1、“Another satisfied customer!”,Think of an incident in which you were “surprised and delighted” as a satisfied customer. How did that happen? Think of another situation where you were very disappointed as a customer, and you did not return or you told others about your negative experience. How did th
2、at happen?,Customer Satisfaction,Customer satisfaction means money!,A study in the Harvard Business Review showed that just a 5 percent increase in customer retention boosts profits by 25 percent to 125 percent. Winners of the Malcolm Baldrige National Quality Award ( heavily oriented toward custome
3、r satisfaction) outperform the Standard & Poors 500-stock index by 3:1 in ROISears, Roebuck operates on a financial model which shows that a 5 point improvement in employee attitudes will drive a 1.3 point improvement in customer satisfaction, which in turn will drive a 0.5 percent improvement in re
4、venue growth. The model also established that 4 percent improvement in customer satisfaction translates into more than $200 million in additional revenues.,The lifetime value of a supermarket customer is estimated at $250,000IBM in Rochester, Minn., calculates that a 1 percent increase in customer s
5、atisfaction is worth $257 million in additional revenues over five years.Marriott found that each percentage point increased in the customer-wide satisfaction measure of intent-to-return was worth some $50 million in revenues.,Customer (dis)satisfaction,96% of dissatisfied customers never complain t
6、o the business, but 91% will not make return purchases70-85% of dissatisfaction is due to customer service not product; 68% of customers who stop buying do so because they perceive an employee as discourteous or indifferentdissatisfied customers on average tell 12 friends of the poor service; satisf
7、ied people tell 5 friends (2:1 ratio)70% will return if complaint is resolved, and 95% of customers would do business again if a problem is resolved quickly and effectivelyhighly effective companies spend 10% of their operations budget on fixing problems related to customer complaints; ineffective o
8、nes spend 40%,the average business loses 10-30% of its customers each year (without knowing which, when or why lost)its more costly to win a new customer than to lose an existing one (5-7 times greater); it takes 12 positive incidents to make up for a negative oneCustomers are three times more likel
9、y than service providers to recall the quality of the personal element in a transaction,More (dis)satisfaction Facts,People who complain are generally younger, have higher incomes, are better educated, have more experience with the product, are less brand loyal, and may have higher expectations,For
10、every complaint there are an estimated 25 unnoted complaints75% of complaints reported to front line person do not get reported to managementOnly 20% of complaints are directed to the manager by customers800# doubles calls to corporate, but only 1 per 100/500 get addressed by a senior executiveQuick
11、 resolution results in higher satisfaction Fortune magazine found that the companies with the happiest employees also produced the highest returns to shareholders by a substantial margin, 27.5 percent vs. 17.3 percent for run-of-the-mill companies.,Financial Perspective,Customer Perspective,Operatio
12、ns Perspective,Learning & Growth Perspective,Key Elements of the Balanced Scorecard,Customer Satisfaction,Increased Word of Mouth reputation of business effective advertisinghelp introduce new products via instant awarenesslower buyers risk of trial+ relationship with key suppliers, distributors & a
13、lliesenhance halo effectinsulate against short term adverse events,Repeat Sales frequent purchases purchase volume other goods/services switching, price elasticity (tolerate price increases) transaction costs (not spend as much to attract new customers) product failure costs resources due to handlin
14、g & returning reworking defective items, handling complaints,Customer Satisfaction,Higher Profit Margins!,Price Elasticity,Price change causes change in demand,American Customer Satisfaction Index, is based on a quarterly survey by the National Quality Research Center at the University of Michigan b
15、usiness school, in partnership with the American Society for Quality, a professional group in Milwaukee, and Foresee Results, an Internet tracking firm. It focuses on different sectors of the economy ranging from autos to household appliances to government services to grocery items.,ACSI results pro
16、vide: an economic indicator of the quality of economic output calculation of the net present value of their companys customer base as an asset over time information for strategic business applications a predictor of consumer spending & corporate earnings,Customer expectations influence the evaluatio
17、n of quality and forecast (from customers pre-purchase perspective) how well the product or service will perform.,Perceived quality refers to overall quality, reliability, and the extent to which a product or service meets the customers needs; this shows the greatest impact on customer satisfaction.
18、,Perceived value is measured through overall price given quality and overall quality given price; it has somewhat less impact on satisfaction and repeat purchase.,Customer complaint activity is measured as the percentage of respondents who reported a problem with the measured companies product or se
19、rvice within a specified time frame; it has an inverse relationship to customer complaints.,Customer Retention is measured by likelihood to purchase a companys products or services at various price points. Customer satisfaction has a positive effect on retention, but the magnitude of that effect var
20、ies greatly across companies and industries.,ACSI Components,Courtesy & respect vs. dissatisfaction,Hopes wont dissatisfy, but can increase loyalty,Proactive in suggesting things a customer can benefit from,Tells you what is important, resulting in (dis)satisfaction,Proctor & Gambles Pampers product
21、 had 13% market share in Hong Kong. They went on a massive campaign to gather the names and addresses of mothers and babies through highly successful cash back sales promotion activities. To get the cash back, mothers had to write in with full name and address details, as well as the babies birth da
22、te and sex. Using this information they wrote to the mothers on a quarterly basis, telling them of their babies growth and what to expect at the various stages. They also sent out discount vouchers when it was time to buy the next size up, so that the nappies always performed well.Within 14 months (
23、the fifth cycle of the ever-growing list of mothers) Pampers had moved to the number one position with 49% market share. Each percentage point was worth US$1million over the life usage of the product. Thats $29mil just by staying in touch with the same base, within 3 months over and over.,Pampering
24、Customer Loyalty,Rokeachs Instrumental & Terminal Values (1973),Terminal,Instrumental,Basic design of the Hierarchical Values Map for Means-Ends Chain Analysis,Values: abstract consequences, valued end-goals:I am helpful & caring,Psychosocial consequences: psychological & social outcomesI can tell o
25、thers,Functional consequences: tangible outcomes of product usegives me useful information,Attributes: product characteristics & featuresEditorial content & articles,“Why is it important? What does it give to you? What is negative about it? What do you want to avoid”,Laddering for promotional strate
26、gy,Laddering: Hierarchical Value Map for Wine Coolers,carbonation,crisp,expensive,Label (fancy),Bottle (shape),Less alcohol,Filling,Smaller size (10 oz.),Refreshing: Feel alert & alive,Quality: Superior product Superior quality,Consume less:cant drink more Can sip,Thirst quenching: Relieves thirst N
27、ot too sour,Sophisticated image: Personal status How others view me,More feminine: Socially acceptable,Avoid negatives of alcohol: Not too drunk Not too tired,Avoid waste: Doesnt get warm,Reward: Satisfying compensation,Socialize: Easier to talk Open to More sociable,Family life Maintain respect Bet
28、ter family ties,Belonging: Security Camaradarie Friendship,Impress others: Successful image,Accomplishment: Get most from life,Self esteem: Feel better about self Self image Self worth,Consumer decision-making map for express mail delivery,Laddering practice:form pairs (or triads) and take turns con
29、structing value ladders for each others purchasesidentify some product you purchase to which you have had some degree of brand loyalty over the years.start by describing the attributes of the productthen link those to the benefits you obtain from itthen link to the (instrumental) values it satisfiesand finally, link to the terminal values it supports,
