measuring customer satisfaction in the context

- “Measuring customer satisfaction in the context of a project-based organization”.
- There is a lack of research that focuses on the suitability of the concept of customer satisfaction and the current methods used for measuring it in organizations operating in business-to-business (B2B) markets, such as project-based organizations (PBO), which typically provide customized product and service offerings to a rather limited customer base.
- In this theoretical paper, we discuss how certain characteristics of PBOs should be taken into consideration when measuring customer satisfaction.
- In addition, we discuss the suitability of different customer satisfaction measurement (CSM) methods for PBOs.
- Up-to-date information about customer satisfaction is important for successful management of complex projects.
- The importance of customer satisfaction is emphasized in the case of project- based organizations, where a customer often plays an integral role in the project delivery process..
- Information about sources customer satisfaction or dissatisfaction can be used to ensure that both project product and the delivery process meet customer expectations..
- Numerous studies and publications have almost unanimously concluded that measuring customer satisfaction can lead to several benefits for the organization applying it:.
- Customer satisfaction can be used as a basis for customer segmentation (Athanassopoulos, 2000)..
- According to McColl-Kennedy and Schneider (2000), measuring customer satisfaction is.
- The opinions of the customer whose satisfaction is measured can be affected by the measurement process.
- Striving for high customer satisfaction can be considered important, since increased customer satisfaction has been linked to customer behaviour that positively affects business results (e.g..
- We presume that in practice, many project-based organizations among other organizations operating in B2B markets are measuring customer satisfaction with methods developed for B2C market contexts without clearly understanding that several of the underlying assumptions inherent in these methods are not valid in a B2B context (Rossomme, 2003.
- Ahola (2004) we define customer satisfaction measurement system to include entire process consisting of:.
- Gathering information concerning customer satisfaction.
- Loomis (1999) has demonstrated that there are significant challenges related to the use of customer satisfaction information in organizational decision making processes..
- We first discuss the factors that differentiate organizations operating in B2C markets from project-based organizations operating in B2B markets and that are relevant for measuring customer satisfaction.
- Secondly, we review three different methods for measuring customer satisfaction.
- Differences between B2C and project-based B2B organizations that affect measuring customer satisfaction.
- This issue has direct implications towards whether or not customer satisfaction should be measured by different methods in B2B and B2C contexts.
- Following this line of reasoning, one can argue that in B2B commerce, customer satisfaction is affected significantly by factors that are not directly linked to the product or service component of the offering, but to how persons from two different organizations get along.
- Customer satisfaction is not influenced only by product and service quality, but how they perceive the quality of project delivery process.
- Measuring customer satisfaction.
- In this section, we first discuss three different methods for measuring customer satisfaction, the customer satisfaction survey, two incident-based techniques (critical incident technique and sequential incident technique), and measuring customer satisfaction by interviews.
- Service quality is distinct from customer satisfaction but the two concepts overlap considerably and their boundary can be argued to be somewhat blurred (Robinson, 1999)..
- Customer satisfaction survey.
- should you measure the customer’s perception of the offering (Cronin &.
- Customer satisfaction surveys usually fulfil three organizational needs:.
- This decreases the reliability of the results..
- Two major streams of research have emerged around how customer satisfaction should be measured.
- Some common problems related to customer satisfaction surveys is their tendency to show a high level of satisfaction, a lack of standard satisfaction scales and the proliferation and excessive use of surveys (Altany, 1993.
- Customer satisfaction as a whole can be understood and measured when the product or service offering is divided into several measurable attributes.
- As a method for assessing customer satisfaction CIT (and SIT) allows the detailed description of problematic customer incidents as the customers perceive them (Flanagan, 1954).
- The underlying assumption behind critical incident technique (CIT) is that customer satisfaction is strongly affected by very positive or negative experiences in the product/service delivery and consumption processes.
- Sequential incident technique (SIT) is very similar, but it also records usual events that do not affect customer satisfaction in the same degree than critical incidents do.
- They have the ability to record incidents, which significantly affect customer satisfaction in a manner that is very natural to the customers (Flanagan, 1954.
- To understand when and how customer satisfaction has been affected, the supplier utilizing CIT or SIT does not concentrate on isolated elements but tries to gain a holistic picture of the events and their interrelations that together form customer satisfaction or dissatisfaction..
- Measuring customer satisfaction by interviews.
- The interview method for measuring customer satisfaction provides a qualitative approach, which avoids many of the problems associated with the survey method.
- However, there have been no studies focusing on how widespread and systematic the use of interviews for assessing customer satisfaction is in a project-business context.
- The utilization of interviews to measure customer satisfaction can result in several benefits:.
- customer satisfaction in great detail.
- From an epistemological viewpoint, the customer satisfaction interview is based on an interpretative or constructivist view of reality.
- Summarizing our argumentation, Table 1 presents the key dimensions, which differentiate the three discussed methods for measuring customer satisfaction..
- TABLE 1 – Common methods for measuring customer satisfaction and their key characteristics.
- Methods for measuring customer satisfaction.
- of methods customized customer satisfaction survey.
- Selection and skills of the interviewers.
- Indirect measures of customer satisfaction.
- In addition to measuring customer satisfaction directly by the methods discussed earlier, it can also be measured indirectly based on different factors such as customer retention, product prices relative to competitors’ products, process efficiency or ultimately even profit level.
- Customer satisfaction has been proven to have a positive correlation with customers’ repurchase intent (Cronin &.
- Rust (1994) provides a detailed model of the influence of customer satisfaction on financial performance.
- However, studies focusing on the relationship between customer satisfaction and profits have produced somewhat conflicting results.
- van der Wiele et al., 2002) have shown a positive correlation between customer satisfaction and profits, while other researchers such as Tornow &.
- Wiley (1991) discovered a negative correlation between customer satisfaction and financial performance..
- Indirect measures of customer satisfaction provide simple ways of assessing the state of customer satisfaction.
- They do not consume very much of the suppliers resources, but it must be noted that they are always based assumptions about that customer satisfaction correlates positively with these measures of organizational effectiveness and efficiency.
- There is very limited amount of studies that focuses on impact of customer satisfaction in project-business.
- H1: The implementation of standardized customer satisfaction surveys positively correlates with the size of the customer base..
- H2: The implementation of standardized customer satisfaction surveys positively correlates with homogeneity of the customer base..
- H3: The implementation of survey-based CSM as the only method for measuring customer satisfaction positively correlates with the use of customized surveys..
- H4: The use of multiple complementary methods for CSM positively correlates with the perceived usefulness of the CSM results by the supplier’s personnel..
- One of the significant challenges of measuring customer satisfaction in a project-based B2B context relates to measuring the satisfaction of the entire customer organization (Rossomme, 2003) or the complex business relationship between two organizations (Tikkanen et al., 2000)..
- Traditional ways to measure customer satisfaction are rooted in measuring satisfaction of an individual person.
- These individual are not aware of all aspects of the project work that influences customer satisfaction.
- This makes it difficult to create one standardized way of measuring customer satisfaction even for each customer, but customized surveys may have to be tailored for each individual person.
- In addition, during large projects, employees in both organizations create personal relationships, which can be expected to make the use of interviews and direct contacts with customer the most suitable way to measure customer satisfaction..
- If the supplier’s customer contact personnel are familiar with the critical incident technique (CIT) or sequential incident technique (SIT), they are able to record and analyze incidents having direct influence on customer satisfaction or process quality.
- (2000), who discovered that effective service recovery, such as problem handling and complaint handling is associated with high levels of customer satisfaction..
- H8: Implementation of CIT and/or SIT positively correlates with customer satisfaction towards the services provided by the supplier.
- 2 Services are considered here as a part of the entire project delivery..
- Thus customer participation in the project work can be expected to decrease the value of formal customer satisfaction measurement methods..
- H9: Implementation of survey as the only method for measuring customer satisfaction negatively correlates with direct customer involvement in the project work..
- Measuring customer satisfaction is an intervention, which may influence customer satisfaction (McColl-Kennedy &.
- Thus organizations may not want to measure customer satisfaction in cases when they perceive it potentially harmful for customer relationship..
- H10: Whether a customer satisfaction of specific a customer is measured positively correlates with expected level of customer satisfaction..
- Institutional perspective (Scott, 2001) complements traditional research approaches by focusing on the role of customer satisfaction surveys as institutionalized practice, which takes into account the symbolic value of customer surveys.
- H11: If measuring customer satisfaction is not perceived as important for organizational success from a technical perspective, this positively correlates with symbolic implementation of CSM by utilizing the most cost effective method..
- H12: Use of standardized customer satisfaction surveys positively correlates with supplier having a formal quality management system..
- Customer satisfaction surveys and the effects of customer satisfaction improvement initiatives have been researched extensively.
- Peterson and Wilson (1992) reported that between 1972 and 1992 more than 15 000 articles have been published on the measurement of customer satisfaction, but we could not find any article focusing directly on measuring customer satisfaction in the context of project-based business.
- This paper aims to fill this gap by discussing how applicable different methods for measuring customer satisfaction are for project-based organizations..
- In this paper we created hypotheses, which condense our review of extant methods for measuring customer satisfaction from the viewpoint of a project-based organization.
- hypotheses can provide a starting point for empirical research on current practices, which would enable us to gain more in-depth knowledge of which methods for measuring customer satisfaction are most suitable for project-based organizations.
- and cannot be considered as an entirely homogeneous group, it would also be very interesting to discover the possible differences in customer satisfaction measurement practices that exist between PBOs operating in different industries..
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