Tài liệu measuring customer satisfaction in the context ppt

measuring customer satisfaction in the
context






“Measuring customer satisfaction in the context of a project-based organization”

Tuomas J. Ahola, Helsinki University of Technology


Jaakko Kujala, Helsinki University of Technology






ABSTRACT

There is a lack of research that focuses on the suitability of the concept of customer satisfaction
and the current methods used for measuring it in organizations operating in business-to-business
(B2B) markets, such as project-based organizations (PBO), which typically provide customized
product and service offerings to a rather limited customer base. In this theoretical paper, we
discuss how certain characteristics of PBOs should be taken into consideration when measuring
customer satisfaction. In addition, we discuss the suitability of different customer satisfaction
measurement (CSM) methods for PBOs. We argue that PBOs can expect to benefit from survey-
based CSM methods. However, survey-based methods do not often suffice alone and standard
instruments should not be directly transferred from a B2C context to a B2B context. In addition,
we argue that the match between the selected CSM methods and the salient features of the PBO
in question should always be considered.

KEYWORDS: customer satisfaction, methods, project-based organization, project management

Introduction

Up-to-date information about customer satisfaction is important for successful management of
complex projects. The importance of customer satisfaction is emphasized in the case of project-
based organizations, where a customer often plays an integral role in the project delivery process.
Turner and Keegan (2001, p. 256) elegantly define project-based organization as an organization
in which:
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“the majority of products made or services supplied are against bespoke designs for customers”

According to Kerzner (1995) the client organization can have a great deal of influence on project
success. Information about sources customer satisfaction or dissatisfaction can be used to ensure
that both project product and the delivery process meet customer expectations.

The concept of customer satisfaction, how it should be measured, and its implications for an

organization have been studied extensively in the context of traditional product-oriented
industries such as consumer goods and in the context of mass-produced services such as hotel
services or air travel services. Numerous studies and publications have almost unanimously
concluded that measuring customer satisfaction can lead to several benefits for the organization
applying it:

• CSM results can be used to discover important strengths and weaknesses in
product/service offerings and more effectively focus improvement efforts towards these
issues (Lin & Jones, 1997; Emerson & Grimm, 1999; Sharma et al. 1999; Yang, 2003a;
Lam et al., 2004).
• Depending on the industry context, CSM results may be used to estimate the degree of
customer loyalty which is vital for long-term revenues (Gronholdt et. al, 2000; Lam et al.,
2004).
• CSM enables the supplying organization to compare the performance of its different
business units in different time periods and locations (Jones & Sasser, 1995).
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• CSM is useful for assessing the effectiveness of efforts to redesign elements of the service
delivery system (Chase & Bowen, 1991; Juran & Gryna, 1988).
• Customer satisfaction can be used as a basis for customer segmentation
(Athanassopoulos, 2000).
• According to McColl-Kennedy and Schneider (2000), measuring customer satisfaction is
not a neutral act, but an intervention. The opinions of the customer whose satisfaction is
measured can be affected by the measurement process
• CSM can be used by the supplier as a symbolic activity for demonstrating customer-
oriented behaviour (Kujala & Ahola, 2004).

Striving for high customer satisfaction can be considered important, since increased customer
satisfaction has been linked to customer behaviour that positively affects business results (e.g.
Kotler, 1994; Rust & Oliver, 1994; Vavra, 1997; Lam et al., 2004).

We did not find any academic papers focusing on CSM in a project-based B2B context and only
a rather limited number of papers that focused on CSM in a general B2B context. We presume
that in practice, many project-based organizations among other organizations operating in B2B
markets are measuring customer satisfaction with methods developed for B2C market contexts
without clearly understanding that several of the underlying assumptions inherent in these
methods are not valid in a B2B context (Rossomme, 2003; Kujala & Ahola, 2004). According to
Piercy (1996), this may lead to considering CSM as a superficial and unnecessary activity which
is likely to limit the utilization of the CSM results.

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The research focus in this paper is to point out the key differences between traditional, product or
service offering B2C organizations and project-based B2B organizations that are relevant for
implementing CSM practices. In accordance with Kujala & Ahola (2004) we define customer
satisfaction measurement system to include entire process consisting of:

• Gathering information concerning customer satisfaction
• Assessing the validity and reliability of this information
• Using this information in decision-making processes

This wider definition emphasizes the use of information. Loomis (1999) has demonstrated that
there are significant challenges related to the use of customer satisfaction information in
organizational decision making processes.

This paper is structured as follows. We first discuss the factors that differentiate organizations
operating in B2C markets from project-based organizations operating in B2B markets and that
are relevant for measuring customer satisfaction. Secondly, we review three different methods for
measuring customer satisfaction. Thirdly, we present hypotheses that allow assessing the
suitability of these different methods for project-based organizations. Finally, in the concluding
section, we discuss the implications of our paper for project-based organizations and propose
avenues for further research.

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Differences between B2C and project-based B2B organizations that
affect measuring customer satisfaction

In a B2C context the customer can often be clearly defined. The customer is in most cases an
individual person that purchases a specific product or a service for a specific price. For a project-
based B2B organization this is typically not the case. It is other organizations that buy projects
from the supplying organization, but individual persons within these organizations that make the
actual buying decisions. This makes defining the customer difficult. Should it be the entire
purchasing organization, or one or several individuals within this organization? Clearly, this
question has great implications towards measuring the satisfaction of the customer.

One should also consider how the concept of satisfaction is defined. Oliver (1997) defines
satisfaction as “pleasurable fulfillment”. He further links this fulfillment to an act of consumption
by the consumer. Oliver’s, like most existing definitions of satisfaction, view satisfaction as a
function of what is expected and what is experienced by the customer. But as stated earlier, the
customer is not clearly defined in a B2B context. It is important to differentiate whether CSM is
focusing on the satisfaction of the customer organization as a whole or the satisfaction of certain
individuals within that organization. These are clearly two different issues, since in the context of
a project delivery, there are several individuals involved from both the buyer and seller sides.
Another issue is the experience of consumption linked to most definitions of satisfaction. In a
B2B project delivery, not all individuals from the purchasing organization that are involved in the
project participate directly to the consumption, or use of the delivered project.

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It is rather straightforward to reason that in a project-based B2B context, to ensure the
continuation of a business relationship, the supplier needs to keep several individuals from the
customer’s side satisfied. However, it is also typically the case that certain individuals from the
purchasing organization have more influencing power in project purchase decisions

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, and thus
their satisfaction matters more that the satisfaction of those individuals who do not possess such
power (Silk & Kawani, 1982). Therefore, it can be argued that the aggregate satisfaction of the
buying organization is a rather complex function of satisfactions of individual, from an
importance viewpoint, non-equal persons within that organization. To contrast this to a B2C
context, there it is often enough if the satisfaction of one individual can be ensured to keep the
business relationship alive.

Several researchers argue that in a B2B context, measuring the satisfaction of one key informant
suffices (e.g., Pennings, 1979; Phillips, 1981; Conant et al., 1990). It can be argued that in a
project-delivery context, a relying on the satisfaction of single key informant does not produce
accurate results since, different individuals within the customer organization have differing
power to affect decision-making (Silk & Kawani, 1982) and differing satisfaction elements
(Rossomme, 2003), i.e. elements that affect the level of satisfaction, and one can argue that a
single key informant is unlikely to represent the aggregate satisfaction of the entire organization,
and even if such person did exist, it would often be very difficult for the supplying organization
to identify this person. This would require some kind of method or “influence screen”


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This importance and power of different individuals to affect project purchase decisions can also be considered from
another viewpoint. For example, several authors refer to gatekeepers, persons who have a great amount of power to
control the information that crosses organizational boundaries. Clearly these individuals, even if they do not make
the project purchase decisions, have significant power to affect them.
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(Rossomme, 2003) specifically designed at identifying the key informant, whose satisfaction
should then be measured. Clearly, in traditional B2C CSM, no such processes are required.

The importance of a customer account typically differs significantly between B2C and project-

based B2B organizations. Project-based organizations often have a very limited amount of
customers and are very dependent of each of these customer accounts, when in B2C context the
customer base is often large and the dependence on one account is low. This has implications for
measuring the satisfaction of these accounts, and it can be argued, that it can be worthwhile to
invest more resources in measuring the satisfaction of one customer account, when the customer
base is small, since if the results of the measurement activity are not correct, the financial
implications for losing a customer are significantly higher. This issue has direct implications
towards whether or not customer satisfaction should be measured by different methods in B2B
and B2C contexts. This question is answered in the later sections of this paper.

Another key difference between a B2C product or service provider and a B2B project-based
organization is the nature of the organization’s offering. In a B2C context, the offering is
typically either a product or service and thus the CSM typically focuses on measuring the
customers satisfaction towards some elements (or attributes) of this offering. Which attributes
should be measured and how each attribute’s relative importance should be calculated is under
continuous scientific debate. In the context of B2B project deliveries, the offering often contains
a complex product (or hardware) component, and a service component including all the
interpersonal interactions related to conducting business between two organizations. The complex
technical nature of project product, which is intended for generating revenues for customer over
long period of time, makes it difficult for the customer to give an informed opinion how satisfied
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he is to specific product features. When comparing B2B project-deliveries to B2C product or
service offerings, it is in the former case even less clear, which attributes should be measured and
which of these two attribute-laden components (hardware and service) is more important towards
the aggregate satisfaction of the customer.

According to Granovetter (1985), embeddedness, or social bonding has great implications for
economic activity. Individual persons do not make purchase decisions solely by technical
reasoning, but interpersonal social ties significantly affect these decisions. Interpersonal social
ties and trust play a greater role in interorganizational economic exchange than they do in B2C

commerce, since B2B exchanges tend to involve significant amounts of money, risk, and persons.
According to (Crosby et al., 1990), interpersonal relationships may be strengthened by
investments to social resources such as respect, concern and advice, and according to Bolton et
al. (2003) social bonds may even be stronger than structural bonds in an interorganizational
business relationship. Social bonding between individuals is linked to past experiences between
them, and one component of these experiences is the satisfaction towards the behaviour of the
other person. Following this line of reasoning, one can argue that in B2B commerce, customer
satisfaction is affected significantly by factors that are not directly linked to the product or service
component of the offering, but to how persons from two different organizations get along. These
social bonds play a very crucial role in project-based business, since the definition of the project
is often influenced via negotiations (Cova et al., 2002). If the chemistry is not there, for example,
because of weak social bond resulting from breach of trust in a previous project, the seller will
probably find himself in a disadvantageous position.

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One of the specific features of project business is frequent interaction and joint construction of
project product with supplier and customer during the project delivery process (Gordon et al.,
1993). Customer satisfaction is not influenced only by product and service quality, but how they
perceive the quality of project delivery process. This feature further increases the importance of
maintaining high level customer satisfaction, because satisfied customer is more willing to co-
operate and accept compromises leading to flexible delivery process (Kujala & Ahola, 2004).

Measuring customer satisfaction

In this section, we first discuss three different methods for measuring customer satisfaction, the
customer satisfaction survey, two incident-based techniques (critical incident technique and
sequential incident technique), and measuring customer satisfaction by interviews. Additionally,
we briefly discuss the use of indirect measures of customer satisfaction, such are repurchase
intentions, customer retention and profit. The purpose of this section is to point out the key
differences between these methods. Our review of these methods is primarily based on literature

covering the topics of CSM, and service quality measurement. Service quality is distinct from
customer satisfaction but the two concepts overlap considerably and their boundary can be argued
to be somewhat blurred (Robinson, 1999).

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Customer satisfaction survey

Most academic studies and papers clearly consider CSM as an activity that is based on
standardized questionnaires that are delivered to a sample of the customer base. These
quantitative multi-attribute questionnaires are then analyzed via statistical techniques. To ensure
the reliability and generalizability of these results, the sample size needs to be considerable,
normally in excess of 50 customers per surveyed segment. Surveys are used to assess the
satisfaction of customers towards physical products and intangible services and in addition to the
traditional B2C context, they are also utilized in a B2B context (Bearden et al, 1993; Kujala &
Ahola, 2004). Most academic papers have aimed at contributing to extant knowledge by defining
the various attributes of the product or service offering to measure (e.g. Parasuraman et al., 1985;
Bolton & Drew, 1991; Bitner et al., 1990), how they should be measured e.g. should you measure
the customer’s perception of the offering (Cronin & Taylor, 1992 & 1994) or the difference
between customers expectations and experiences (Parasuraman et al., 1985 & 1988 & 1991), and
to how the relative importance of these attributes should be calculated (e.g. Green & Tull, 1975).

Customer satisfaction surveys usually fulfil three organizational needs:

• They enable the organization to compare the performance of its different business units in
different time periods and locations (Jones & Sasser, 1995).
• They can produce rich information for generating continuous quality improvement
activities, when they are examined carefully and used within a consistent framework (Lin
& Jones, 1997).
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• They are useful for assessing the effectiveness of efforts to redesign elements of the

service delivery system (Chase & Bowen, 1991; Juran & Gryna, 1988).

There are, however, some inherent problems regarding to survey-based CS measurement. Firstly,
the amount of attributes in a survey is always limited, i.e. a survey cannot contain all possible
attributes affecting customer satisfaction, because this would make the questionnaire very long,
severely limiting the amount of customers willing to complete it. Secondly, customers have to
aggregate their product or service consumption experiences in a potentially problematic way. For
example, when rating “the friendliness of staff”, a customer has to aggregate her answer is she
has encountered friendly and less friendly staff. Thirdly, the operationalization of the satisfaction
attributes is problematic, since customers always interpret the questions contained in the survey
in more or less different ways. This decreases the reliability of the results.

Two major streams of research have emerged around how customer satisfaction should be
measured. The “gap analysis” approach examines differences between customer expectations and
the performance of the organization’s offerings (see e.g. Parasuraman et al., 1985 & 1988 &
1991). Another stream of research is the performance-based approach (or linear regression
approach) (see e.g. Cronin & Taylor, 1992 & 1994), where only the customers’ perceptions about
the performance of the company’s products and services are assessed. Overall satisfaction is then
assessed on the performance scores of various attributes. Both of these methods have their
strengths and weaknesses, which are discussed in detail in Danaher (1997). Some common
problems related to customer satisfaction surveys is their tendency to show a high level of
satisfaction, a lack of standard satisfaction scales and the proliferation and excessive use of
surveys (Altany, 1993; Mehta, 1990). Additional problems mentioned are haphazard sampling
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procedures, the quality of survey data and instruments, non-response problems and problems
relating to reporting and interpretation of the results of the survey (Lin & Jones, 1997).

Standardized survey-based CS measurement can be argued to be based on a positivistic view of
reality. Customer satisfaction as a whole can be understood and measured when the product or
service offering is divided into several measurable attributes. These attributes then

mathematically relate to overall satisfaction.

Standardized and customized surveys

When implementing survey-based satisfaction measurement, the supplier can either utilize a
standardized and tested scale, such as SERVQUAL (Parasuraman et al., 1988 & 1991), modify a
standardized scale to better suit its business context, or develop the entire scale in-house.
Standardized scales have usually been rigorously tested for the validity and reliability of results.
However, because they are often developed to be used by different organizations operating in
different contexts, some measures involve clear compromises and do not optimally fit the
operating context of an individual organization. Customized surveys developed in-house by the
supplier have the advantage that the measures are developed with managerial knowledge and
expertise of the specific business context (Jeffries & Sells, 2000). However, their validity and
reliability is hard to verify. In addition, the results obtained with the use of customized surveys
cannot be compared with results obtained with standardized scales. This can make benchmarking
of CS difficult or impossible between organizations and if the supplier uses different customized
surveys for each of its sub-business units, comparison of CS may not even be possible between
them.
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Critical incident technique (CIT) and sequential incident technique (SIT)

As a method for assessing customer satisfaction CIT (and SIT) allows the detailed description of
problematic customer incidents as the customers perceive them (Flanagan, 1954). CIT also
allows the categorization of the critical incidents into homogenous groups, and thus makes
limited generalization of the results possible. The underlying assumption behind critical incident
technique (CIT) is that customer satisfaction is strongly affected by very positive or negative
experiences in the product/service delivery and consumption processes. These two techniques
have been used primarily in the B2C service context (Bitner et al, 1990), but have also been
successfully applied in B2B contexts (Lockshin & McDougall, 1998; Franco et al., 2004). By

systematically documenting critical incidents, the supplier organization can gather valuable
information regarding to the events that have very significantly affected the satisfaction of its
customers. Sequential incident technique (SIT) is very similar, but it also records usual events
that do not affect customer satisfaction in the same degree than critical incidents do. Both
techniques use qualitative interviews to collect customer incidents. Collected data is then sorted
into groups containing similar incidents.

The main strengths of CIT and SIT are as follows:

• They have the ability to record incidents, which significantly affect customer satisfaction
in a manner that is very natural to the customers (Flanagan, 1954; Nyquist & Booms,
1987).
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