Customer Satisfaction and Service Quality

Introductory Background

Customer satisfaction and service quality is a subject that has caught the interest of both organizations and researchers. The main aim of organizations is to make profits and reduce cost. Profit maximization is achieved through improving service quality and increasing sales with minimal expenses. Among the factors that can assist in increasing sales is customer satisfaction, because it leads to customer loyalty, referrals and repeats purchase. In the consumption era in marketing, the focus on customer satisfaction and service quality have intensified as the use period changes to post-consumption; where organizations are required to offer quality services on top of what they provide as offers to their customers and what are the specifications of these services available to clients. This research is based on the fact that customer is the key to the thriving of any business. Customer satisfaction is the primary tool that helps to increase sales and generate more profits in the business world. The importance of customer satisfaction and service quality has been proven vital in improving the overall performance of organizations (Lai, Y. H. R., Chu, J. Y., & Petrick, J. F. 2016). Before the formulation of strategies and organizational structure, the customers are the first components considered by the management team. The questions raised in the strategic meetings ranges from who will need to use these services, what is their location and the price they will pay to reach the customers and will it give them the maximum satisfaction?

Reasons for researching in this area

The importance of clients in the service industry has made it vital always to carry out continuous research about customers. There has always been a gap between consumer research before, during and after sales, due to the changes that may occur in the business. An organization that meets its customers’ demands on a daily basis has a higher retention rate and more profits due to elevated levels of customer loyalty. For this reason, every company works hard to continually win the affection of clients by satisfying them so as to turn them into loyal customers to their services and thus to maximize sales and profit. To maintain a relationship with their clients, companies need to conduct several types of research to get answers on how the customers make their purchasing decision and whether they are satisfied with what the organization offers them regarding service quality.

Problem formulation

Past researchers have found that Service quality and customer satisfaction to be directly linked but no study had sampled the service quality dimensions directly to determine whether it is related to customer satisfaction. Therefore there is a gap and need to test the relationship between service quality dimensions and customer satisfaction. SERVQUAL model is a technique of evaluation for service quality; there is a need to sample the relationship between service quality and service quality dimensions in various service sectors especially using the SERVQUAL method (Hapsari, R., Clemes, M., & Dean, D. 2016).

Research Question

• Is there a relationship between customer satisfaction and the service quality dimensions?

• Is there a significant link between Service quality and the service quality dimensions?

• Are customer satisfaction and service quality related?

Purpose of the study

The objective of this research is to examine the relationship between customer satisfaction and service quality in the service industry based on the service quality factors. Research like this is crucial in examining and improving service delivery and design since it will equip the management team with information that they can use in making decisions about the customers. The results of this study should be proved useful for future researchers of customer satisfaction and service quality, especially in service sector companies.

Limitation of the study

Due to the vast nature of this area of research, I was not able to access all the literature material concerning customer satisfaction and service quality because it would have been very tedious. Therefore, I covered a limited aspect around the relationship between customer satisfaction and service quality dimensions of the SERVQUAL technique.

Literature Review

Customer satisfaction is the most important issue concerning the business organization of any nature, which is based on the client oriented theory and the model of continued improvement in modern service sectors. The marketing concept justifies that a content consumer will repurchase again, or at least has the intention of making a referral, then dissatisfied consumers. According to (Berry, L. L., & Berry, L. L. 2016). Customer satisfaction and retention are considered as the primary long-term objectives of organizations. New buyers are expensive to serve than repeat customer, meaning that repeat customers use firm’s cost structure to their advantage. Therefore overall customer satisfaction with a company’s service is determined by comparisons between customers’ expectations of the sector’s services and their perceptions of the services’ satisfaction. Service quality is the result of the customers’ comparison between their expectations about a service and their understanding of the levels of satisfaction derived from the service. Service quality is the contradiction between customers’ perceptions of service satisfaction and their normative expectation for service (Zablah, A. et.al 2016). It is common sense that satisfied customers will most likely return for future purchases, make referrals and become loyal in the long run. It is the formal procedure and the foundation of marketing in the services industry, it insists that satisfaction should be treated as the core pillar of loyalty.

Research methodology.

The method used for this research is a grounded multiple case study, which is crucial for exploring a new topic and to provide guidelines to help formulate material in previously under-investigated areas. Many researchers recommend the use of longitudinal studies; I applied this approach due to the implementation of a change process which occurs in a period of several years. I chose longitudinal study because fielding questions at the end of an improvement process would lead to post hoc rationalization. Post hoc assessment may not capture all the stages that took place. I applied several cases to find out whether the approach used was different in different contexts, where the individual cases act not as samples but as replications. I selected four cases to provide four different service sector settings; a private for-profit organization (B2C) which was a local bank. A profit servicing business customers (B2B) which were an international courier and parcels company, a public sector organization such as a hospital, and finally a regulated utility which was a water company. I picked the organizations because they fitted the basis of service industries, they were embarking on improving their customer experience, and since they allowed me to access their records over a period of years to observe the organization’s structure of designing and enhancing the customer experience (Ladhari, R., Souiden, N., & Dufour, B. 2017). The research design involved several methods and sources of evidence from public records, news articles, and management reports, observing management discussions and unstructured interviews with executives and staff members.

Findings

All the Experience Teams developed customer experience statements reflecting the nature of the client's experience their organizations should be offering from the customers’ perspective at the different touch points during the customers’ experience. These statements involve the emotions that the agencies unanimously agreed they wanted all of their customers to feel. Formulating these statements were the vital duty, and all the organizations made an effort of holding a facilitated discussion with the Experience Teams, senior executive, and in the case of the hospital, patients were heavily involved in generating the statements. The courier company held a two-day management team meeting; the other organizations held several meetings over a period of months. The figure below depicts the relationship between customer satisfaction, customer loyalty and intentions to switch.

Discussion

Customer satisfaction in today’s dynamic corporate environment is very essential. However, customer dissatisfaction is the primary reason for clients’ intentions to switch. Dissatisfied customers are likely to tell close to ten people their bad experiences with a particular service. Customer satisfaction influences customers’ recommendation and repurchase intentions. Satisfied customers will share their good experiences with almost six individuals around them. Organizations must have the strategy of building and maintain long-lasting relationships with their clients through satisfying all customer requirements and demands which motivate them to continue to get service from the organization on a regular basis.

Reference

Lai, Y. H. R., Chu, J. Y., & Petrick, J. F. (2016). Examining the relationships between perceived value, service quality, satisfaction, and willingness to revisit a theme park.

Hapsari, R., Clemes, M., & Dean, D. (2016). The Mediating Role of Perceived Value on the Relationship between Service Quality and Customer Satisfaction: Evidence from Indonesian Airline Passengers. Procedia Economics and Finance.

Zablah, A. R., Carlson, B. D., Donavan, D. T., Maxham III, J. G., & Brown, T. J. (2016). A cross-lagged test of the association between customer satisfaction and employee job satisfaction in a relational context. Journal of Applied Psychology, 101(5), 743.

Ladhari, R., Souiden, N., & Dufour, B. (2017). The role of emotions in utilitarian service settings: The effects of emotional satisfaction on product perception and behavioral intentions. Journal of Retailing and Consumer Services, 34, 10-18.

Rahimi, R., & Kozak, M. (2017). Impact of Customer Relationship Management on Customer Satisfaction: The Case of a Budget Hotel Chain. Journal of Travel & Tourism Marketing, 34(1), 40-51.