Measuring Customer Satisfaction at ImageStream
Statement of the Problem, Research Question and Purpose
ImageStream Internet Solutions, Inc. is a privately held company in its 9th year of operation. ImageStream engineers, manufactures, and distributes Linux-based routing products for network and Internet applications. ImageStream products are used by Internet service providers (ISPs), governments, schools, and businesses in more than 75 countries around the world. As ImageStream moves toward its next decade, market forces require it, like most high technology companies, to be fast and responsive. The company faces constant change in demands and needs along with the pressures of mission creep in the face of limited resources. It is against this backdrop that ImageStream started its ISO 9000:2000 certification process. This process requires not only the implementation of quality processes, but measurement of their efficacy as well.
ImageStream conducts key manager meetings twice monthly, and a company-wide review on a semi-annual basis. During these managerial and company reviews, the senior executives identify key metrics driving the success of the company's mission, including those metrics that would benefit most from significant improvement. This proposal outlines the use of a customer satisfaction survey and seeks to answer the management question: What is the current customer satisfaction with the level and type of customer service provided by ImageStream? The study will explore the conceptual framework of service quality, the positive and negative impacts of service quality on ImageStream, and the effect of favorable and unfavorable customer intentions on perceived quality using survey research. Armed with the statistical analyses outlined below, the operations management team will identify current trends in customer satisfaction in a proactive attempt to resolve to any issues.
Background and Literature Review
The study and development of customer service techniques and customer retention management programs has blossomed into its own industry. This increasing focus on customer satisfaction is not surprising, given the positive correlation between happy customers and successful companies illustrated in countless marketing research studies. This study will outline the relationship between customer satisfaction with service and customer retention at ImageStream. To support the findings, we will conduct an empirical study focusing on the relationship between perceived service quality and customer intentions.
Weinstein and Johnson (1999) recommend that companies like ImageStream should spend "75% of its marketing budget on customer retention strategies" and to strengthen these relationships. Once customers commit to a product platform, and the longer they use and deploy that platform, the more profit ImageStream can realize. Longstanding, satisfied customers will generally continue, or often increase, purchasing, require less operational and customer service support, and be more willing to pay price premiums to remain with the company--all without incurring new customer acquisition costs (Pine, Peppers, and Rogers, 1995). This paper will analyze how ImageStream's service relationship with its customers produces customer behaviors indicating whether or not a customer will remain an ImageStream customer. The methodology used will follow Zeithaml, Berry and Parasuraman's study on this topic (1996).
Since replacing lost customers requires new customer acquisition costs, customer retention should be a fundamental performance measure for ImageStream's executive staff and a key component of the company's incentive programs (Zeithaml et al., 1996). According to the American Management Association, acquiring a new customer can require five times the investment needed to keep an existing customer (Weinstein et al., 1999).
Customer service, not surprisingly, has been researched extensively:...
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