Building Customer Satisfaction, Value and Retention

In this world of extreme competition, companies with a total focus on customer are going to be the winner. Companies must understand importance of customer satisfaction and then build process around it. A satisfied customer will be a loyal customer.

There are large offering of products and services available in the market then why the customer should choose a given company’s product.

According to various research and studies it has been confirmed that consumer will purchase products, which given them maximum perceived value. This value comes from calculating the cost associated with the emotional level decision like the brand image, corporate brand, sales personnel image and functional image. This value converts to total customer cost by including purchase cost, time-energy in evaluation of product and intuitive cost.

Consumer will take decisions after considering the total cost associated with purchase, perceived and otherwise. If after the purchase product performs as expected than customer is considered satisfied.

A completely satisfied customer is likely to repurchase the product and even promote the product through a word of mouth. Companies are aiming for total customer satisfaction, which can be achieved after understanding customer expectation and then delivering as per the expectation.

Companies are able to achieve this state of total customer satisfaction by incorporating good business practices. These practices are constructed around stakeholders, business process, resource and organization. Company’s stakeholders consist of employees, suppliers, distributors and customers. Earlier focus has always solely been on shareholders, but now stakeholders need to be satisfied for shareholder’s profit.

Companies need to define boundaries of relation with stakeholders as to get maximum value for every participant. To ensure maximum value, companies need to develop business processes, which understand and fulfill customer expectations. This can be achieved by aligning cross functional teams across critical processes, to create one smooth flow. Companies need to understand its core competencies and develop them, thereby successfully managing its resources. Organizational structure, design and policies have to be suitable to facilitate the introduction of total customer satisfaction culture.

Companies through creating and delivering value can develop total customer satisfaction. Company itself can be considered as a value chain consisting of primary and secondary activities. Primary activities consist of inbound materials, operation, delivering finished products, sales/marketing and servicing clients. Secondary activities consist of functional departments like technology department, procurement department, human resource and finance department. This value created is delivered to customer through the distribution channel under the principle of supply chain management.

Customers in the digital age are much more conscious and aware of their need and wants, making them a difficult lot to please. Companies run marketing campaign highlighting points of similarity and difference with competitor’s products. The art is not at attracting the customer, but it is at retaining the customer and creating long term relation with them.

Companies usually suffer from churning effect where customers do not make the repurchase. Companies need to work hard in identifying reasons behind this churning. Once reasons are identified separate them on the basis of manageable and non-manageable issues and then work hard at eliminating manageable issues.

Companies need to develop policies and measure at retaining customers along with attracting new customers. This art of retention can be achieved through customer relationship management (CRM). In CRM the task is to develop strong consumer based brand equity, which is done by converting first time buyer to repeat buyer to a client to a member to advocates and finally to partners. During these course companies can look forward to offering financial benefits in terms of discount for frequent buyers or also by association with a social cause.

Companies are in business to make the profit. Therefore, it has to identify profitable customers. Profitable customers provide a revenue stream more than the expense stream on retaining them. And this revenue stream should be higher for a company to have a competitive advantage. More and more companies are deploying total quality management approach across the organization to build and deliver customer satisfaction.


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The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.


Marketing Management