Theme E: Consumer participation 1 Flashcards
Relationship marketing
It is ‘the establishment and maintenance of long-term buyer-seller relationships”.
Relationship marketing capabilities
- Data collection and access
- Product and service customization
- Customer service procedures
- Multi-channel customer interactions
- Customer retention
Relationship development
Established consumer behavior constructs for a positive customer and firm outcomes.
Customer outcome
- Dis/satisfaction
- Loyalty - brand attitudes and repeat purchase
- WOM recommendation / advocacy
Firm outcome
CLV, sales/profit, customer retention
Satisfaction is …
- A post-purchase evaluation of a service offering, or judgment following a consumption experience.
- It focuses on a single event or cumulative experience.
- It is a process extending across the entire consumption experience.
Expectations exist at four levels
- General e.g. service standards in USA
- Category/product class e.g. package holidays
- Brand e.g. Club Med, Thompson, Crystal
- Transaction - e.g. two weeks in Italian Lakes
Disconfirmation theory assumes that …
Consumer (dis)satisfaction results from a positive or negative discrepancy between the performance and the expectations of a good or service.
Consumption emotions
Accounts for emotional dimensions of experience that feed into satisfaction judgments
The expectations can come from
company’s communication, external party review, etc.
Positive emotions (and ambivalence)
Contentment, Pleasure, Delight, Relief, Ambivalence (remarkable experience)
Negative emotions (and attribution)
- Blame provider: anger, disgust, contempt
- Blame circumstances: sadness, fear
- Blame self: shame, guilt
Purpose of customer satisfaction evaluation
- Overall satisfaction tracking in organizational performance, management, and staff rewards.
- Predict future customer behaviour, profitability, business growth.
- Identify service elements for investment
- Understand reasons for dis/satisfaction with service elements (across the customer journey)
2 tools to measure Satisfaction as a Marketing Performance Metric
Single-item scales and Multi-item scales
Single-item scales
Typically used as a general measure – cumulative or situation-specific. (ex: rate Skype call)
Weakness of single-item scales
- Inconsistent interpretation by consumer.
- Scores are typically skewed.
- Weak relationship with loyalty (only 50% of ppl rate as good will reuse product)
Strength of NPS
- Consistent interpretation by consumer.
- Strong relationship with loyalty and growth.
Multi-item scales
Cover dimensions of product/service and/or elements of the service process.
Three main types of Multi-item scales include
Satisfaction scales, Performance scales, Disconfirmation scales
Satisfaction scales …
(dissatisfied to satisfied)
measures satisfaction, but does not examine its antecedents
Performance scales …
(poor, fair, good, excellent)
is not synonymous with satisfaction. Neglects the role of expectations.
(Dis)confirmation scales
(worse than expected to better than expected)
- Compresses the expectations – performance measure => more concise
- Good predictor of satisfaction and loyalty
Semantic differential scales are …
(dirty - clean, warm - cold)
Measure attitude towards object or event by selecting an appropriate position on a scale between two bipolar adjectives.
Performance and expectation scales
is too long and detailed, so consumers get fed up
The Importance - Performance Matrix
evaluates service quality and customer satisfaction basrf on high importance and performed attributes.
Zones of Tolerance Chart
Service quality perceptions relative to zones of tolerance
The Consequences of Satisfaction and Dissatisfaction
- Continued patronage/Increased loyalty
- Twist (positive and negative ways in restructuring meanings, roles and objects in the marketplace / attitude change and; dissonance reduction)
- Voice (positive WOM or complaining)
- Exit
Customer satisfaction is contributed by ..
Expectations, Evaluations of performance and Consumption emotions.
How to decide which measure satisfaction?
- The intention to use the insight
- Based on good understanding of strength/limitation of each approach
Behavioural indicators
- frequency of purchase
- % of spend in product category
- probability of repeat patronage
- monetary value & profitability of purchases
- multiple aspects of purchase behaviour
- WOM recommendations
Attitudinal indicators (affective and cognitive aspects)
- brand preference
- brand credibility (expertise, trust, likability)
- brand commitment
Benefits of data-driven services marketing (Kumar et al., 2013)
improved fact-based decision making and further developed analytical capabilities
Three types of data (Kumar et al., 2013)
- Neurophysiological: eye tracking, electrocardiography, skin conductance response.
- Traditional: focus group, surveys, transactions, product review, experiments, unstructured/structured interviews, observations.
- Digital: search queries, clickstream, social media, blogs, community forums, incentivized referrals
Forward-looking metrics
Since old metrics assume the future customer purchasing behaviour is the same as past ones, there’s a need for forward-looking metrics.
Ex: CLV, expected churn rate, expected SoW, expected service failure, and recovery rate.
