How service marketers can identifyvalue-enhancing service elements

D. Randall Brandt

13th November 2008

Olli Kulkki

Analysis

Context– Service marketing (service)– Consumer services (consumer business)

Research methods of the article– Literature review– Presents a statistical method– Could be based on case studies

Main points of article

Represents a method to determine value-enhancing elements of a service from customer satisfaction survey data

– Determine elements that maximize satisfaction– Determine elements that minimize dissatisfaction

How to execute a customer satisfaction survey and interpret the results

Customer feedback can be used to control quality Long term success depends on how well customer

expectations are managed

Relations to our course topic

User viewpoint of quality Quality of End-user Experience Subjective quality measurement Measuring service acceptability

Satisfaction survey focus & content

Why surveys?– General or overall evaluation of service quality– Evaluation of service attributes– Find potential problems and issues– Indicates how successful the company is (wikipedia)

How?– Use five point scales with anchors– Ask one general question– Ask many questions about service attributes

Scales, anchors and groups

Very satisfiedMuch better than

expectedBetter

Somewhat satisfiedSomewhat bettern than

expectedBetter

Neither satisfied or dissatisfied

About the same as expected

Same

Somewhat dissatisfiedSomewhat worse than

expectedWorse

Very dissatisfiedMuch worse than

expectedWorse

The method

Identify customer groups – “I think that service is worse/same/better as expected”

Compare overall satisfaction of groups Results

– relatively unimportant attribute, – minimum requirement attribute, – value adding attribute,– hybrid attribute

Analyzing the positive statements

Attribute Worse Same Better

Delivery to all locations 52% 80% 86%

Prompt Next-day delivery 44% 75% 79%

Convenient to use 49% 54% 71%

Good at Solving Problems 39% 65% 82%

Use percentage of Very Satisfied and Somewhat Satisfied people in each customer group

Results

Attribute Worse Same Better

Relatively unimportant 50% 50% 50%

Minimum requirement 44% 75% 79%

Add value 49% 54% 71%

Hybrid 39% 65% 82%

Table presents positive response to a statement

customer

What is being measured?

customer

Past experiences

Customer satisfaction survey

Growth of service sector

Opinions

Change of

opinions

Competition

Consumerism

customer

customer

customer

customer

customer

Peer pressure

Expectations

Raised expectations

Who is measuring?

marketer

Can visualize complex projects

Customer satisfaction survey

Easily engage

strangers

Positive

Think outside the box

Enjoy selling ideas to other people

Rarely ask for permission or detail

Charismatic

Good at listening to stories

Comfortable with

ambiguity

[Seth Godin http://sethgodin.typepad.com | The Marketer’s attitude]

Good in tellingstories

Evaluation

Practical method of understanding and seeing the benefits of a successful customer satisfaction survey

Method still valid after 20 years Central tendency bias is normalized by using

three groups instead of five Any user survey could analyzed Gives insight to listening of peoples opinions

Practical importance

More practical than scientific inportance Customer Satisfaction is one of the four

elements in Balance Scorecard that measures the alignment of activities and strategy

Good way to find out what customers are satisfied about, if they are satisfied

Practical importance

[Strategies for Supporting Next-Generation Networks | White Paper 2008 | Alcatel Lucent]

Critique

If customer has no incentive, result of study might not tell the whole truth– Happy customers are more likely to use time

Customer group sizes may differ– 100 worse, 100 same, 1000 better

Method may experience bias What does dissatisfaction tell about the

survey? (negative responses not compared) Method holds no quantitative measurement