CHAPTER 8 :

MEASURING SUCCESS OF
RETENTION & RECOVERY

DR. MUHAMMAD HAFIZ

ABD. RASHID

FACULTY OF
BUSINESS & MANAGEMENT
 WHAT YOU WILL LEARN..

■ 6 Signals of effectiveness.

■ Customer satisfaction equation.

■ Service quality dimensions.

■ E-Service quality dimensions.

■ Tools to measure effectiveness.

■ What to ask in a survey?

■ Actions to be avoided in conducting survey.

■ Factors influencing customer satisfaction rates.

■ Customer satisfaction rating point scale.

■ Major strategies to avoid dissatisfaction.

6 SIGNALS OF EFFECTIVENESS
CUSTOMER SATISFACTION EQUATION
 SERVICE QUALITY (SERVQUAL) DIMENSIONS

A research by Parasuraman, Zeithmal & Berry suggested that customer

judge service quality based on five dimensions:
1.Reliability: ability to perform the promised service dependably &
accurately.
2.Responsiveness: willingness to help customers & provide prompt
service.
3.Assurance: employee’s knowledge & courtesy & their ability to inspire
trust & confidence.
4.Empathy: caring, individualized attention given to customers.
5.Tangibles: appearance of physical facilities, equipment, personnel &
written materials.

Services Marketing: Integrating Customer Focus Across the Firm. Valarie A. Zeithmal & Mary Jo Bitner. 3rd Edition. Page 93.
 E-SERVICE QUALITY DIMENSIONS

There are eight dimensions that customers use to evaluate

websites:
❖Accessibility: Is the site easily found? This is measured by the
number of search engines where a site is registered and by the
number of links to related sites.
❖Navigation: How easy is it to move around? A good rule of thumb
is to be within 3 clicks of the information that is most desired by
customers.
❖Design and presentation: What is the image projected from the
site? Design elements include colors, layout, clarity, and originality.
❖Content and purpose: The substance and richness of the site.

Services Marketing: Concepts, Strategies & Cases. K. Douglas Hoffman & John E.G. Bateson. 3rd Edition. Page 350.
 E-SERVICE QUALITY DIMENSIONS (CONT..)

❖ Currency and accuracy: The most current (up-to-date)

and precise information are displayed on the site.
❖ Responsiveness: The company’s propensity to respond to
email messages, chat rooms, etc.
❖ Interactivity, customization, and personalization: The
high-touch level of service provided. All these elements relate
to the empathy dimension of service quality.
❖ Reputation and security: Relate to customer confidence
issues. Customer confidence is being built via proven
encryption technologies.

Services Marketing: Concepts, Strategies & Cases. K. Douglas Hoffman & John E.G. Bateson. 3rd Edition. Page 350.
TOOLS TO MEASURE EFFECTIVENESS

Customer Service: A Practical Approach. Elaine K. Hariris. 4th Edition. Page 143.
 WHAT TO ASK IN A SURVEY?

Basic customer satisfaction questions:

■ How satisfied are you with the purchase you made?
■ How satisfied are you with the service you received?
■ How satisfied are you with our company overall?

Customer “loyalty questions”:

■ How likely are you to buy from us again?
■ How likely are you to recommend our product/service to
others?
■ How likely are you to recommend our company to
others?

Customer Service: Career Success Through Customer Loyalty. Paul R. Timm. 4th Edition. Page 136.
ACTIONS NEED TO BE AVOIDED IN
CONDUCTING SURVEY

1. Don’t do survey too often.

2. Don’t use meaningless data.
3. Don’t do a survey if-few
respondents.
4. Don’t keep your survey a secret.
5. Don’t use scales that speak to
nobody.
6. Don’t rush into quantitative.
research if don’t understand
customers.
 FACTORS INFLUENCING CUSTOMER
SATISFACTION RATING

■ Response bias:
– A bias in a survey results because of responses being received from
only limited group among the total survey number.
■ Data collection method:
– The method used to collect information, such as questionnaires,
surveys & personal interviews.
– Studies indicate that 10% difference exists between questionnaires
administered orally & self-administered questionnaires.
■ Question form:
– The way the question is asked on the questionnaire (positively or
negatively).

Services Marketing: Concepts, Strategies & Cases. K. Douglas Hoffman & John E.G. Bateson. 3rd Edition. Page 310.
 FACTORS INFLUENCING CUSTOMER
SATISFACTION RATING

■ Timing of the question:

– The length of time after the date of purchase in which
questions are asked.
– Customer satisfaction appears to be highest immediately
after a purchase & then begins to decrease over time.
■ Mood:
– Mood of the customer while completing the survey.
– Research shows that customers in positive moods states
make more positive judgment, rate product they own more
favorably & tend to see brighter side of things.

Services Marketing: Concepts, Strategies & Cases. K. Douglas Hoffman & John E.G. Bateson. 3rd Edition. Page 310.
 CUSTOMER SATISFACTION RATING
POINT SCALE

1. Exemplary
2. Above Average
3. Average
4. Below Average
5. Unsatisfactory

Customer Service: Building Successful Skills for the Twenty-First Century. Robert W. Lucas. 3rd Edition. Page 338.
 CUSTOMER SATISFACTION RATING
POINT SCALE

❖ Exemplary
❖ Service that is out of the ordinary and
unexpected falls into this category.
❖ E.g: A beauty salon owner provide a Swedish
massage to a regular customer on her birthday.
❖ Above Average
❖ Service in this category goes beyond the normal
and may pleasantly surprise the customer, but
does not dazzle or surprise the customer.
❖ E.g: A clerk at a bank gives a customer a free
calendar at the end of the transaction.

Customer Service: Building Successful Skills for the Twenty-First Century. Robert W. Lucas. 3rd Edition. Page 338.
 CUSTOMER SATISFACTION RATING
POINT SCALE (CONT..)

❖ Average
❖ Service at this level is expected by a
customer.
❖ E.g: An accountant finishes a client’s tax
return on time, as promised.
❖ Below Average
❖ Service provided at this level is not as
expected and disappoints customers.
❖ E.g: A patient waits in a doctor waiting room
longer beyond her scheduled appointment,
and when is finally seen, no one apologizes.

Customer Service: Building Successful Skills for the Twenty-First Century. Robert W. Lucas. 3rd Edition. Page 338.
 CUSTOMER SATISFACTION RATING
POINT SCALE (CONT..)

❖ Unsatisfactory
❖ Service at this level is unacceptable
and typically leads to a breakdown.
❖ E.g: A plumbing company that
advertises “immediate emergency
service” takes four hours to fix a
leaking pipe in a wall, and one wall
is collapse.

Customer Service: Building Successful Skills for the Twenty-First Century. Robert W. Lucas. 3rd Edition. Page 338.
 CUSTOMER SATISFACTION INDEX

DEFINITION
Survey approach that can be used to identify, understand
and measuring customer satisfaction

BENEFITS
❖Identifying areas of strength, to improve business
❖ Measure performance against competitors
❖ Maximize time value and minimize administrative costs.

How to Measure Customer Satisfaction. Nigel Hill, John Brierley & Rob Macdougall. 2nd Edition. Page 92.
 STEPS TO CALCULATE THE SATISFACTION
INDEX
Step 1 : Determine Importance Scores
• Information can be gathered through personal interviews or
electronic interview conducted to employees.
Attributes Importance scores
Hotel location 9.2
Range of the furniture 9.1
Price level 9.0
Cleanliness 8.9 In this example,
important scores are
Checkout time 8.7 provided based on the
Staff helpfulness 8.6 scale of 1 to 10 (rated
by the employees)
Parking 7.8
Staff appearance 7.2
TotalHow to Measure Customer Satisfaction. Nigel Hill, John
68.5
Brierley & Rob Macdougall. 2nd Edition. Page 92.
 STEPS TO CALCULATE THE SATISFACTION
INDEX (CONT…)

Step 2: Calculating the Weighting Factors

• The importance scores are used to calculate the weighting

factors.
• To calculate the weighting factors, simply total all the
importance scores (next slide).
• In this example, they add up to 68.5. Then express each one
as a percentage of the total.
• Using ‘hotel location’ as an example, 9.2 divided by 68.5
multiplied by 100 produces a weighting factor of 13.4
percent.

How to Measure Customer Satisfaction. Nigel Hill, John Brierley & Rob Macdougall. 2nd Edition. Page 92.
 STEPS TO CALCULATE THE SATISFACTION
INDEX (CONT…)
•Step 2: Calculating the Weighting Factors (example)

Attributes Importance scores Weighting factors (%)

Hotel location 9.2 13.43
Range of the furniture 9.1 13.28
Price level 9.0 13.13
Cleanliness 8.9 12.99
Checkout time 8.7 12.70
Staff helpfulness 8.6 12.55
Parking 7.8 11.38
Staff appearance 7.2 10.51
Total 68.5
How to Measure Customer Satisfaction. Nigel Hill, John Brierley & Rob Macdougall. 2nd Edition. Page 92.
 STEPS TO CALCULATE THE SATISFACTION
INDEX (CONT…)

Step 3: Calculating the Satisfaction Index

• The third step is multiplying each satisfaction score (rated by

the customers) by its corresponding weighting factor.
• In the end, it will produce weighted scores (next slide).
• After adding up all the weighted scores, the hotel’s weighted
average satisfaction score is 8.43 percent, out of 10.
• Just simply convert the figure into a percentage, and then
you will get the satisfaction index for the Hotel A is 84.3%. In
this example we also can say that the Hotel A is 84.3 percent
successful in satisfying its current customers.

How to Measure Customer Satisfaction. Nigel Hill, John Brierley & Rob Macdougall. 2nd Edition. Page 92.
 STEPS TO CALCULATE THE SATISFACTION
INDEX (CONT…)
•Step 3: Calculating the Satisfaction Index
Attributes Average Weighting Weighted
Satisfaction scores factors (%) scores
Hotel location 9.1 13.43 1.22
Range of the furniture 8.9 13.28 1.18
Price level 9.0 13.13 1.18
Cleanliness 8.7 12.99 1.13
Checkout time 8.6 12.70 1.09
Staff helpfulness 7.9 12.55 0.99
Parking 7.5 11.38 0.85
Staff appearance 7.6 10.51 0.79
Weighted average 8.43%
Satisfaction Index 84.3%

How to Measure Customer Satisfaction. Nigel Hill, John Brierley & Rob Macdougall. 2nd Edition. Page 92.
 EXERCISE
QUESTION:

AMONG THE SIX SIGNALS OF EFFECTIVENESS,

WHICH ONE IS THE MOST IMPORTANT?
JUSTIFY YOUR ANSWER