Customer Satisfaction and Loyalty: How to Get Them?

Introduction

The main goal of any business is undoubtedly consistent profit generation. That is why companies are increasingly becoming customer-focused. They are looking for innovative ways to attract more customers and retain existing customers. To achieve this, companies should mold their attitudes and products in order to gain customer satisfaction and loyalty. Satisfying a customer not only assures his priority for the company in future buying but also may make this customer recommend this company or product to others. To gain an idea of the importance of and the ways of achieving customer satisfaction and loyalty, it is essential to review various aspects such as human needs and attitudes, and their relation to customer satisfaction on a particular product, service, or company.

Human Needs

A customer may be an individual, group, or organization. However, understanding individual needs is important, as it is the key factor in buyer attitudes. An individual’s needs can be classified into five types. They are:

  • Physiological needs: Basic requirements of survival such as air, water, food, heat, etc (4:1).
  • Security needs A safe place to live with protection from elements and predators (4:1).
  • Social needs: These are related to interaction with others in one or form like marriage, friendship, etc (4:1).
  • Esteem needs: It arises from the desire to get recognized for laudable qualities (4:1).
  • Self-actualization: This is the top level in the hierarchy of needs that gives special and unique recognition for a person as the one in a million (4:1).

These needs often have a mutually complementing relationship with a person’s cultural attribute, attitude, and perception of things. These factors combine with a product or service attributes such as type, price, and brand to influence consumer behavior.

Literature Review

To further understand the aspects of customer satisfaction, it is useful to go through some important literature in which various dimensions of consumer attitudes have been studied and documented.

Koert van Ittersum (2000) studied the importance of the ‘region of origin’ for a product to better reach the customer. The author focused on the influence of this concept at various stages of the decision-making process in a purchase process (7: 1). The author described that the region may influence different stages like the need recognition stage, prepurchase search for information, perception, and evaluation of the product, selection among competing products, and product loyalty (7: 2-5).

It was stated that the region of origin refers to a ‘social group’ that the customer identifies with him/herself (7: 2). Successful attribution of a product to this origin improves the chances of its purchase (7: 2). However, quality and suitability are still important factors in determining a customer’s attitude. Though regional attribution enhances marketing opportunities, quality and relevance are crucial particularly when there are competing products with similar credentials (7:3). All in all, the author concluded that “marketers of regional products should target quality-conscious customers who can appreciate naturalness, craftsmanship and have a strong sense of belonging to the region” (7: 5). In this context, companies should concentrate on focus and differentiation than cost (7: 5).

Jos M. C. Schijns (2003) described the role of marketing channels in achieving customer satisfaction. The author focused on the relative importance of physical and remote channels in influencing customer attitude. According to the author, there are five key drivers of customer loyalty, namely overall customer satisfaction, trust, perceived switching costs, relationship proneness, attitudinal loyalty, and behavioral loyalty (6:2,3). While a company’s reputation and quality of product influence trust and loyalty; switching costs can be crucial when choosing an alternative relationship between the company and customer (6: 2,3).

The author documented the results of the questionnaire conducted to evaluate customer attitude and loyalty with regards to the medium of contact with the service provider (6: 4). The results indicated that human contact is crucial in building relationships between businesses and customers, as face-to-face interaction facilitates nonverbal communication (6: 7). Ignoring this social context may affect a company’s chances of gaining customer loyalty. However, remote service encounters are also important in attracting customers, as the selection of contact medium is not static and varies with situations (6: 7). Hence, it is important for companies to maintain adequate focus on both the physical and remote means of communication with the customer. Most importantly, the customer’s access to the company is as important as the company’s access to the customer (6: 8). As a whole, the study indicates that a company’s attitude should necessarily be in accordance with customer needs and expectations than assumed convenience for the company.

Yi-Ting Yu and Alison Dean (2001) conducted research on the relationship of customer satisfaction with customer loyalty. They opined that previous studies on the topic did not consider the influence of the emotional aspect on customer loyalty (9: 234). The key component of their hypothesis was that customer satisfaction had a positive relationship with customer loyalty (9: 235). Moreover, the cognitive and affective components of customer satisfaction have a positive relationship with customer loyalty (9: 237-238).

The authors conducted a survey among undergraduate students in business and economics and evaluated the responses using various parameters (9: 239). The study showed that the emotional aspect of satisfaction is a better predictor of loyalty than the cognitive component (9: 247). While positive emotions favor positive word of mouth and willingness to pay more and avoid switching behavior, negative emotions do the opposite (9: 247). Moreover, retaining existing customers is easier than attracting new customers. Accordingly, the authors further felt that adopting existing standard measures of customer satisfaction by companies may fail in enhancing customer loyalty, as these measurements do not consider the emotional component (9: 247). All in all, the study emphasizes the importance of emotions on customer attitude.

FGI Research conducted a study in 2004 to identify how well multi-channel retailers are meeting their customer needs (2: 2). They surveyed participants who had purchase from companies in five categories, namely department stores, gifts, apparel/accessories, toys/books/games, and electronics and computers (2: 2). The results gave a good idea of customer reactions to online shopping. Briefly, customers who preferred stores for product information were satisfied with purchases in stores, while customers who would do a web search for information were more inclined towards online shopping (2: 3). Also, frequent shoppers were well satisfied with online shopping than first-time buyers (2: 3). Above all, the authors pointed out that overall loyalty by maintaining value in customer’s views is more important than ‘bought’ loyalty in achieving acquisition and retention goals (2: 3). Paying heed to customer comments is essential for better marketing (2: 14).

Customer Characteristics

It is well known that attitudes and interests vary from person to person. Consequently, a product or marketing technique need not appeal to every customer. Hence, it is a must to have an idea of consumer types and expectations.

Customer Types

Classifying customers helps companies to divide them into categories called ‘market segments. The classification is made on various characteristics described below.

  • Demographic: It includes information about age, occupation, educational background, income, gender, and family size (3:1).
  • Geographic: It includes the place of living; such as country, rural or urban area, type of housing, etc. (3:1).
  • Benefit: It is about the intended benefit for a customer by opting to use a particular product or service (3:1).
  • Psychographic: Factors such as social class, personality, and lifestyle come under this category (3:1).
  • Behaviouristic: This contains details about the attitudes of customer groups such as purchase frequency, loyalty, etc. (3:1).

Being knowledgeable on such customer characteristics is very essential to craft and implement appropriate marketing strategies.

Customer Expectations

An organization called NSW Ombudsman described the expectations of customers receiving public sector services. Some of these expectations, with some modifications, are mentioned below, as they are generally applicable with regards to any product or service and very important for companies to consider while planning business strategies.

  1. People expect to be treated like they are valuable (5:1).
  2. Customers expect courtesy, respect, and honesty (5:1).
  3. They want timely and reliable service (5:1).
  4. They are concerned about the type and location of the product or service (5:1).
  5. Customers like fair and friendly treatment, and relevant advices and communication (5:1).
  6. They expect a sincere apology and fast corrective action in case of a faulty service (5:2).

Apart from these, it is evident from the studies mentioned earlier in the paper that the quality of the product is very important. Service and quality at par with the price and expectations are determining factors in gain market advantage over rival companies. Moreover, fair treatment by creating a sense of personal importance to the customer helps in enhancing the emotional attachment of the customer with the brand.

Achieving Customer Satisfaction and Loyalty

Retaining existing customers by creating a better impression is as important as attracting new customers, as customer satisfaction not only gets him/her back for another purchase but also helps in finding new customers through these existing customers.

Customer Satisfaction

Customer satisfaction can be defined as a function of affective influences which are integral to the customer and purchase-related cognitive factors (1:38). Customer satisfaction helps in the disappearance of the prepurchase perception of risk about the product (1:35).

It is important for companies to prefer customer-centric strategies to product-centric attitudes as a key for business improvement. Following recommendations can help in achieving this goal.

  1. Encourage face-to-face dealings: This helps in effective communication between the customer and service provider, and the alleviation of any apprehensions (8:1).
  2. Respond to inquiries promptly and keep your clients informed: Prompt response is very crucial. Even if the customer problem cannot be solved, a timely and efficient response assures the customer that he/she is important for the company and the company is working on the problem. Providing relevant and correct information enhances customer confidence (8:1).
  3. Be friendly and approachable: Maintaining a friendly, polite, and courteous attitude is a must to attract customer attention. The service provider should be easily reachable for the customer so as to address any customer concerns in an amicable ambiance (8:1).
  4. Have a clearly defined customer service policy: A lack of clarity in customer service may lead to unwanted frustration for the customer when an immediate response is required. Well-established customer service can effectively deal with contingencies (8:1).
  5. Attention to Detail: Try to make the customer feel valued by doing impressive things such as sending holiday greetings (8:1).
  6. Anticipate your customer’s needs & go out of the way to help them out: Though it is difficult to do all the time, trying to meet customer needs when the customer doesn’t actually expect makes him/her feel positive about the company’s service and refer others to the company (8:1).
  7. Honour the promises: It is an important point, as keeping up promises helps in enhancing customer reliability and satisfaction with the service (8:1).

Loyalty

As stated earlier, loyalty has a major role in attracting a customer for subsequent purchases. When the customer perceives a product or service as reliable and good for a price he/she may get satisfied with the purchase. And, when this satisfaction is sustained, the customer may approach the company for future purchases. A loyal customer of this type greatly helps the company by recommending the product or service to friends, colleagues, and others. However, as it is evident from various studies, it is important to consider that mere provision of a quality product may not be sufficient in enhancing customer satisfaction and loyalty. Factors such as emotional components should be addressed as a part of marketing strategy for maintaining better relationships with customer groups. The more a company becomes careful in addressing various decision-making stages of the customer’s purchase process; the better are the chances of improving customer loyalty towards the company or product.

Conclusion

The concept of customer satisfaction is a complex issue involving various aspects. Companies need to adopt better and innovative strategies to attract customers and improve their satisfaction. For customer loyalty greatly helps in rising profits for the company.

Works Cited

Erasmus, Alet, and Sune Donoghue. “Consumer Satisfaction-an Unattainable Deal.” Journal of Family Ecology and Consumer Sciences 1998: 35-42.

Freed, Lary. “Customer Satisfaction, Loyalty, and Buying Behavior in the Evolving Multi-Channel Retail World.” FORESEE Results 2005: 1-15.

“Identifying Consumer Types.” Marketing: 1. 2008. Web.

“Lesson-Consumer Buyer Behaviour.” Marketing Teacher: 1. 2008. Web.

“NSW Ombudsman: Expectations in Service Provision.” Public Sector Agencies Fact Sheet No. 24: 2005: 1-2. 2008. Web.

Schijins, Jos M. C. “Loyalty and Satisfaction in Physical and Remote Service Encounters.”2003.

Summary to Koert van Ittersum’s “The Role of Region of Origin in Consumer Decision-makingand Choice.” 2001.

Thompson, Adrian. “Customer Satisfaction in 7 Steps.” Sitepoint. 2002: 1. 2008. Web.

Yu, Yi-Ting, and Alison Dean. “ The Contribution of Emotional Satisfaction to Consumer Loyalty.” International Journal of Service Industry Management 2001: 234-250.