Executive summary

My literature study and empirical research took off with the assignment of developing a customer satisfaction model for a commercial B2B trading company. Any organization, whether B2B or B2C, has to listen to its external customers and stakeholders. A number of studies have shown that the long-term success of a corporation is closely related to its ability to create and maintain loyal and satisfied customers, adapt to customer needs and changing preferences. Customer satisfaction is a crucial goal for most organizations. In order to monitor customer satisfaction, and to take action for improving it, a number of different methods have been developed and tested. However, for the purpose of developing tangible applications for results a number of criteria have to be fulfilled in any such measurement system, not least if the ambition is to compare and benchmark. This is the spirit in which the research initiative of customer satisfaction was initiated.

With my research I aim to recommend a customer satisfaction model and an advice for further improvement on the design of the B2B customer satisfaction process. To this end, causal models are assessed and compared on the bases of the criteria and antecedents of customer satisfaction. To guide me through the process of research, I have reflected my logical and sequential steps in a conceptual model of research. This conceptual model starts with studying of scientific theories and concepts of customer satisfaction, studying of academic papers, thesis and dissertations, to create a common understanding of customer satisfaction. In the research the emphasis lays on customer satisfaction and antecedents where the Rovaha Brand Equity (RBE) model applies. The RBE model is used to classify the collected data onto the criteria and to keep the research synoptic. To fulfil my research I have formulated the following questions:

  1. Which are the criteria for appraisal of customer satisfaction and how to classify these into antecedents?
  2. Which are the interdependencies of customer satisfaction models?
  3. What are the results of the comparison of different causal customer satisfaction models?
  4. Which recommendations can lead to improvement of customer satisfaction and the effectiveness and efficiency of business development?

Quite often fundamental causal modelled interdependencies among B2B customer satisfaction processes are lacking. Instantly this makes it difficult to point out the antecedents and relationships of customer satisfaction. Estimation of the extent of customer satisfaction is habitually based on the collective interpretation of customer complaints handled as administrated and individual interpretation of face-2-face meetings between employees and customers. For that reason statistical confidence, accuracy and representativeness easily lack quantitative significance and lead to unreliable quantitative trend analyses.

Take the above in mind and it is not hard to imagine that a lack of a customer satisfaction model and the nonexistence of a well-defined questionnaire could have a negative effect on the development of sustainable and recurring business. For that reason organisations could definitively take advantage of a proven systematic customer satisfaction process. The challenge for organisations is to implement and secure a standardized customer satisfaction process across their class of markets and geographic markets (countries). Customer satisfaction is addressed as a strategic business development tool. Ultimately it will lead to more loyal customers and more profitable business.

My literature research has revealed that customer satisfaction can be defined as 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; cognitive variables, affective variables, conative variables. The groups built up the interface where latent variables, such as corporate image & brand image, customer expectations, perceived product value, perceived service value, perceived value, commitment, customer satisfaction, and customer loyalty are developed or even damaged.

Customer satisfaction is addressed as a strategic business development tool. Customer satisfaction does have a positive effect on an organization’s profitability, satisfied customers form the foundation of any successful business as customer satisfaction leads to repeat purchase, brand loyalty, and positive word of mouth. 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. Research has demonstrated that even a difference between a totally satisfied customer and a somewhat satisfied customer could lead to an increased revenue contribution of a factor 2.6.

My literature study has delivered an extensive source of customer satisfaction knowledge. I have chosen for a qualitative empirical research study taken from a singular desk research angle which incorporates a study of academic papers, thesis and dissertations in customer satisfaction and customer satisfaction models. My literature research exposed four general characteristics of customer satisfaction involving features or qualities related to customer satisfaction serving to identify this phenomenon among other customer relationship management propositions;

  • Customer satisfaction is a highly variable personal assessment that is greatly influenced by individual expectations based on their own information, expectations, direct contact and interaction, and circumstances (time, location and environment).
  • Customer satisfaction involves the sum of personal (product and service) experiences driven by its antecedents.
  • Customer satisfaction is most often related to purchase, loyalty and retention behavior with an effect on an organizations profitability.
  • 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.

Desk research have shown fundamentally similarities among the four most known causal customer satisfaction models (SCSB, ACSI, NCSB, ECSI). All models have an academic/scientific, causal construct. The purpose of each customer satisfaction construct is to be a structural equation model for standard measurement for evaluation of customer satisfaction based on a set of latent variables determined by a set of manifest constructs. Each latent variable is measured, the level of each latent variable estimated, the relevant connections between the latent variable established and the magnitude of the connections estimated. The objective of all customer satisfaction models is to provide results that are relevant, reliable, and valid and have predictive financial capability. Nevertheless they have some obvious distinctions in model’s structure and variable’s selection so that their results cannot be compared with each other. Therefore, adoption of a model needs to be guided by a set of objective selection criteria, so called user requirement specifications.

It is important to realize that many customers will not complain and this will differ from one industry sector to another. In other words, we often are not aware of the extent of satisfaction / dissatisfaction as long as we do not ask. Customer satisfaction research should be done with greatest care. Measuring customer satisfaction must be a continuously, consistent, timely, accurate and reliable process. Organisations need to undertake direct action to avoid serious hindrance of their business development over the coming years. Organisations will not succeed by simply doing more of what they are doing now; organisations need to do some things differently to differentiate themselves. This is where a customer satisfaction approach becomes a powerful strategic business development tool.

Theory and best practices have proven that sustainable customer satisfaction models needs to be built on well-defined transparent processes and on a consistent approach. The means by which (customer) satisfaction is build may differ from time to time and from customer group/segmentation, whether this is based on geographic zone, business unit, country, product, or demographic culture is not relevant as long as accountable managers and marketers understand the relevance of each model latent and manifest variable in relation to the target group. As a consequence of the above, organisations would benefit from a well-defined customer satisfaction model. I shall emphasis my advice and recommendation on a structured causal customer satisfaction model. For that reason I recommend organisations to carry out the following strategic proposition;

  1. Implement a causal customer satisfaction model.
  2. Standardize (multi lingual) survey questionnaire.
  3. Secure process ownership and process managers.
  4. Customer satisfaction survey on a monthly base.
  5. Standardize process flow and reporting structures.