What is Customer Satisfaction? Measuring & Monitoring

What is Customer Satisfaction?

Customer satisfaction refers to the level of contentment or happiness that customers experience with a product, service, or overall experience provided by a company. It is an important metric that businesses use to measure how well they are meeting the needs and expectations of their customers.

Customer satisfaction can be influenced by a variety of factors, including the quality of the product or service, the level of customer service provided, the pricing, the convenience and accessibility of the company, and the overall customer experience.

Customers make decisions about products and brands. Decisionmaking is a matching of the customer’s cognitive evaluation of expectations with the likely performance expectation from the product. To make it simpler, when a customer buys a product, he has certain expectations of it.

In his evaluation of alternatives in the market, he places a particular brand, let us say X, higher than other brands because he expects that brand X will give him more value compared to others in the market and the cost of ownership matches his choice.

Then the customer is likely to use the product and compare the value expected from it and the amount delivered by the brand. If the performance of the product matches the expectation, then the customer is satisfied; if it exceeds the expectation of the consumer, then the customer is delighted; if it falls below the expectation, then the customer is dissatisfied.

Marketing communication does a value promise to the customer and customers tend to compare the real performance of the product with this value promise. It is often observed that when a customer is satisfied, he speaks to a few people, but if he is dissatisfied then he is likely to speak to many people.

In the event of satisfaction, the customer will re-buy the product and will become brand loyal, a brand ambassador, or an advocate of the brand. He will spontaneously speak in favor of the brand to his peers and others and would be willing to express his satisfaction in social gatherings.

Similarly, if he is dissatisfied, he will withdraw his own consumption, will suggest to others not to buy, or will complain to the authority or government about his dissatisfaction.

It is important to manage customer satisfaction/dissatisfaction, as they influence the long-term profitability of the firm. Customer satisfaction has become the sole goal of organizations because if customers are satisfied then an exponential revenue stream will follow and profitability will increase.

As customer acquisition was the sole goal of the organization in the past, customer retention has come to be the sole goal in today’s competitive market. But the high level of customer satisfaction is not the sole responsibility of the marketing department; the whole organization should be geared up for satisfying customers and retaining the most profitable customers of the firm.

Customer satisfaction and retention programs bring back customers to the organization for repeat purchases. Frequent flyer programs of airlines, credit points of credit card companies, and turbo miles of BPCL are examples of customer retention programs.

Customer satisfaction is a dynamic concept because, over a period of time, customers increase their baseline of satisfaction and expect that firms will learn from experience and deliver higher product and service standards to them. Many successful marketing companies guide the customers in the value hierarchy and educate them about new values that they should find in their products.

It is generally agreed that consumer satisfaction (goods or services) results from a subjective comparison of expected and perceived attribute levels. This model highlights that where perceived performance meets or exceeds expectations, the customer is satisfied, even, perhaps delighted; where performance falls short of expectations the customer is dissatisfied.

Customer Delight

Every customer has some level of expectation from the product and its performance. It is up to the firm to reach at least the lowest point of this level. This concept can be explained in terms of a zone of tolerance, which is the level of performance, which a customer expects.

This is illustrated in Figure and shows that service should be at least adequate. Anything below this level is unacceptable. Conversely, if the organization can provide a degree of service that is above the desired level, this will result in customer delight and typically ensures that the customer will return again and again.

When a customer’s perceived benefits of the product exceed the actual derived benefits he is availing, it leads to delight. It is usually an unexpected or spontaneous value addition to the customer in his already chosen package.

Marketers sometimes must target their few loyal customers to surprise them by offering an element of delight. It makes customers feel ‘valued’. This may increase the customer’s retention period with the company and they feel more attached to the brand.

By using this element as an interregnal part of marketing strategies companies can increase their profits substantially. Positive word of mouth will spread about the brand leading to an increase in the customer base in the future for the brand.

By using this element as an interregnal part of marketing strategies companies can increase their profits substantially. Positive word of mouth will spread about the brand leading to an increase in the customer base in the future for the brand.

According to a recent IPSOS Loyalty Report “in a business-to-business engagement, ‘delighted’ customers are FIVE TIMES more likely to plan on repurchasing than merely satisfied customers.”

(Ipsos is a global market research company with worldwide headquarters in Paris, France)

Example: There is a hospital in Guwahati named GNRC. The organization has come up with an additional pleasant surprise for their customers. One of the customer delight activities adopted by them is prevalent in their parking facility as it has everything that a customer expects from a parking area in a large hospital.

However, the surprise element is disclosed when the customer comes back to take his car. He finds that the car has been cleaned and wiped! The windshield is shining and spotless.

Another example of customer delight is say a supermarket satisfies customers’ expectations if its produce and meat are of good quality; the floor and shelves are clean; and the staff is courteous.

But customers are delighted if the supermarket offers help in loading their groceries into their cars; free delivery for out-of-stock goods; an in-store dietician to help shoppers plan healthy meals; and fruits and vegetables from local farms to maximize freshness.

Monitoring and Measuring Customer Satisfaction

Customer satisfaction is a measure of whether or not, and if yes, how the products and services supplied by a company meet or surpass customer expectations. In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy.

Satisfaction is a person’s feelings of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectations.

Proactivity is a strategic tool to out-serve competition. Firms can become proactive by obtaining feedback on how effective they are in providing value to the customer.

A more reactive posture is in evidence where they must seek answers to the following questions:

  • Are they doing the right things from the customer’s perspective?

  • Are they measuring what is important to them?

Organizations can obtain information by using research techniques like market surveys, group discussions, mystery shopping, etc, and measure how well they are performing. It has also been observed that when the complaints are in the ascendancy then customers are seen to be lost through failure to address the problems to customer’s satisfaction.

We all know what satisfaction means and it clearly does not always mean the same thing to everyone. Researchers in a variety of ways, including the following, defined customer satisfaction:

  • A level of happiness resulting from a consumption experience.

  • A cognitive state resulting from a process of evaluation of performance, relative in previously established standards.

  • A subjective evaluation of the various experiences and outcomes associated with acquiring and consuming a product relative to a set of subjectively determined expectations.

  • A two-factor process of evaluating a set of ‘satisfiers’ and a set of ‘dissatisfiers’ associated with the offer.

  • One step in a complex process involving prior attitude towards a product or service is a consumption experience resulting in positive or negative disconfirmation of expectancies, followed by feelings of satisfaction which mediate post-consumption attitude, which subsequently influences future purchase behavior.

Definitions such as these simply serve to reinforce the difficulties involved in operationalizing this concept and subsequently measuring it. But we can summarise by saying that customer satisfaction is the goal of the organization and marketers should try to satisfy customers with a product that has the potential to deliver substantial value, through an effective value delivery network.


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