Customer Satisfaction

• Their principal use is twofold: 1. Within organizations, the collection, analysis g , , y and dissemination of these data ensuring that they have a positive experience with y p p the company’s goods and services services. 2 Although sales or market share can indicate 2. how well a firm is performing currently, satisfaction is an indicator of how many customers will make further purchases in the future future.• There are various ways to obtain customer feedback with regard to their satisfaction g levels with the product(s) and the company Some of are company. them are, – follow Telephone follow‐up l d – Customer complaint data – Direct customer visits – Customer advisory councils – conferences User Th th th d t th • There are three common methods to gather survey data: face‐to‐face interviews, telephone interviews, and mailed questionnaires. • The personal interview method requires the interviewer to ask questions based on a pre pre‐structured questionnaire and to record the answers answers. • Telephone interviews are less expensive than face‐tofaac interviews. These can be monitored by the h t t th t th ifi d i t i research team to ensure that the specified interview procedure is followed. • The mailed questionnaire is less expensive expensive. However, this savings is usually at the expense of response rates rates.Face‐to‐Face Telephone Mailed Interview Interview Questionnaire Gives very high Less expensive and special Very Less degree of validity of the data methods needed to increase efficiency. Expensive but more chances for low response p rate. The major limitations are The limitations of this method are the lack of direct Questionnaire development costs and factors concerning the i i observation, the lack of using exhibits for explanation, and h li i d f i l requires professional k ld d interviewer. the limited group of potential respondents—those who can be reached by telephone. knowledge and experience and should be dealt with accordingly.Survey st pling se Rate ed bility ations h of view bits dity ype of S Cos Samp espons Spee Flexib Observa Lengt Interv Exhib Valid Ty Re O In Person – – + – + – + – ++ ++ + + ++ Phone + + ++ + + – – – + Mail ++ – – – – – – + + – – – = Disadvantage – – = Worst + = Advantage ++ = Best g + – = Could be an Advantage or a DisadvantageWh th t b i l it i t tl t • When the customer base is large large, is too costly to survey all customers customers. • Estimating the satisfaction level of the entire customer population through a representative sample is more efficient efficient. • To do that Scientific probability sampling methods are used. • There are four basic types of probability sampling sampling: – Simple Random Sampling – Systematic Sampling – Stratified Sampling – Cluster Sampling Sampling.I t ti li i l d • In systematic sampling one simply goes down a list taking every kth individual, starting with a randomly selected case among the first k y g f individuals. • Systematic sampling is simpler than random li if li t i t l l l sampling a list is extremely long or a large sample is to be drawn. • However there are two types of situations in However, which systematic sampling may introduce biases: – (1) The entries on the list may have been ordered so that a trend occurs and – (2) the list may possess some cyclical characteristic that coincides with the k value. I t tifi d l fi t • In a stratified sample, we first , and . • The strata are usually based on important variables t i i t th t f i t t pertaining to the parameter of interest. • Stratified sampling, when properly designed, is more efficient than simple random sampling and systematic sampling. • Stratified samples can be designed to yield greater p g y g accuracy for the same cost, or for the same accuracy with less cost.I t tifi d li l ithi h • In stratified sampling we sample within each stratum. Sometimes it is advantageous to divide the . • A cluster sample is a simple random sample in hi h h li it i l t f l t which each sampling unit is a cluster of elements. • Usually geographical units such as . • Cluster sampling is generally less efficient than p g g y simple random sampling, but it is .H l l i ffi i t? • How large a sample is sufficient? • The answer to this question and . • The higher the level of confidence we want from the sample estimate, and the smaller the error margin, , and vice versa versa. • For each probability sampling method, , some of which (such as that for cluster sampling) are quite complicated.• The following formula is for (e.g., percent satisfied) based on : ) 1 ( 2 p p NZ n − × = )] 1 ( [ 2 2 p p Z NB − × + N – Population Size Z – Z Statistic from normal distribution P – Estimated Satisfaction Level for 80% Confidence Level, Z = 1.28 for 85% Confidence Level, Z = 1.45 for 90% Confidence Level, Z = 1.65 B – Margin of Error for 95% Confidence Level, Z = 1.96h fi i i f i l ( • The five‐point satisfaction scale very satisfied, satisfied, neutral, dissatisfied, and very dissatisfied) is often used in customer satisfaction surveys. • The data are usually summarized in terms of percent satisfied. p • In presentation, run charts or bar charts to show the trend of satisfied percent are often used.