The importance of customer satisfaction in service organisations

Topics: Customer service, Customer satisfaction, Good Pages: 10 (2825 words) Published: April 22, 2004
Explain the importance of customer satisfaction in service organisations

The aim of this essay is to explain the importance of customer satisfaction in service organisations. Clear meaning of the customer satisfaction has been provided along with the causes and results from the effective implementation. J. Heskett's "service-profit chain" model has been used in order to understand the relationships between profitability of a service organisation with customer satisfaction and loyalty and the outcomes of this relationship. Examples has been illustrated based on the first five case study from Lovelock's book "Services Marketing: A European Perspective" (See appendix 1). Furthermore the identification of methods and techniques of customer satisfaction measurement has been illustrated. Finally techniques and strategies for customer satisfaction improvement have been discussed.

More and more service organisations nowadays recognise that customer satisfaction is crucial for business success. Additional, understanding and anticipating what customers want and require for the future, has led service organisations scrutinising for possible service features and managerial factors that will enable them to stimulate a positive response and astonish their customers. However, a question has been raised of which service attributes and qualities are decisive for the satisfaction of the customer and which features merely prevent dissatisfaction (Matzler et al., 1996) .

Various model have been developed attempting to clarify the meaning of customer satisfaction, what causes it and what results from it. J. Heskett et al. has developed the service-profit chain (appendix 2), which establishes relationships between profitability, customer loyalty and employee satisfaction, loyalty and productivity . Moreover, Kano's (1984) model of customer satisfaction (appendix 3) distinguishes between three types of product requirement, which influence customer satisfaction in different ways when met. Must-be requirements, one-dimensional requirements and attraction requirements (Matzler et al., 1996). Furthermore, in his journal "Customer satisfaction and the internal market: Marketing our customers to our employees", Nigel F. Piercy re-examines the belief that customer satisfaction lies at the heart of all the endeavours of all organizations by analysing the internal and external customer satisfaction, internal and external quality of service and the relationship between internal and external markets (Piercy, 1995) .

Although the models, mentioned above, have been useful materials for understanding the concept and meaning of customer satisfaction, for the purpose of this essay more attention will be given on J. Heskett's "service-profit chain" model, as little emphasis has been given to the service organizations by the other two models which have been concentrating more on customer satisfaction in relation to tangible products (i.e. Cars, PCs, etc.). However, there are companies that their core products are tangible such as "Sullivan's Motor World" but at the same time there are services that support these products (supplementary services) such as after sales support and service and there is a need to be studied also, as they are part of the organisation's overall process and will affect the customers' opinion for the company.

As it can be seen in appendix 2 there are several links in the service profit chain that have to be carried out effectively in order to bring about in generating customer satisfaction. The factors that have to be considered in each link along with their results either positive or negative will cause either customer satisfaction or dissatisfaction. For example, beginning from the first link, the internal service quality, and referring to "Sullivan's Motor World" case study, it can be realized that the lack of the appropriate workplace design in the service department along with the lack of new sophisticated computer...

References: 1.C. Lovelock et al., Services Marketing: A European Perspective, 1999, Prentice Hall.
2.B. Van Looy et al., Services Management: An Integrated Approach, 1998, Pitman Publishing.
3.CIM Study Text, The Marketing Customer Interface, 4th Edition, 2002, BPP Publishing.
4.P. Baines & B. Chansarkar, Introducing Marketing Research, 2002, Willey.
6.Matzler et al., How to delight your customer, Journal Of Product & Brand Management Vol.5, No. 2, 1996.
8."The satisfaction and retention of front line employees", R. T. Rust, G. L. Stewart, H. Miller, D. Pielack, International Journal of Service Industry Management, 1996.
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