Juran and Godfrey (1999) defines customer satisfaction as “A state of affairs in which customers feel that their expectations have been met by the product features.”
In the view of Szwarc (2005),
“customer satisfaction is how customers view an organization’s products or services in light of their experiences with that organization (or product), as well as by comparison with what they have heard or seen about other companies or organizations.”
Szwarc (2005) means that while the customer satisfaction is based partly on what they have heard or seen of other companies and products, these impressions of others should be included in customer satisfaction research, something that is very commonly overlooked.
The attention to customer satisfaction grew slowly during the 1960’s and 70’s before accelerating in the 80’s and taking off in the 90’s. Before the 80’s, there was little focus on customer service and customer satisfaction and the discussion was rather about whether customers bought products or if the products were sold to them (Szwarc, 2005). In the 1980’s, people like William E Rothschild of the US General Electric Corporation realised that customer service could not only be a support for business, it could be a strategic advantage.
Market research methods started to emerge, increasing the focus on customer satisfaction.
(Szwarc, 2005). At the same time, the Japanese got recognition for their efforts towards increased customer satisfaction and lowered costs through keeping defects at a minimum. The
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efforts of the Japanese had begun already in the 50’s however, inspired by Joseph M. Juran and others (Kondo & Kano, 1998). The awareness of the importance of customer satisfaction was spreading at several fronts, although the driving forces were different in nature in different places. In the 90’s there was a further push forward through the concepts of balanced scorecards and customer relationship management (CRM) (Szwarc, 2005). The balanced scorecards allow managers to take customer satisfaction into consideration as a key indicator of business performance, instead of as traditionally just monitoring financial measurements.
CRM made it possible to, through improvements in IT technology, keep records of customer behaviour and thereby customize offers and communication. Today, many corporations have realised the importance of the customers and become customer-centric. When working with improving the satisfaction of our customers, one challenge is how to evaluate it. What methods should be used and what are the important measures.
Bäckman and Olin (1995) state that one should not stay with evaluating customer satisfaction.
They mean that a satisfied customer is one whose expectations are met. If the expectations are low, it will not be enough to meet the customer’s expectations. Instead, one needs to incorporate loyalty into the analysis.
When talking about repurchase intentions of customers, there are two terms that commonly appear: loyalty and retention.
“Loyalty is about a customer’s intention or predisposition to buy, but retention is the actual act of buying again. Retention is a stronger measure than loyalty. It can also be measured using internal company data, while loyalty usually has to be measured through market research surveys.”
Johnson and Gustafsson (2000)
An interesting feature about customer satisfaction and loyalty was found by Xerox corporation who, by analysing customer surveys including over 500 000 responses, found that loyalty rates were six times higher for customers who were completely satisfied (5 on a scale from 1 to 5) than for those who were only satisfied (4 on a scale from 1 to 5) (McCarthy 1997, see Szwarc 2005). Szwarc (2005) further elaborates on the results from McCarthy (1997) that satisfaction does not necessarily mean that customers are loyal and will stay with the
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company. It simply means that they do not have any negative feelings about the company providing the product and they do not have any special reason to leave them.
A significant contribution to the research on customer satisfaction was made by Noriaki Kano, who proposed a way of categorising different types of quality attributes. It was introduced in Kano et al (1984) and has since been discussed by many (see for instance Bergman and Klefsjö, 2003). Following Bergman and Klefsjö, the Kano model is based on three main categories of quality attributes: attractive quality, expected quality and must-be quality. The must-be attributes are things that the customer takes for granted and therefore will not ask for.
In the case of a new car today, an air condition system is must-be quality. If the must-be attributes are not there, the customer probably would be very dissatisfied, but if they are, they would not create very high satisfaction.
The second category contains the expected quality attributes. These are things that one knows can differ between products and that one is likely to ask for. If they are there and good, they can create high satisfaction and if they are not there, they will create dissatisfaction. The fuel consumption of a truck could be an example of expected quality. The better it is, the more satisfied you get.
Finally, attractive quality attributes are things that are positive, but that we would not have thought about and therefore not asked for. These attributes are often new technologies or new applications, but they could also be simple product or services. Attractive quality on a modern car could be for instance a USB memory in the key or some new type of compartment, but it could also be a free car cleaning kit or pre-programmed radio stations. The absence of this kind of factors will generally not create dissatisfaction, but having them can create very high satisfaction and they have a great potential of being mentioned to acquaintances of the customer.
The different categories are visualised in Figure, where one can see how the satisfaction depends on the degree of fulfilment for the different categories.
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Figure 3: The Kano model. Adapted from Bergman and Klefsjö (2003).
Ideas originally proposed by Kano (1984)