5.1.1 The Swedish Customer Loyalty Barometer (SCSB)

The original SCSB model (Fornell, 1992), shown in Fig. 14, contains two primary antecedents of satisfaction: perceptions of a customer's recent performance experience with a product or service, and customer expectations regarding that performance. More specifically, perceived performance is equated with perceived value, or the perceived level of quality received relative to the price or prices paid. Quality per dollar, or value, is a common denominator that consumers use to compare brands and categories alike (Emery, 1969). The basic prediction is that as perceived value increases, satisfaction increases.

The original Swedish Customer Satisfaction Barometer model

Figure 14. The original Swedish Customer Satisfaction Barometer model.

 

The other antecedent of satisfaction is how well the customer expected the product or service to perform. Customer expectations are defined as that which a customer predicts ("will" expectations) rather than a normative standard or benchmark ("should" expectations; Boulding et al., 1993). These expectations are argued to positively affect customer satisfaction because they serve as cognitive anchors in the evaluation process (Oliver, 1980). While perceived performance captures more recent experience, customer expectations capture a customer's prior consumption experience with a firm's products or services as well as advertising and word-of-mouth information. Because expectations forecast a firm's ability to provide future performance, it is argued to have a positive effect on satisfaction in the SCSB model (Fornell, 1992). Finally, expectations should be positively related to perceived performance (value). This captures customers' abilities to learn from their experience and predict the level of performance they will receive.

The consequences of satisfaction in the original SCSB model are derived from Hirschman's (1970) exit-voice theory. The theory describes situations in which a client or customer becomes dissatisfied with the products or services that an organization provides. The organization discovers its failure to provide satisfaction via two feedback mechanisms, exit and voice. The customer either exits, or stops buying from the firm, or voices its complaint of dissatisfaction to the firm in an effort to receive restitution. Accordingly, the immediate consequences of increased satisfaction are decreased customer complaints and increased customer loyalty. An increase in satisfaction should decrease the incidence of complaints. Increased satisfaction should also increase customer loyalty (Bloemer and Kasper, 1995), which is a customer's psychological predisposition to repurchase from a particular product or service provider. Loyalty is the ultimate dependent variable in the model because of its value as a proxy for actual customer retention and subsequent profitability.

Finally, the original SCSB includes a relationship from complaint behavior to customer loyalty. Although no prediction is made regarding this relationship, the direction and size of this relationship provides some diagnostic information as to the efficacy of a firm's customer service and complaint handling systems (Fornell, 1992). When the relationship is positive, a firm may be successfully turning complaining customers into loyal customers. When negative, complaining customers are predisposed to exit.

 

Table 3 Latent and manifest variables SCSB

Latent variables
Perceived performance
Perceived performance
Customer expectations
Customer satisfaction
Customer satisfaction
Customer complaints
Customer complaints
Customer loyalty
Manifest variables
Price paid for quality received
Quality received for paid price
Expectations of performance(as it will be)
Overall satisfaction
Fulfillment of expectations
Quantity of registered complaints
Complaint handling
Repurchase behavior

 

Table 4 Exogenous and endogenous variables SCSB

 
 Variable SCSB
Variable SCSB
Variable SCSB
Variable SCSB
Exogenous variables
Customer expectation
 
 
 
Endogenous variables
Perceived quality
Customer satisfaction
Complaint
Customer loyalty