The importance of customer satisfaction in service organisations

Essay by kkaragiannaUniversity, Bachelor'sA-, April 2004

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Explain the importance of customer satisfaction in service organisations

The aim of this essay is to explain the importance of customer satisfaction in service organisations. Clear meaning of the customer satisfaction has been provided along with the causes and results from the effective implementation. J. Heskett's "service-profit chain" model has been used in order to understand the relationships between profitability of a service organisation with customer satisfaction and loyalty and the outcomes of this relationship. Examples has been illustrated based on the first five case study from Lovelock's book "Services Marketing: A European Perspective" (See appendix 1). Furthermore the identification of methods and techniques of customer satisfaction measurement has been illustrated. Finally techniques and strategies for customer satisfaction improvement have been discussed.

More and more service organisations nowadays recognise that customer satisfaction is crucial for business success. Additional, understanding and anticipating what customers want and require for the future, has led service organisations scrutinising for possible service features and managerial factors that will enable them to stimulate a positive response and astonish their customers.

However, a question has been raised of which service attributes and qualities are decisive for the satisfaction of the customer and which features merely prevent dissatisfaction (Matzler et al., 1996) .

Various model have been developed attempting to clarify the meaning of customer satisfaction, what causes it and what results from it. J. Heskett et al. has developed the service-profit chain (appendix 2), which establishes relationships between profitability, customer loyalty and employee satisfaction, loyalty and productivity . Moreover, Kano's (1984) model of customer satisfaction (appendix 3) distinguishes between three types of product requirement, which influence customer satisfaction in different ways when met. Must-be requirements, one-dimensional requirements and attraction requirements (Matzler et al., 1996). Furthermore, in his journal "Customer satisfaction and the internal market:...