2.2 Literature research reflection

High customer loyalty is one of the most important indicators of good performing companies. Since customer satisfaction is directly linked to customer loyalty it is evident that measuring customer satisfaction without taking customer loyalty into account and vice versa would be misleading.

What is needed is a way of measuring customer satisfaction in an inter-relational environment where relevant factors for determining satisfaction and also loyalty are measured simultaneously. This is best done using a causal model approach where the drivers of satisfaction as well as its resulting effects on loyalty are explicitly introduced. The approach outlined below offers such a framework.

Customer satisfaction is a multidimensional concept. It is a highly personal matter for the customer, which is influenced by a number of factors. Measurement of customer satisfaction thus needs to take a number of interrelated factors into account. In this approach the analysis is based on applying a micro economic model for determining satisfaction.


2.2.1 Which are the criteria for appraisal of customer satisfaction and how to classify these into antecedents?

Satisfaction is an overall customer attitude towards a service provider, or an emotional reaction to the difference between what customers anticipate and what they receive, regarding the fulfilment of some need, goal or desire. Satisfaction represents a veritable key of modelling the acquisition behaviour of the customer, being supported by three groups of variables:

  1. Cognitive variables, based on the qualitative superiority of the products given by the performance.
  2. Affective variables, based on the emotions produced to the customers.
  3. Conative variables, based on the interaction between the provider and the customer in the buying act.

The findings and answer to the first central question is segregated over the following four sub questions. Which general characteristics of customer satisfaction can be defined?

General characteristics involve features or qualities related to customer satisfaction serving to identify this phenomenon among other customer relationship management propositions.

  1. Customer satisfaction is a highly variable personal assessment that is greatly influenced by individual expectations based on his/her own information, expectations, direct contact and interaction, and circumstances (time, location and environment).
  2. Customer satisfaction involves the sum of personal (product and service) experiences driven by its antecedents.
  3. Customer satisfaction is most often related to purchase, loyalty and retention behaviour with a effect on an organizations profitability.
    • A totally satisfied customer contributes 2.6 times as much revenue to a company as a somewhat satisfied customer.
    • A totally satisfied customer contributes 17 times as much revenue as a somewhat satisfied customer.
    • A totally dissatisfied customer decreases revenue at a rate equal to 1.8 times what a totally satisfied customer contributes to a business.
  4. Customer satisfaction characterizes itself by a high degree of word-of-mouth where satisfied customers are most likely to share their experiences with other people to the order of perhaps five or six people. Equally well, dissatisfied customers are more likely to tell another ten people of their unfortunate experience. Which criteria can be drawn from the theory of customer satisfaction?

A criterion for this purpose is seen as dimensions for the customers' satisfaction assessment. I have drawn the following 23 criteria from the theory as studied:

  1. Product quality
  2. Product functionality
  3. Product availability / range
  4. Product knowledge
  5. Accessibility / location
  6. Access time / opening hours
  7. System of access
  8. Service provision
  9. Brand / company reputation
  10. Brand / company status
  11. Brand / company assurance
  12. Competitive price level
  13. Negotiation /discount policy
  14. Terms of payment
  15. Perceived value
  16. Accuracy of service
  17. Dependability of service
  18. Promptness of service
  19. Competence and treatment
  20. Employee behavior
  21. Operational performance
  22. Expected value
  23. Service degree How to classify the criteria of customer satisfaction into antecedents?

The criteria can be classified in multiple groups which could fulfil a significant antecedent function in causal models towards customer satisfaction. See figure 11.

Clasification of customer satisfaction criteria

Figure 11. Clasification of customer satisfaction criteria.