor Ahmadelshennawy during the Spring '10 term at University of Central Florida.

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