lecture 4 plus class notes: post decision processes Flashcards
Whu is customer satisfaction important?
Leads to repeat purchases and more profitable for firms than one time purchases
can benefit from positive word of mouth, referrals
want repeat business
how to ensure repeat business
Make sure teh customer is happy and other reasons like lack competition
could cut prices
Managers are interested in getting repeat business through customer satisfaction and not through cutting prices
bc cutting prices can lead to lower prices anf firms dont have control on competition so firms dont want to rely on lack of competition for repeat purchasing
what is satisfaction
Attitudes based on actual experience with the brand
Lets say you have driven a car before, then you have experience with the brand, then your attitude toward the car will be your satisfaction
May form attitudes on products that you have never used before bc of second information.
Attitudes can be based on advertising (not experience )
Today we are focusing on attitudes formed when you use the brand
How do firms measure customer satisfaction?
They normally use surveys. Survey customers who have used their products. Ex: staying at the hyatt hotel and filling out a survey. Asks satisfaction questions like asking about satisfaction of customer service
two models of satisfaction
Disconfirmation model
Attribution model
if managers know what drives satisfaction they can
take action to customize satisfaction
what factors does the disconfirmation model drive
performance, expectations and disconfirmation
performance
Performance means the performance of the brand on attributes
the better the brand performs these attributes = the greater customer satisfaction will be= happier
expectations
expectations that customers sometimes have about attributes.
what does the disconfirmation model say about expectations
What the disconfirmation model says is that high expectations are good, as long as performance is close to expectations → reason for this is the confirmation bias. The mind has a tendency to confirm expectations. The mind is looking to confirm these high expectations. As long as performance is in the ballpark of these expectations, the mind will think that performance is consistent with expectations.
disconfirmation model
has the biggest effect on satisfaction
If performance is far below expectations = negative disconfirmation → reduces satisfaction
If performance far exceeds expectations- positive disconfirmation→ increases satisfaction
If a firm wants really higher satisfaction rates, they have to aim for positive disconfirmation, have to make sure that customers are pleasantly surprised
How can managers use the disconfirmation model to maximize satisfaction?
Managers should do two things to maximize satisfaction : hook and surprise
what is hook
Hook: setting high expectations on one attribute, through advertising. Also meet these expectations
Ex: showing an ad for airplanes about having internet
Hook gives customers a reason to buy, its a reason for satisfaction
what is surprise
spuroise the customer when they are using the product. Firms should have certain attributes in reserve . have low expectations on an attribute and when the customer uses the product, their expectations will be exceeded
Ex: airlines could have unexpected legroom, upgrades, welcome drink, leather seats, quality of food
Surprise gives customers a reason to be highly satisfied
really maximizes satisfaction
challenging thing about surprise
difficult to sustain, only applies for a first or second time
It becomes unsurprising over time
to summarize hook and surprise
1) Don’t use only hooks, keep some surprise
2) Surprise can become unsurprising → less effect of that attribute on satisfaction
3) Need to be creative to develop new attributes → could be new versions of existing attributes. Ex: new food items on the menu
4) Minor surprise better than no surprise
5) Customers can react negatively if attribute is withdrawn→ losses loom larger than gains. Customers are sensitive to losses
attribution model
Applies when there is negative disconfirmation → performance is much below expectations
what are the three thoughts in the attribution model
focus, stability and control
firms should provide info about these attributes to minimize dissatisgcatio.
focus
if theres been poor performance, customers think about who is responsible for this event
For negative events, there are many possible causes like for the plane being delayed could be due to weather, air traffic
Availability heuristic comes into play → people hold the airline responsible . airline is the most vivid
Firms should be proactively informing customers on who is responsible or to blame , assuming its not the airlines fault
stability
how often does this event happen
Airlines should proactively inform customers that this is a rare event , assuming it is a rare event
control
what is being done about this poor performance
Firms should provide updates to customers about what action is going to be taken to solve this problem
results of dissatisfaction
Disatisfaction hurts the firm a lot in the long run→ its been found that people are much more likely to tell others about bad things that happen to them than good things that happen to them
Now customers can post their comments online so they can tell many more people when something bad has happened to them
Dissatisfaction can hurt the firm a lot more than satisfaction can help the firm
Word of mouth has become much more expansive bc of social media
Negative word of mouth can hurt the firm in many ways –. We share bad things more than good, losses loom larger than gains, greater memory for bad than good
Complaints can also be an opportunity that the firm can exploit to help the firm in the long run→ if an airline gives compensation way above consumers expectations , this is positive disconfirmation, has a strong influence of satisfaction that can lead to positive word of mouth which can help the firm
using surprise effectively
1) stream of surpises
2) Creativity required
surprises require creativity
3) smaller surprise are okay
4) Cheaper surprises better
5) Easier to program surprises in digital products
zone of delight
Have to shoot for the zone of delight
need customer loyalty
This is where your customer HOPES for something, ASKS for it, but really does not expect you to provide it.
why is dissaftoscaton common for services
Mst physical goods are first produced in a factory and then delivered to customers
Most services are not produced in a factory but produced at the point of sale by employees
Because services are produced at a point of sale:
1) Factory level quality control not possible
2) Employees are human and may not deliver consistent quality
3) Service quality might depend on the behaviour of customers
4) The behaviour of other customers might influence service quality
dissatisfaction can lead to negative word of mouth
Before the internet, dissatisfied customer were up to 9 people now its up to 16
Negative info reaches a lot more people now
Negative info has greater impact than positive info → losses loom larger tyhan gains (negative attitudes), greater memory for bad then good (long memory), we share bad things more than good things (negative social influence and repetition of bad news about the brand)
when can negative publicity help firms
creates brand awareness
surprise benefits for short and long term
Short Term Benefits => Repeat Purchase
* Long Term Benefits => Positive Reviews, Confirmation Bias
Short Term vs. Long Term
stream of surprises
Definition: The stream of surprises refers to a consistent flow of unexpected, delightful experiences that keep consumers engaged and interested. It can take the form of product features, marketing strategies, or customer service interactions.
Importance: Regularly introducing surprises can enhance customer loyalty, as consumers look forward to the next unexpected benefit or experience. It helps maintain a dynamic relationship with the brand
How Can Firms Respond to
Dissatisfied Customers &
Negative Word of Mouth?
firms can reply to complaints
Firms Can Use Complaints as an
Opportunity to Increase Satisfaction
Negative Publicity/Controversy
Can Sometimes Help Firms
Build Brand Awareness
customer journey maps
identify pain points (eliminate negative cues) and pleasure points (harmonize impressions and oisitve cues)
