Customer satisfaction is paramount

Customer satisfaction is paramount

By Handi Irawan D

JAKARTA (JP): A researcher once noted that in the 1980s,
published articles on prepurchase were eight times those on
postpurchase.

During the 1990s, the trend was reversed and the number of
articles on both subjects were almost equal.

If the trend continues, the number of postpurchase articles
will eclipse those on prepurchase in the coming years. This is in
line with the reality of the business world where more companies
are focusing on customers' emotion, attitude and behavior after
transactions in devising their business strategies.

More companies are now aware that customer satisfaction and
loyalty are fundamental to their survival and growth.

Tougher competition in almost all industries has meant greater
cost of attracting new patrons.

This is why companies that are preoccupied obtaining new
customers will have problems of profitability.

Customer retention should instead be the main program. In
other words, it is better to retain existing customers than to
seek new ones.

Satisfied customers are usually loyal patrons. This loyalty
ultimately is the determinant of a company's market share and
profitability.

Why? First, loyal customers are those who will bring more
business in the future. Second, loyal customers usually are less
sensitive to prices, and even ready to pay the premium price.

Third, loyal customers are those who will recommend the
products to potential customers -- which of course means free and
effective advertisement for the producer. Forth, the more loyal
customers a producer has, the more efficient and effective will
its marketing programs be.

What causes customer satisfaction?

I believe there are five main "drivers" of customer
satisfaction. The first driver is product quality, which covers
the following six elements: performance, durability, feature,
reliability, consistency and design. For instance, a customer
will be satisfied with a newly bought TV set that has quality
sound and picture, various features, no technical problems and an
attractive design.

The second driver is price. For some customers, low prices are
a source of satisfaction as it means they are getting a high
value for their money. This particular component, however, might
not be too important for those who are not price-sensitive.

Quality and prices, however, are often not enough to bring
about customer satisfaction. It is fairly easy to imitate the two
aspects. With current standardized technology, any company can
produce goods of equal quality as those of a competitor.

This is why more companies are relying on the third driver,
service quality . This particular drive depends on the following:
the system, technology and human factor. The last factor accounts
for about 70 percent of service quality.

Influencing the attitude and behavior of customers is not
easy. Companies would need to create suitable recruitment and
training procedures, and working culture, although the fruits of
such an investment would only be evident after three years.

Service quality is a driver that has many facets. One of the
most popular concepts is known as ServQual, which contends that
service quality has the following five dimensions: reliability,
responsiveness, assurance, empathy and tangibility.

Quality service is one that is reliable, makes no mistakes in
keeping record and keeps its promises. Quality service is also
one that responds quickly so there is no long queues. Assurance
is the ability of company workers in answering customer queries,
and in their manners and fairness to customers.

Empathy is the company's ability to understand customers'
specific needs, and to create a personal approach and
relationship. Tangibility is an important dimension because,
unlike goods, service is something that is intangible. This is
why many customers depend on some tangible aspects, such as the
building or the workers' uniform, to judge a company's service
quality.

The fourth driver, which is the emotional factor, is important
for certain life style-related products such as cars, cosmetics
and clothing. Customer satisfaction can be elicited by a brand
image. There are many wristwatches, which cost US$100, that are
of the same quality as those costing $2000. But some customers
would choose the latter because of the emotional satisfaction
that comes from wearing the brand.

Pride, confidence and the belief that owning and wearing the
$2000-watch is a symbol of success is an example of the emotional
values that affect customer satisfaction.

The fifth driver is access to the products and service.
Customers will be more satisfied if the product is readily
available and easy to purchase.

Quite a number of customers have complained about the poor
service of BCA banks, but the general level of satisfaction with
these banks is still relatively high. This is supported by the
fact that the bank's ATMs are available in most places. Although
the bank's savings interests are not exceptional, it has the most
number of customers because it is very accessible.

No company will be able to draw up their business strategy and
increase customer satisfaction only by knowing the five drivers.
The next step is to weigh each driver in the creation of customer
satisfaction.

Industries dealing with commodities find prices the most
important factor. In the print media such as newspapers, tabloids
and magazines, product quality is the most important factor. For
hotels, hospitals and banks, service is the most important
factor.

A good market survey can help determine the weight of each
driver for an industry. Customers must be asked how significant
each driver is to them. It is also important that companies learn
the customer satisfaction level of their competitors -- something
that is needed to ascertain their position on the customer
satisfaction scale.

On the question of customer satisfaction, it is not the
absolute index that is important, but whether your index is
higher than that of your competitors.

The writer is the managing director of Frontier Marketing and
Research Consultant.