1. Building Customer
Satisfaction
Dr. Vikram Sharma

2. Session Coverage
Defining Customer Value and Satisfaction
Customer Satisfaction Through
Quality
Service
Value
Delivering Customer Value and
Satisfaction

3. Profit through customer satisfaction
Most companies adopt marketing concept
only when driven by adverse
circumstances:
• Sales decline
• Slow market growth rate
• Changing buying patterns
• Increasing competition
• Increasing expenditures

4. How can companies increase value
to Customer?
• Most obvious answer..reduce price !!
• Different sources of value
• Quality Improvement
• Add attribute that enhance performance
– Identify purchase patterns
• Observe how customers use product?

5. Organizational Charts
Customer
as True
Profit
Centers

6. Satisfaction is...
...a person’s feelings of pleasure or
disappointment resulting from
comparing a product’s perceived
performance (or outcome) in
relation to his or her expectations.
•Consumer Expectations Come from:
•Past Buying Experiences
•Friends & Associates advice
•Competitor's Information and Promises

7. Satisfied Customers:
Buy more (new products & upgrades)
• Spread favorable word-of-mouth
• Pay More (less price sensitive)
• Offer feedback
• Reduce transaction costs
• Stay Longer-Make companies more
profitable.

8. Building Customer Satisfaction, Value,
and Retention
It is no longer enough to satisfy
customers. You must delight them.
Kotler on Marketing

9. Defining Customer Value and
Satisfaction
• Customer Perceived Value (CPV)
– Total customer value
– Total customer cost

10. Defining Customer Value
and Satisfaction
• Customer Perceived Value (CPV)
– It is the difference between the prospective customer’s
evaluation of all the benefits & all the costs of an offering
and the perceived alternatives
• Total Customer Value:
– Perceived Value is combination of economic , functional
and psychological benefits
• Total Customer Cost:
– Bundle of costs customer incurs in evaluating, obtaining,
using & disposing market offering

11. Determinants
of Customer
Delivered
Value

12. CPV-HP V/S DELL
• HP beginning to outpace Dell in Customer
Perceived Value.
• Dell highly successful in low priced computers-
logistic efficiency, after sales service (LOW
COST)
• Co shifted its Customer Centric Call Center to
India and Philippines to cut cost.
• Understaffed call centers led to 30 min wait for
customers.
• To discourage customers, Toll Free Number,
removed from the website.

13. HP V/S DELL
• Customer Satisfaction Dips, competitors match
its quality and prices and offered improved
services.
• Dell MS and Stock Price Decline Sharply
• Michael Dell Confesses “Team was managing
cost instead of managing quality”
• HP “Perusing solution approach based on
strengthening channel relationships.
• “HP-One of the easiest sales methods is to go
into an account that has been serviced by Dell”

14. HP on Customer Satisfaction
• A very satisfied customer is 6x more likely to
repurchase than a satisfied one
• The average customer with a problem
eventually tells 9 other people
• Acquiring a new customer costs 5-7x more
than retaining one
• An increase in customer retention of 5% can
boost profits 25-85%

15. Virgin Atlantic-Value Enhancement
An Advertisement-A customer says
• VA picks me up from home, gives me a
boarding pass at my car window. I go
straight to VA lounge. On the flight, I can
get my hair cut, my shoes polished. I am
asked how and when I want my meal.
When I get off, I don’t have to queue for
taxi in a strange place.

16. Measuring Satisfaction
Periodic Surveys
Periodic Surveys
Customer Loss Rate
Customer Loss Rate
Mystery Shoppers
Mystery Shoppers
Monitor competitive
Monitor competitive
performance
performance

17. Tools for Tracking and Measuring
Customer Satisfaction
Complaint and A customer-centered organization makes it easy for
suggestion customers to register suggestions and complaints. Some
systems: customer-centered companies-P&G, General Electric,
Whirlpool—establish hot lines with toll-free numbers.
Companies are also using Web sites and
e-mail for quick, two-way communication.
Customer Studies show that if customers are dissatisfied with
satisfaction purchases, less than 5 percent will complain. Most
customers will buy less or switch suppliers. Responsive
surveys:
companies measure customer satisfaction directly by
conducting periodic surveys. While collecting customer
satisfaction data, it is also useful to ask additional
questions to measure repurchase intention and to measure
the likelihood or willingness to recommend the company
and brand to others.

18. Customer-Product Profitability Analysis
•20-80-30
•20% of Customers, generate 80 % of profit.
•Half of your profit is lost in serving bottom 30% of your customer base

19. Estimating Lifetime Value
• Annual customer revenue: $500
• Average number of loyal years: 20
• Company profit margin: 10
• Customer lifetime value: $1000

20. Five Levels of Relationships
• The company sells the product but does not
• Basic follow-up
• The company sells the product and
encourages the customer to call when they
• Reactive have problems or questions.
• The company’s representative checks on
customer after the sales and the event to make
• Accountable sure things were satisfactory and to get
feedback.
•
• Proactive The salesperson or others in the company
phone customers from time to time to seek
suggestions.
•
• Partnership The company works continuously with the
customer to discover ways to develop better
value.