Factors Influencing Customer Satisfaction 

Customer Satisfaction Meaning, Determinants and Factors

Table of Contents:-

  • Customer Satisfaction Meaning
  • What is customer satisfaction
  • Factors Influencing Customer Satisfaction 
  • Determinants of Customer Satisfaction 
  • Importance of Customer Satisfaction 

For every business, ensuring customer satisfaction is a top priority. It’s essential to go the extra mile in delivering a positive experience that goes beyond what customers expect. This approach helps businesses build strong connections with their customers, nurture loyalty, and ultimately set the stage for growth and success.

Customer Satisfaction Meaning

One of the important elements of the post-purchase stage is satisfaction. Satisfaction is the customer’s situation of being adequately compensated in a purchasing situation for the sacrifices made by him. Adequacy of satisfaction is measured by comparing actual experiences of previous purchases and consumption with the expected need-satisfying capability of the brand. There are various definitions and approaches which are accepted widely and can be used to explain the concept of satisfaction.

According to Hunt, “Satisfaction is a kind of stepping away from an experience and evaluating it. One could have a pleasurable experience that caused dissatisfaction because even though it was pleasurable, it was not as pleasurable as it was supposed or expected to be. So satisfaction/dissatisfaction isn’t an emotion, it’s the evaluation of an emotion.”

At the stage of post-purchase, customers are either satisfied or dissatisfied with their purchase. Every customer has some specific expectations from the products and services, some of which are explained below: 

1) The quality and functioning of the products and services, i.e., the expected advantages that a product can provide.

2) The efforts and the cost to be spent before achieving the direct benefits from the products and services

3) The cost and social benefits that a customer can receive as an outcome of buying the product or service, i.e., an expected benefit for society and other people, from the purchase of the product.

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what is customer satisfaction

The term customer satisfaction is used to measure how well the expectations of a customer are fulfilled by utilising the products and services of a company. It acts as an essential performance indicator of a business and is also one of the four perspectives that together constitute a balanced scorecard.

Marketing professionals consider customer satisfaction to be the foremost point of interest. In other words, customer satisfaction means how much the customer is pleased with the performance and delivery of products and services offered by the organization.

It is the foremost goal of any business to ensure that its customers are happy and satisfied with their products or services. Customer satisfaction is an important factor that determines the success of a business. It is the key to building a loyal customer base and establishing a positive reputation in the market.

“Gap Model” is most frequently used to measure the level of customer satisfaction. The equation given below describes the gap model:

Customer Satisfaction = Delivery – Expectations

The term delivery refers to the perception that a customer forms about a product or service after using it, while expectations refer to what the customer had expected from the product or service offered by the company. Hence, It is the difference between what the customer expected and what they received.

To ensure customer satisfaction, it is important to manage their expectations and deliver a product or service that meets or exceeds their expectations. This can be achieved by providing clear and accurate information about the product or service, setting realistic expectations, and delivering on promises made to the customer by the company.

For example, if a customer bought a product which he thought would last for 3 months but lasted for 6 months, this will make the customer feel much more satisfied. On the other hand, if the same product lasts only for one month, it can lead to effective customer dissatisfaction. Therefore, expectations can be considered a fundamental benchmark for measuring customer satisfaction.

By understanding the significance of delivery and expectations, businesses can enhance their customer satisfaction and build a loyal customer base. It is important to remember that customer satisfaction is not just about meeting their needs but also about exceeding their expectations.

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Factors Influencing Customer Satisfaction 

Four factors, as identified by the marketing researchers that impact customer satisfaction are as follows:

Factors Influencing Customer Satisfaction 

1) Product (Basic Design): The product is the basic factor that influences customer satisfaction. So, companies must design products and services according to the requirements of customers.

2) Sales Activity: Sales activity such as advertisement of the product, promotional programmes, supply or delivery channel to reach out to the customer, etc., also influence the satisfaction level of customers.

3) After-Sales: After-sales service also plays an important role in satisfying the needs of customers. It involves guarantee, service, and grievance handling. feedback, and a complete solution to all sorts of customer problems.

4) Culture: Customer satisfaction is also influenced by the culture of the organisation. Culture not only includes fundamental values and principles of an organisation, but it also includes methods through which the organisation attempts to impart those values in the behaviour of employees at various levels.

Determinants of Customer Satisfaction 

Various factors determine customer satisfaction, some of them are explained below:

1) Features of Products and Services

Customers feel satisfied when they evaluate products and services based on their features. For example, a customer can evaluate a hotel based on many of its features such as the facility for playing golf, pool area, comfortable rooms, privacy, restaurants, politeness and helpfulness of staff, tariffs, etc. 

2) Consumer Emotions

Emotions of consumers also play an important role in determining customer satisfaction with the products and services offered. Sometimes emotions exist beforehand such as temperament, life situations, etc., while some may develop after consuming the product.

3) Attributions for Service Success or Failure

Customer satisfaction is also determined by how the customer perceives the reasons behind the occurrence of any event. When the outcome of any service surprises the customer, i.e., either the service does not meet the expectation or it goes beyond the level, then the customer starts searching for the reasons behind such an outcome. That evaluation of the reasons may impact the level of satisfaction.

4) Perceptions of Equity or Fairness

The opinion of a customer regarding fairness, equality, etc., also determines customer satisfaction, where the principle of fairness plays a key role in determining the opinion of the customer regarding a product.

5) Other Consumers, Family Members, and Co-workers

Customer satisfaction is not only influenced by the features of the product or service and the belief or emotions of the customer but also by other people such as family members, co-workers and other consumers. For example, on a vacation trip, the satisfaction level of a person also depends on the behaviour and responses of members during the trip.

Importance of Customer Satisfaction 

The importance of customer satisfaction cannot be ignored. There is a direct relation between the level of customer satisfaction and the financial success of a business. Customer satisfaction score (CSAT) affects repeat purchase rates customer loyalty and word of mouth marketing. A high CSAT score can lead to increased revenue, customer loyalty, and valuable insights that can inform business decisions.

Achieving customer satisfaction is essential for the success of any business. It is imperative to ensure that customers are satisfied with the company’s products or services. This not only helps in retaining existing customers but also attracts new ones. 

Customer satisfaction is a reflection of the quality of service delivered by any business. It is necessary to understand the needs and expectations of customers and strive to meet them. This can be achieved by addressing customer complaints promptly, providing excellent customer service, and continuously improving the quality of products or services offered. 

In today’s competitive market, customer satisfaction is more important than ever. With the rise of social media and online customer reviews, a single negative experience can quickly spread and damage a company’s reputation. Hence, it is important to prioritize customer satisfaction and make it a top priority for the success of any business.

Customer satisfaction is of utmost importance in any business. This is the key to building a loyal customer base and ensuring repeat customer purchases. Here given below are some points that describe the importance of customer satisfaction:

1) Customer-oriented Management

During a customer satisfaction analysis, customers share their requirements, objectives, and experiences with the company. This valuable feedback allows the company to develop and improve its products and services to meet the expectations of its customers. By understanding the needs and desires of the customers, the company can make informed decisions that will ultimately lead to increased customer satisfaction and loyalty. It is important for companies to actively seek out and listen to customer feedback to stay competitive and successful in today’s market.

2) Comparison with the Competitors

One of the most valuable sources of information about competitors in the market is customers. They can provide insights into the best products and services available in the market, without demanding any payment in return. By tapping into this resource, businesses can gain a competitive advantage and stay ahead of the curve. It’s essential to remember that customers often have firsthand experience with a company’s offerings, and their feedback can be invaluable in shaping future strategies. So, if a business is looking to stay ahead of the competition, it should listen to its customers and take their feedback seriously.

3) Comparison Over Time

Customer satisfaction analysis is an important tool for identifying the factors that contribute to customer satisfaction and dissatisfaction. It is likewise important for developing and evaluating strategies that align with organizational goals. By conducting analyses regularly, businesses can track changes in the quality of their offerings over time.

To ensure that a business is meeting the needs of its customers, it is important to conduct customer satisfaction analyses regularly. This will help to identify areas where improvements can be made and develop strategies to address any issues that arise. By doing so, businesses can enhance customer loyalty and increase their bottom line.

In addition to identifying areas for improvement, customer satisfaction analysis can also help to track changes in customer satisfaction over time. By monitoring trends and patterns, they can gain valuable insights into the effectiveness of their strategies and make adjustments as needed.

Customer satisfaction analysis is a powerful tool for any business looking to improve customer satisfaction and achieve its organizational goals. By conducting periodic analyses and using the insights gained to inform their strategies, a business can build a loyal customer base and achieve long-term success.

4) Profit from Specific Insights

Customer satisfaction is a top priority for any organization. it can be achieved early and quickly by implementing strategic changes and innovations within an organisation, such as through goal-oriented teamwork and by developing or modifying the products and services according to the requirements of prospects. 

5) Loyalty

When customers are satisfied with the product or service of a company are more likely to become loyal customers of that company. A brand-loyal customer goes for repetitive purchases and gives positive feedback, ratings, and reviews to the company. Brand loyalty describes that trait of a customer due to which they select one company or product over another, to fulfil their specific need. It is a powerful force that can make or break a business. Therefore, companies need to prioritize customer satisfaction and strive to exceed their expectations. 

6) Reduced Costs

Retaining loyal customers costs much less than acquiring new customers. This is because a highly satisfied customer is more likely to make repeat purchases and may even be willing to pay more for a product or service from a particular company. A highly satisfied customer is likely to share their positive experience with friends and relatives about the product, providing valuable word of mouth publicity at no cost to the organization, which in turn reduces the cost of advertisement

7) Leads and Referrals

The current pool of highly satisfied customers is a great source that helps the organisation generate sales leads and referrals. By simply asking every other customer for leads and references, employees can tap into this resource and expand the customer base. Satisfied customers are more likely to recommend the product to their friends and family, which can lead to even more business opportunities.

8) Developing New Ideas

Customers know best about their needs and the amount they pay to satisfy them. Hence, companies can extract fresh and superior ideas from customers regarding product development by engaging with them. Such valuable feedback from customers helps companies to improve their offerings and also fosters long-term customer loyalty.

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Importance of Customer Satisfaction 

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