Page 277 - DMGT308_CUSTOMER_RELATIONSHIP_MANAGEMENT

Customer Relationship Management

Notes characteristics, their level of personal expertise, the nature of the competition, advertising and
PR influences, and the evolution of technology. Along with prior experience, customer desires
and expectations, the perceived product or service performance and ease of evaluating that
performance are all antecedents to a mental process customers go through to compare what was
expected and what was delivered. This “disconfirmation/confirmation/affirmation” process,
in which expectations are not met, met or exceeded can be visualized as a sigmoidal function
(Vavra, 1997). As “perceived performance exceeds expectations, satisfaction increases but at a
decreasing rate.” As performance falls short of expectations, satisfaction decreases at a faster rate
than it does for exceeding expectations (Vavra, 1997).
Following Vavra’s model, satisfaction is an antecedent to repurchase behaviour, but the
relationship between the two is mediated by several factors including the industry structure and
life cycle, switching barriers, channel structure, complaint management and relationship
management. Within this model are a host of measures companies need to collect. Before data
collection can be done however, the company must design a survey instrument. The challenge
is to formulate a customer satisfaction survey that balances internal company-process issues
with external customer needs issues. When designing this survey, companies can use a variety
of qualitative data collection techniques to determine the product or service characteristics and
attributes to survey. Once designed, surveys are distributed through a variety of channels:
1. face-to-face
2. mail, fax

3. e-mail
4. web and phone
Standard data analysis and data mining techniques are then employed to understand the represent
the survey data.
Others have also linked customer value analysis concepts to customer satisfaction to address
some of the inherent limitations in the customer satisfaction paradigm (Woodruff & Gardial,
2001). Woodruff & Gardial list the following differences between the paradigms:
1. Customer satisfaction is a reaction to value received. Customer value determination tries
to capture the relationship between the product, the user and their goals in a specific use
situation. Satisfaction measures the gap between expected and actual product performance.
Satisfaction measures and customer value determination complement each other.
2. Satisfaction measures are historical. They measure what has been delivered. Both the
customer value paradigm and the customer satisfaction paradigm build out, through
qualitative techniques, a model of how customers perceive value. The satisfaction paradigm
applies to model to value that has been delivered. The customer value paradigm is not
tied to post-delivery measures. Customer value can be measured before, during and after
consumption whereas satisfaction is measured after consumption.

The problem with many implementations of satisfaction surveys is that what is being measured
are attributes of a product from a company’s perspective rather than how the customer arranges
their hierarchy of values in the context of specific use situations. This can cause companies to be
measuring correctly but measuring the wrong thing.
Researchers and practitioners within the CRM, marketing and customer satisfaction circles have
argued among themselves as to which approach: loyalty, satisfaction, value, quality or some
other attribute is what matter most. The CVA crowd looks at CVA and CVM as the successor to
the customer satisfaction paradigm. Customer satisfaction practitioners have expanded their
model to resemble the CVA/CVM model. In some respects, the debate is pointless, since nearly
every paradigm tries to establish a sequence of causal relationships at three levels:

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