Customer Dissatisfaction and its Outcomes

Table of Contents:-

Customer Dissatisfaction
Proactive Customer Dissatisfaction Management
Outcomes of Customer Dissatisfaction

Customer Dissatisfaction

Customer dissatisfaction means losing a business. A dissatisfied customer can be detrimental to a business, as it often results in the loss of a customer. It occurs when an unhappy customer decides to stop hiring or purchasing the services or products from the previous company and finds another suitable alternative that satisfies its needs, which the organisation failed to deliver. As a result, customer dissatisfaction poses a substantial threat to any business. On the other hand, retaining a customer can be a valuable opportunity for a business. For example, a product manufacturing company may experience customer dissatisfaction due to poor quality of the product or inadequate after-sales services. In contrast, the service sector is more likely to experience customer dissatisfaction based on the quality of the service itself.

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Companies usually differentiate between two types of churn: voluntary and involuntary. Voluntary churn happens when a customer decides to switch to another company or service provider, while involuntary churn occurs due to circumstances that are beyond the customer’s control, such as relocation to a long-term care facility or relocation to a distant location.

Proactive Customer Dissatisfaction Management

In most applications, analytical models exclude involuntary reasons for churn. Instead, analysts focus on voluntary churn because it is usually caused by factors of the company-customer relationship that companies can control, such as billing interactions and after-sales support.

However, it has been suggested that the best management processes do not try to eliminate all defections. Regardless of a company’s efforts to retain them, some customers will defect inevitably. Furthermore, attempting a zero dissatisfaction strategy is likely to represent an inefficient use of resources. A good dissatisfaction management program will attempt to identify those who have or are about to leave. Identifying customers who are on the verge of defection can be a challenging task. It requires a keen eye for detail and a profound understanding of consumer behaviour.

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Unfortunately, not all customers reveal clear signs of dissatisfaction before they decide to leave. This can make it difficult for businesses to proactively address issues and retain their customers. It is much simpler in those services where a contractual agreement is in place. In such businesses, customers may begin to complain or suggest that a competitor is offering a more affordable option at a lower price, as the original contract approaches its expiration date.

Outcomes of Customer Dissatisfaction

There are various options available to a dissatisfied consumer. The initial decision to be made is whether or not to pursue any external course of action. By taking no action, the consumer decides to tolerate an unsatisfactory situation. This decision is a function of the importance of the purchase to the consumer, the ease of taking action, the consumer’s existing level of overall satisfaction with the brand or outlet, and the features of the consumer involved. It is important to acknowledge that even in the absence of any external action, consumers are likely to have a less favourable attitude and a negative perception toward a store or brand.

1) Brand Switching

The main behaviour in exit is to leave the shop and start being a customer in another This behaviour has costs and gains. The exit costs are related to access to alternatives and the degree of loyalty. Exit costs tend to be higher in those cases when there are no alternative shops available. In such cases, customers may be hesitant to exit, especially if they believe that voicing their concerns may lead to a solution.

2) Complaining Behaviour

Studies on consumer complaint behaviour have focused on behavioural responses, that is, those consumer actions that directly convey an “expression of dissatisfaction”.These behaviours include a range of actions, such as lodging complaints with manufacturers and retailers, seeking assistance from voluntary organizations, filing complaints with public consumer protection agencies, turning to an ombudsman, or even taking legal action. Besides this, people may choose to share their unfavourable experiences with friends and family. It is important to note that these actions can have a considerable impact on a company’s reputation. Hence, businesses must prioritize customer satisfaction and promptly address any concerns or grievances.

3) Negative Word-of-mouth

Negative word-of-mouth behaviour to other consumers represents another form of dissatisfied consumer behaviour that is expected to increase in the face of a dissatisfying experience. This effect is especially likely when the product or service failure is severe, attributions for the failure are external, or high levels of social activity characterise the disappointed consumer.