Academic journal article Journal of Sociological Research

Modelling Customer Satisfaction for Business Services

Academic journal article Journal of Sociological Research

Modelling Customer Satisfaction for Business Services

Article excerpt

Abstract

Research in the area of business services, which include marketing research companies, advertising agencies and consulting firms, has concentrated on service quality, relationship quality, and overall customer satisfaction. In some of the best known models which connect these concepts, customer satisfaction is modelled as a function of customer expectations and perceived quality. Little research has been done, however, to explain the development of relationships between businesses and business services over time. Additionally, research in this area has been almost non-existent in the transition countries. Our study proposes a customer satisfaction model with an integrated time component to be tested on the transition country data. The relationship quality in our model is expected to be paramount for customer satisfaction, loyalty and the long-term success of business services.

1. Introduction

Customer satisfaction with business service can be defined with a customer's positive or negative feeling about the value of using a business service in a specific situation. This feeling can be a reaction to an immediate use situation or an overall reaction to a series of use situation experiences (Woodruff, Gardial, 1996). Satisfaction is therefore related to customer value. Customer value (or client's value) is a perception of what a customer wants to accomplish with a help of a service, in order to reach a desired goal. Woodruff et al. (1996) argue that customer value describes the nature of the relationship between the firm-customer and the service, while customer satisfaction represents a customer's reaction to the value received from the service.

Furthermore, value identifies which service dimensions are central for a firm-customer to reach desired goals and how these service dimensions are related to one another and to the firm. Satisfaction, however, captures the customer's response to a particular service - how the customer feels about the service received. While value gives the business service provider a direction, satisfaction gives a report card on how they are doing. Therefore, firm-customers may have value hierarchies before the purchase of service, whereas satisfaction offers a historical perspective. Furthermore, customer value is generic, while satisfaction judgements are specific to a particular service.

A comparison of customer value orientation versus customer satisfaction measurements may further reveal that value orientation considers all levels of the customer's interaction with a service, including attributes, consequences, and end states. The customer value orientation is a longer term and more stable orientation. It helps to interpret information on specific service attributes in a practical way. Most traditional customer satisfaction measures, however, are focused almost exclusively on getting information about attributes. A focus on attributes is more unstable, leads to marginal change and improvement, and has a historical orientation. In the absence of additional consequence level information it is often difficult to interpret. Most traditional customer satisfaction measurements are therefore limited by their service versus customer perspective and their orientation toward attributes rather than the whole value hierarchy.

A creation of value is a key to customer loyalty. Loyalty is best quantified by retention rate and/or share of purchase. It has several secondary effects, including:

* revenue growth as a result of repeat purchases and referrals,

* cost decline as a result of lower acquisition expenses and efficiency of serving experienced customers, and

* employee retention (Reichheld, 1993, 1996).

2. Models of Customer Satisfaction and Loyalty to Business Services

Research in the area of services marketing has concentrated on service quality (Berry, Zeithaml, Parasuraman, 1990; Bitner, 1990; Boulding at al., 1993; Cronin and Taylor, 1992; Devlin, Dong, 1994), relationship quality (Crosby et al. …

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