Quality

Customer Service Quality

Product Quality

Customer Satisfaction

Customer loyalty

As markets shrink, companies are scrambling to boost customer satisfaction and keep their current customers rather than devoting additional resources to chase potential new customers. The claim that it costs five to eight times as much to get new customers than to hold on to old ones is key to understanding the drive toward benchmarking and tracking customer satisfaction.

"The gulf between

satisfied customers and

completely satisfied

customers can swallow

a business."

Defining customer satisfaction

 Because the concept of customer satisfaction is new to many companies, it's important to be clear on exactly what's meant by the term.

 Customer satisfaction is the state of mind that customers have about a company when their expectations have been met or exceeded over the lifetime of the product or service. The achievement of customer satisfaction leads to company loyalty and product repurchase. There are some important implications of this definition:

  Because customer satisfaction is a subjective, nonquantitative state, measurement won't be exact and will require sampling and statistical analysis.

  Customer satisfaction measurement must be undertaken with an understanding of the gap between customer expectations and attribute performance perceptions.

  There should be some connection between customer satisfaction measurement and bottom-line results.

 "Satisfaction" itself can refer to a number of different facts of the relationship with a customer. For example, it can refer to any or all of the following:

  Satisfaction with the quality of a particular product or service

  Satisfaction with an ongoing business relationship

  Satisfaction with the price-performance ratio of a product or service

  Satisfaction because a product/service met or exceeded the customer's expectations

 Each industry could add to this list according to the nature...