Customer Satisfaction and Loyalty

Study Notes

Customer satisfaction is the attitude resulting from the interaction between customer expectations and performance perceptions.
It is superior to service quality, as it includes evaluations of service quality, but also other factors such as price, convenience, and value.
Four elements influence customer satisfaction:
- Basic elements of the product or service that customers expect all competitors to deliver.
- Basic support services that make the product or service more effective and easier to use.
- A recovery process for counteracting bad experiences.
- Extraordinary services that excel in meeting customers' personal preferences, appealing to their values or solving their particular problems.
Factors outside the area of service, such as price, convenience, and value, also influence customer satisfaction and vary by industry.

Customer satisfaction is related to customer loyalty and organizational profits.
Customer loyalty can be seen as both an attitude and a behavior, or just a behavior.
One definition of customer loyalty is the proportion of times a customer chooses the same product or service in a specific category, compared to the total number of purchases made in that category.
A customer who continues to repurchase from an organization because of a lack of alternatives is not considered loyal.
Classic marketing literature defines loyalty as having both attitudinal and behavioral components, including attitudes such as intention to buy again, willingness to recommend, and lack of motivation to seek alternatives, and behaviors such as repeat purchases, positive word-of-mouth, and referrals.

The phrase "The customer is always right" is a myth and can be misleading.
Customers may make unreasonable requests, have unreasonable expectations, and sometimes not understand what a company can and can't do for them.
Instead, customers should be treated as if they are important, and their opinions, needs, and wants are worthy of listening to, and they deserve to receive maximum effort from those serving them.
The focus of customer service should be not only on what is provided to the customer, but also on how it is provided, to create a positive impression and meet customers' other important wants and needs.

Customer satisfaction is the attitude resulting from the interaction between customer expectations and performance perceptions.
It is superior to service quality, as it includes evaluations of service quality, but also other factors such as price, convenience, and value.
Four elements influence customer satisfaction:
- Basic elements of the product or service that customers expect all competitors to deliver.
- Basic support services that make the product or service more effective and easier to use.
- A recovery process for counteracting bad experiences.
- Extraordinary services that excel in meeting customers' personal preferences, appealing to their values or solving their particular problems.
Factors outside the area of service, such as price, convenience, and value, also influence customer satisfaction and vary by industry.

Customer satisfaction is related to customer loyalty and organizational profits.
Customer loyalty can be seen as both an attitude and a behavior, or just a behavior.
One definition of customer loyalty is the proportion of times a customer chooses the same product or service in a specific category, compared to the total number of purchases made in that category.
A customer who continues to repurchase from an organization because of a lack of alternatives is not considered loyal.
Classic marketing literature defines loyalty as having both attitudinal and behavioral components, including attitudes such as intention to buy again, willingness to recommend, and lack of motivation to seek alternatives, and behaviors such as repeat purchases, positive word-of-mouth, and referrals.

The phrase "The customer is always right" is a myth and can be misleading.
Customers may make unreasonable requests, have unreasonable expectations, and sometimes not understand what a company can and can't do for them.
Instead, customers should be treated as if they are important, and their opinions, needs, and wants are worthy of listening to, and they deserve to receive maximum effort from those serving them.
The focus of customer service should be not only on what is provided to the customer, but also on how it is provided, to create a positive impression and meet customers' other important wants and needs.

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