by Thomas O. Jones and W. Earl Sasser, Jr.Harvard Business Review (November-December 1995)

Marko Seikolamarko.seikola@tkk.fi

S-72.2530 Acceptability and Quality of Service4.12.2008

AgendaThe ArticleLevels of SatisfactionHow to Listen to Customers?The ResearchConclusion of the ResearchThoughts About the Article

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The ArticleHarvard Business PreviewNovember-December 1995

Still relevant after 13 yearsRelationship between customer satisfaction

and loyaltyPresents a research of five different business

areasNot fully applicable in Finland

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Levels of SatisfactionTrue long-term loyalty vs. false loyaltyScale 1 – 5Different satisfaction levels reflect different issues

Dissatisfied: problem with core productNeutral: probably happy with core product but

would like to get set of support services

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Response Description Loyalty

5 Completely satisfied

Very loyal

3 – 4 Satisfied Easily switched to a competitor

1 – 2 Dissatisfied Very disloyal

Listen to CustomersFeedback, inquiryMarket researchFrontline personnelStrategic activitiesCustomers with reasonably good product or

service quality doesn’t give negative feedback easilyThe reliability of customer research falls

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Listen to CustomersConsistent

Period-to-period changes has to be evaluatedBroadly appliedCapture information also on individual level

in order to tailor individual experiences

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Marketer’s Point of View

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High Margin

Medium Margin

Low Margin

Many customersAccountabl

eReactive

Basic or reactive

Medium number of customers

Proactive Accountable Reactive

Few customersPartnership Proactive

Accountable

Source: P. Kotler & K. Keller – Marketing Management 12e, page 157

The Research30 Different companies5 Different markets

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The Research – Local TelephoneMonopolies

Not applicable in Finland

RegulationsMobility

The article was issued 1995

No fixed phones No locality

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The Research – AirlinesVirtual monopolies

with routesService on these

routes affect on loyalty on other routes

Frequent-flier programs

PriceTime of departureReliability &

security4.12.2008 10

Marko Seikola - Why Satisfied Customers Defect

The Research – HospitalsVery different type

of healthcare in Finland and in USFinland: public

healthcareInsurer often

determines the hospital (US)

Location

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The Research – Personal ComputersComputers in

business useIntegrationHuge effort

needed in order to change system

How about home users? Any difference?

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The Research – AutomobilesHigh comptetitionHuge difference

between merely and completely satisfied

Expensive productBought very rarelyThe research

included cars with wide price range

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Conclusion of the ResearchPeople are hard to pleaseClearly: loyalty ~ satisfaction

Differs between marketsDifferent levels <=> different problemsComplete satisfaction

Difference between merely and completely satisfied customers is huge

Loyalty Long-term financial performance

Satisfaction affects more than managers assumeFocus on how to correct the biggest factors of

dissatisfaction

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Thoughts about the articleIs the question relevant to monopolies?End-to-end qualityThe research is not 100% applicable to

Finnish societyFixed phones losing the game to mobile phonesNo monopolies in local phonesPublic healthcare

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