What Can A Company Do To Achieve Stellar Customer Service And Satisfaction?

Customer perception is more important today than ever before

Different customers may perceive 1 and the same product or service in unlike ways. A customer's perception of an offer may fifty-fifty deviate from what the producer or service provider or marketer had intended. This may cause serious problems in today'south attending economy. Everybody is exposed to more and more diverse information than always before. Information technology is hard enough for an offering to become a potential customer's attention at all. If the client's perception of this offer is an unfavourable one, it probably will non get a second chance to make a ameliorate impression.

Why customer perception is of import for businesses

In today'southward globalising economy competition is getting more and more vehement. That means it becomes more difficult for products and services to differentiate themselves from other offerings than ever before.

Not just is the number of competitive offerings rising due to globalisation of production, sourcing, logistics and access to information. Many products and services face up new competition from substitutes and from completely new offerings or bundles from industry outsiders. Since product differences are closed at an increasing speed and many companies try to win the boxing for customers by cost reductions, products and services tend to become commodities.

On the other manus, customer behaviour becomes more hybrid. On i hand, customers are increasingly toll sensitive – searching for bargains at marketplaces like ebay or ownership their groceries at discount markets. On the other hand they savour branded and luxury goods. One and the same person may programme a weekend trip with a no-frills airline and a stay at a five-star-hotel.In the consequence, customers have a wider choice of ofttimes less distinguishable products and they are much meliorate informed. For many offerings the residual of ability shifts towards the customer. Customers are widely aware of their greater ability, which raises their expectations on how companies should care for them.

Bringing it all together, it becomes always more difficult to differentiate a production or service past traditional categories similar price, quality, functionality etc.

In this situation the evolution of a strong relationship between customers and a visitor could likely testify to be a significant opportunity for competitive advantage. This relationship is non longer based on features like price and quality alone. Today it is more than the perceived experience a customer makes in his diverse interactions with a company (e.yard. how fast, easy, efficient and reliable the procedure is) that can brand or interruption the relationship. Problems during a single transaction can damage a and then far favourable customer perception.

Customer loyalty and customer perception

The consequence for companies is that they have to adapt their ways of competing for customers. Traditionally, companies have focused their efforts of customer relationship management on bug like customer satisfaction and targeted marketing activities like effect marketing, direct marketing or advertisement. Although doubtless necessary and beneficial, these activities are not longer enough. They narrow the relationship between company and customer downwardly to a detail set of contacts in which the company invests its efforts. About likely this will produce not more than than a satisfied customer who is well aware of the companies offerings and has a positive attitude towards them. However, a satisfied client is non necessarily a loyal one.[ii]

If a customer is satisfied that means that a product of service has met his expectations and that he was not dissatisfied past information technology. Customer satisfaction is doubtlessly very important. It is the precondition for echo purchases and information technology prevents the customer from telling others about his disappointing experiences. A loyal customer, however, is more than than a customer who oft purchases from a company.

The difference is the emotional bond which links the customer so closely to the company that he develops a clear preference for these products or brands and is fifty-fifty willing to recommend them to others. Loyal customers truly prefer a product, make or company over competitive offerings. Thus loyalty goes beyond a rational determination for known quality or superior price-performance-ratio. Information technology is about the customers' feelings and the client perception almost the brand or product.

When the customer makes his ownership decision, he evaluates the benefits he perceives from a detail production and compares them with the costs. The value a customer perceives when ownership and using a product or service go beyond usability. There is a set of emotional values too, such every bit social status, exclusivity, friendliness and responsiveness or the caste to which personal expectations and preferences are met. Similarly, the costs perceived past the customer, normally contain more than than the actual cost. They also include costs of usage, the lost opportunity to employ an other offer, potential switching costs etc. Hence, the client establishes an equation betwixt perceived benefits and perceived costs of one production and compares this to similar equations of other products.

Based on this, customer loyalty can be understood as to how customers feel near a production, service or brand and whether their perceived total investments with a it alive up to their expectations.The important point here is the involvement of feelings, emotions and perceptions. In today's competitive market place, these perceptions are becoming much more important for gaining sustainable competitive advantage.

Impact factors on customer perception

Customer perception is influenced past a diverseness of factors. Also the actual outcome – i.due east. did the production or service deliver the expected function and did information technology fulfil the customers need – the whole process of consumption and all interactions involved are of crucial importance. In today'southward globalised information driven economy this can also comprise issues like

How other customers or influencing groups perceive the product or brand
The degree to which the customer feels the actual marketing campaign addresses the virtually of import problems
Responsiveness and service quality of any affiliates, e.g. distribution partners

Customer perception is dynamic. First of all, with the developing relationship between customer and company, his perceptions of the company and its products or services will modify.

The more experience the client accumulates, the more than his perceptions will shift from fact-based judgements to a more than general meaning the whole human relationship gains for him. Over time, he puts a stronger focus on the consequence of the product or service consumption.

Moreover, if the customers' circumstances alter, their needs and preferences often change too. In the external environment, the offerings of competitors, with which a customer compares a product or service volition change, thus altering his perception of the best offer around. Some other betoken is that the public stance towards certain issues can change. This effect tin can achieve from way trends to the public expectation of skilful corporate citizenship. Shells intention to dump its Brent Spar platform into the ocean significantly altered many customers perception of which company was worth ownership fuel from.

Inquiry has been washed on the touch of market place share on the perceived quality of a production.[3] Depending on the nature of the product and the customers' preferences, increasing marketplace share can have positive or negative furnishings on how the customer perceives the production.

Positive effects of increasing market share on customer perception

Increasing market share can send out positive signals by acting as an indicator of superior quality that is recognised by more and more other customers. This effect is particularly strong for premium priced products. Customers ordinarily presume that a product must be of exceptional quality if it can gain such an unexpected market success despite its loftier toll.
Many brands offer positive emotional benefits of using a product that is pop in the markets.
The value of a product or service can ascension through increasing number of users of the same product, east.thousand. number of members of an online community, ameliorate availability of software for pop computer systems.

Negative furnishings of increasing market share on customer perception

For premium and luxury products, customers may interpret an increasing market place share into a loss of exclusivity and thus perceive it as less valuable.
The quality of services may suffer if they are consumed by increasing numbers of users. Diseconomies of scales and congestions can be observed with busy airports and many other services and then that customers may look out for other providers that promise more timely service and convenience.

The concept of customer perception does not merely relate to individual customers in consumer markets. It is too valid in business to business concern situations. For instance, a competitor benchmarking survey of a large industrial supplier revealed that the market leader, although recognised for excellent quality and service and known to be highly innovative, was perceived every bit arrogant in some regions.

If we take into consideration that there are almost four other large players with a similar level of quality and innovative ideas, this perceived arrogance could develop into a serious trouble. Customers here are well aware the master characteristics of all the offerings available at the marketplace are largely comparable. So they might use the development of a new product generation of their own to switch to a supplier that tin serve them not better or worse, but with more responsiveness and understanding.

Companies take done a lot to meliorate customer satisfaction and customer relationships in the past. As discussed above, this will non exist enough any more.

Measuring client perception

Any serious effort to manage client perceptions starts with a skilful measurement system. Companies must be truly willing to look at the whole process of interaction through the customers eyes. For many companies, this requires a more or less extensive shift in mindset, since almost departments from evolution to sales will exist involved.

Instance:

France Telecom has set up a 'Quality of Perceived Value Lab' at its R&D department. Aiming at a better understanding of customer perception, this unit'south main objective is in fact to requite a improve definition of the correlation that exists between technical problems in products an those perceived by users. By anticipation customers' feelings on production qualities, the laboratory provides perceived quality expertise on new solutions. Thus, France Telecom implements the issue of how customers perceive their products as early as in the product development process.

For details see: France Telecom. After the commercial launch: analysing use to understand the customer. Available under http://www.francetelecom.com/sirius/rd/en/ddm/en/technologies/ddm200411/techfiche3.php

The backbone of any customer perception direction and measurement system, nevertheless, is thorough market enquiry and surveys. At that place are several aspects of measuring customer perceptions.

First of all the company has to detect out how itself and its offerings are perceived by the customers. It is essential to identify what the client is actually buying and which features are most of import to him. Only this way it is possible to align the internal focus and resources to the customers expectation. This information is of greater value if information technology can be compared to the customers' perception of competitive offerings. Not just will this reveal relative strengths and weaknesses, information technology is too a valuable source of ideas for improvement.
Besides that, surveys should likewise identify the relative importance of several influencing variables in the eyes of the customer. To know what matters most to the customer helps to set priorities for projects.
Of course, as with any market inquiry activities, information technology should exist based on a careful customer segmentation. Client groups that differ by frequency of utilize, social status, geographical region or other criteria, are likely to have different expectations and preferences. Hence, they volition probably perceive an offering in unlike ways.
Zeithaml et al suggest to incorporate several behavioural-intentions questions to place signals that are potentially favourable or unfavourable for the company. Questions for behaviour intentions are potentially of college validity and richer diagnostic value than the "overall service quality" or "customer satisfaction" variables. Since these questions are directed at potential future actions they can not only indicate of changes in demand and market trends. They as well provide early warning signs and help to take to take timely cosmetic activeness. (Zeithamel, Five., Berry, L., Parasuraman, A. 1996. The behavioural consequences of service quality. Journal of Marketing. 60 (2), page 31)

How to manage customer perception – some examples

Merely if a company knows which features of its products and services or which other points of contact with the customer are considered most of import by the customers, it can develop advisable strategies. Such a strategy will not only help the company to strengthen the emotional bail with the customer through targeted improvements and activities. It may likewise accept the positive side effect that the customers' whole feel leads him to the conclusion that this company really understands his distinctive needs and really takes him seriously. Hence, the customers perception of the whole company may meliorate across a positive mental attitude towards a particular product.

Based on thorough research, companies can develop strategies and initiate targeted activities to manage and improve customer perceptions. This article finishes with some examples of how this tin be washed. It has to be taken into consideration, however, that there is no one correct strategy. Since these measures shall provide a distinctive competitive reward, they should be based on the particular competencies and resources of a company and they should aim at setting the company autonomously from the other market participants.

The service experience is closely linked to his perception of the total company and its offerings – be it products or service. A common idea of many authors is that it is non always necessary to deliver the admittedly perfect client experience. Instead it is of import to solve the customers need or problem in a matter that is perceived appropriate. For many retail products, for case, it will be sufficient in most cases to offer an appropriate group of substitute products, but non all particular products. In service situations, customers volition – depending on the bodily nature of the service – not expect an firsthand service commitment. They will withal expect a delivery within a time frame that is either market standard or meets the service promise of the actual service provider. Every bit long every bit the visitor keeps this promise, the customer will perceive this as satisfying. Byrnes even suggests that y'all earn more customer loyalty when you do a good job fixing a service problem, than if there had been no problem at all. The bespeak is to meet or excel the customers' expectations, not to attain some platonic level of product or service delivery.
Companies should try to make sure that their customers are fully aware of all the ways their offering can provide value to them. They have to explain the customer how this particular product can deliver more value than those from competitors. This approach means to widen the customer perception and to extend their awareness and appreciation to more features or aspects of the offering. Notwithstanding, this betoken has to be considered very carefully in social club not to produce an diametrical outcome.

Example

A customer who uses a large part of the functionality of his mobile phone might be delighted to learn about additional features and functions of the side by side generation production. Here the perceived value of the new product could exist increased by highlighting the utility of the new functions. Another blazon of client simply uses his mobile telephone to make and receive phone calls. He would probably not capeesh this type of communication. His equation of product value and cost will shift to the perception that he should pay an college toll for even more features he does not need and will not employ.

This bespeak again highlights the disquisitional importance of market research. In this example, market research would assistance the company to develop different advice strategies that focus on those product features that are of high priority for item market place segments.
A commonplace strategy to circumvent the loss of exclusivity associated with high market share is to leverage the brand by introducing new related brands. This is very efficient with fragrances or mode brands.
In situations in which customers perceive high market shares pb as a sign of quality, it is advisable to advertise a favourable high share, east.chiliad. "Americas near popular SUV", "Three out of v people already use …".
It is advisable to contact customers who indicate low results for loyalty or perception of the visitor in the surveys. Directly contact allows to place the roots of the problem and – if possible – to solve the issue. Besides solving some customer-specific problems and thus improving the perception of some individuals, such follow-ups may reveal some causes for problems that are common to wider parts of the customer base of operations. These are the starting points for some improvements with potentially meaning effects.
Follow-up is the authentication of whatsoever loyalty or customer perception surveys. The effects of whatsoever activities should exist measured and analysed by follow-up surveys to provide further insights.

By Dagmar Recklies
This article first appeared in Constructive Executive, ICFAI University Press, July 2006

Our Literature Recommendation on Client Perception and Customer Loyalty

Perception Matters: Customer Loyalty is Easier Than you Think
by Dominick R. Cox
The New Gold Standard: 5 Leadership Principles for Creating a Legendary Customer Experience Courtesy of the Ritz-Carlton Hotel Company
by Joseph Michelli
The Customer Service Solution: Managing Emotions, Trust, and Command to Win Your Customer
by Sriram Dasu, Richard Chase
This bookexplains how consumers perceive services and shows you how to enhance the customer experience–every fourth dimension.
UnSelling: The New Client Experience
past Scott Stratten, Alison Kramer
This bookis about everything just the sell. We put all of our focus on the private purchase transaction, while putting the residuum of our business deportment second. We've become blind to customer service, support, branding, experiences and fifty-fifty product quality.

[2] Krell, Due east. 2005. Differentiate a satisfied customer from a loyal ane.

[3] Hellofs, Fifty., Jacobson, R. 1999. Market place share and customers' perceptions of quality: When can firms grow their manner to higher versus lower quality? Journal of Marketing. 63(1), folio 16

[4] For details see: France Telecom. Later the commercial launch: analysing apply to understand the customer. This commodity is not longer available online

[5] Zeithamel, V., Berry, L., Parasuraman, A. 1996. The behavioural consequences of service quality. Journal of Marketing. sixty (2), folio 31

[half-dozen] Byrnes, J. 2005. Nail Customer Sevice. HBS Working Knowledge.

[7] Insight.MAS. What is Customer Perceived Value? This commodity is non longer available online