Many companies are systematically measuring how well they treat their customers, identify ing the factors shaping satisfaction, and making changes in their operations and marketing as a result.
For example, Wachovia Securities employs mystery shoppers to assess how well employees are satisfying customers, linking part of employees’ compensation to their ratings. The emphasis on customer service seems to be working—a research study by Brand Keys during the first quarter of 2006 found that Wachovia did a better job of meeting the expectations of its loyal customers than any other bank.?’
A company would be wise to measure customer satisfaction regularly, because one key to customer retention is customer satisfaction.
A highly satisfied customer generally stays loyal longer, buys more as the company introduces new products and upgrades existing products, talks favorably to others about the company and its products, pays less attention to competing brands and is less sensitive to price, offers product or service ideas to the Company, and costs less to serve than new customers because transactions can become routine.
Greater customer satisfaction has also been linked to higher returns and lower risk in the stock market. The link between customer satisfaction and customer loyalty, however, is not proportional. Suppose customer satisfaction is rated on a scale from one to five.
At a very low level . of customer satisfaction (level one), customers are likely to abandon the company and even bad-mouth it. At levels two to four, customers are fairly satisfied but still find it easy to ° switch when a better offer comes along.
At level five, the customer is very likely to repurchase and even spread good word of mouth about the company.
High satisfaction or delight creates an emotional bond with the brand or company, not just a rational preference. Xerox’s senior management found out that its “completely satisfied” customers were six times more likely to repurchase Xerox products over the following 18 months than its “very satisfied” customers.3} an ‘
When customers rate their satisfaction with an element of the company’s performancesay, delivery—the company needs to recognize that customers vary in how they define good performance.
Good delivery could mean early delivery, on-time delivery, cs. . completeness, and so on. The company must also realize that two customers can repor being “highly Satisfied” for different reasons. One may be easily satisfied most of the time and the other might be hard to please but was pleased on this occasion.
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