Market Research in Customer Satisfaction

1. Market Research in Customer Satisfaction Prepared & Presented by: Tony Fu Joel Solis Charul Sharma Thang Nguyen September 10, 2003

2. Customer Satisfaction • Customer Satisfaction – is the customer’s feelings of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectation. CS = Gap between Service Expectation and the Actual Service Received (SERVQUAL MODEL)

3. Reality Check • Does a company know why customers buy from it vs. the competition? • Does the company know if its performance translates into a high price / value relationship? • Does the company know why customers are staying loyal to the company? • Is the company creating value with its products and services as perceived by its customers?

4. Why Do MR in Customer Satisfaction? • Establish ongoing measurement systems for tracking organizational change • Communicate effectively with key customer groups • Assess the capacity to “do the job right” the first time • Measure and benchmark current conditions of your company • Increase competitiveness in the marketplace

5. Results Obtained by Doing MR in Customer Satisfaction • Retain Loyal Customers • Gain New Customers • New Product Development • Improve Delivery Systems • Increase Organizational Systems • Increase Sales

6. Customer Satisfaction for Products • CS for Products- Auto Industry • How satisfied are you with the salesperson? • How satisfied are you with the product and price? • How satisfied are you with the warranty? This presentation will focus on Customer Satisfaction for services because of the increased difficulty in measuring satisfaction.

7. Tools for Tracking and Measuring Customer Satisfaction • Complaint and Suggestion Systems • Customer Satisfaction Surveys • Ghost Shopping • Lost Customer Analysis

8. Customer Satisfaction Surveys There are two methods to do surveys: Offline Surveys Online Surveys

9. Offline Survey-SERVQUAL Model Items to measure customer satisfaction for services by Offline Survey: • TANGIBLES : appearance of physical facilities, equipment, personnel, information leaflets • RELIABILITY : ability to perform the service accurately and dependably • RESPONSIVENESS : willingness to help customers and provide a prompt service • ASSURANCE : competence: having the requisite skills and knowledge; courtesy; credibility: trustworthiness, believability, honesty of staff; security: freedom from danger, risk and doubt • EMPATHY : access: approachability, ease of contact; communication with customers; understanding customers’ needs

10. Offline Surveys and Industries

11. Online Surveys Items to measure customer satisfaction for service by Online Survey: • ACCESS:Ability to get on the site quickly and to reach the company when needed • ASSURANCE/TRUST:Confidence the customer feels in dealing with the site • EASE OF NAVIGATION:Ability to find what one needs -- and to move back and forth through the pages -- without difficulty • EFFICIENCY:Site is simple to use and requires a minimum of information to be input by thecustomer

12. Online Surveys (cont.) • FLEXIBILITY:Choice of ways to search, buy, pay, ship, and return items • PERSONALIZATION/CUSTOMIZATION:How much and how easily the site can be tailored to a customer’s preferences and purchase histories • PRICE KNOWLDEGE:Ability to determine shipping price, total price, and comparative prices during the shopping process

13. Online Surveys (cont.) • SECURITY/PRIVACY:Protection of personal information, and transactions being safe from intrusion • SITE AESTHETICS:Attributes relating to the site’s appearance • RELIABILITY:Correct technical functioning of the site, and accuracy of the service promises, billing, and product information • RESPONSIVENESS:Quick response from the site and the ability to get help when there is a problem or question.

14. Sample Customer Satisfaction Service Questions • Answers to the questions can view as a scale: • 1-Strongly Agree; 2-Agree; 3-Neutral; 4-Disagree; 5-Strongly Disagree • My sales representative provides clear answers to my questions. • I am satisfied with the amount of communication I receive from my sales representative. • The quality of customer service at this company is better than that of its competitors. • This company has more product choices than those of its competitors. • Invoices are sent in a timely manner. • The staff are friendly and helpful.

15. Customer Satisfaction Survey There are two types of surveys: Relationship-based Survey Referred to as general customer satisfaction research. Encompasses the entire customer relationship (from price and availability to customer service). Transaction-based Survey Complex transactions or business critical. Trying to specifically improve customer service or sales representative performance within your organization. Short and immediate.

16. Relationship-Based Survey Areas of customer service satisfaction: • Price • Quality • Availability • Performance • Value • Customer service & support • Company’s ability to deliver what was promised • Company’s ability to meet customer expectations • Competitive products & services

17. Transaction-based Survey – Different Methods • Transaction-Based Satisfaction Tracking (TST) --- A telephone or Internet-based survey methodology that measures and monitors customer satisfaction with recent service experiences. • Mystery shopping.

18. American Customer Satisfaction IndexReport on Commercial PilotsFederal Aviation AdministrationDepartment of TransportationNovember 2002 Introduction about ACSI and the FAA survey Overview of ACSI methodology The FAA survey Target segment Sample size Questionnaire and Interview Responses Results

19. FAA survey & ACSI • Customer satisfaction survey by FAA • 2002: the 4th year using ACSI • purpose: to produce indices of satisfaction, and indices of the drivers and outcomes of satisfaction. • ACSI: • a national indicator of customer evaluations of goods and services available to U.S. residents. • the only uniform, cross-industry/government measure of customer satisfaction. • producing indices of satisfaction, its causes and effects, for seven economic sectors, 38 industries, 190 private sector companies, two types of local government services, and the U.S. Postal Service. • allowing benchmarking between the public and private sectors, and for each customer segment, between one year's results and the next. • producing information unique to each agency on how its activities that interface with the public affect the satisfaction of customers. The effects of satisfaction are estimated, in turn, on specific objectives (such as loyalty in the agency).

20. Overview of ACSI methodology ACSI uses a tested, multi-equation, econometric model. Inputs to the cause and effect model come from surveys. For private sector industries: company scores for customer satisfaction and other model components are weighted by company revenues to produce industry indices. industry indices then weighted by revenues to produce economic sector indices. the sector indices, in turn, are weighted by the sector's contribution to the Gross Domestic Product (GDP) to produce the national ACSI. For federal government agencies: each is weighted by the budget expended on activities for the chosen customer segment to produce a federal government ACSI.

21. FAA survey Target segment: commercial pilots with commercial certificates Sample size: 260 drawn from the database of certified airmen maintained at the Civil Aviation Registry (AFS-700). Questionnaire and Interview: questionnaire: agency-specific in terms of activities, outcomes, and to specific question areas interview: via telephone, using CATI (computer-assisted-telephone-interviewing) terminals programmed for the specific questionnaire, at different times of day.

22. FAA survey (cont.) Responses: Q1. Before you had any experience with the FAA, you probably knew something about the FAA. Now think back and remember your expectations of the overall quality of the Federal Aviation Administration. Please give me a rating on a 10 point scale on which "1" means your expectations were "not very high" and "10" means your expectations were "very high." How would you rate your expectations of the overall quality of FAA? Valid Cum Value Label Value Frequency Percent Percent Percent 1 2 .8 .8 .8 2 2 .8 .8 1.6 3 7 2.7 2.8 4.4 4 10 3.8 4.0 8.4 5 51 19.6 20.3 28.7 6 21 8.1 8.4 37.1 7 32 12.3 12.7 49.8 8 69 26.5 27.5 77.3 9 26 10.0 10.4 87.6 10 31 11.9 12.4 100.0 Don't know 98 6 2.3 Missing Refused 99 3 1.2 Missing ---------- ---------- ----------- Total 260 100.0 100.0 Mean 7.044 Valid cases 251 Missing cases 9

23. FAA survey results Satisfaction (ACSI): The 2002 customer satisfaction index (ACSI) for commercial pilots is 64 on a 0-100 scale, up a significant 5 points from 2001. Drivers of Satisfaction: Air Traffic Services: Air Traffic Control to ensure safety, ATC personnel skills and knowledge Certification: accuracy of pilot certification process, test & flight check credibility… Policy, Standards, Regulations: clarity of information for policies, standards and regulations, and FAA standards established for the regulation of pilots contribute to aviation safety

24. FAA survey results (cont.)

25. Conclusion of survey Commercial pilot perceptions of the quality of FAA’s services improved over the past 12 months. FAA significantly improving nearly every identified activity this year. FAA to focus its improvement efforts on both the clarity of regulations and how these regulations are perceived to contribute to safety. FAA to maintain and build upon the successes of the past year. FAA personnel to remember that changes in customer service practices often require time to become permanent, and any lapse in service quality will likely lead to a decline in customer satisfaction (ACSI). FAA’s goal: to keep pressing forward, and work vigorously to augment the improvements already achieved.

26. FAA Customer Satisfaction survey

27. Conclusion • Customer Satisfaction – definition • Importance and results of doing survey in Customer Satisfaction • Methods to do C.S. survey: online & offline • Types of survey: relationship-based vs. transaction-based • Case study: FAA 2002 survey on C.S.