November 01, 2013

What Customer Satisfaction Can Do, What it Cannot Do


Customer satisfaction is a subtle thing, no matter what the J.D. Power and other surveys suggest about customer-perceived differences between service providers and devices.

The problem is that “satisfaction” does not always translate directly into “loyalty.” In other words, happy customers often will leave a provider, while unhappy customers will stay.

That might seem counter intuitive, but in a market with lots of transparency, buyers might conclude that every supplier has some drawbacks, and every supplier has some advantages, while the actual differences between suppliers are slight enough that choices of suppliers hinge on subtle things.

That doesn’t mean differences are impossible to measure. Tablet owners who purchase their device online rate their purchase experience 8.5 (on a 10-point scale), compared with 8.3 among those who purchase at a store, and also provide a slightly higher satisfaction rating for the price of the tablet (7.8 vs. 7.5, respectively), according to J.D. Power.

What is harder to ascertain is the impact of such differences.

Overall satisfaction with mobile phones, for example, is lower than satisfaction with tablets. Among customers who text 30 or more times in a two-day period, device satisfaction ranks 725. Among users who text fewer than 10 times a day, satisfaction is 740 - on a 1,000-point scale.

Overall customer satisfaction with tablet devices is 821 (on a 1,000-point scale). Customer satisfaction among tablet owners who rate their purchase experience high (nine or 10) is 114 points higher (879) than those who rate their purchase experience lower (eight or below).

Do those differences account for any diminished usage of smart phones? The evidence suggests lower reported satisfaction does not, in fact, depress purchasing and use of smart phones.

Nor does lower satisfaction with service providers, compared to devices, depress usage. Some consumers prefer a particular provider. But all service provider rank relatively low, compared to providers of other products. Nevertheless, everybody buys service from a mobile service provider.

So even if higher customer satisfaction is generally preferable to lower satisfaction scores, and might shift some market share, even lowish satisfaction does not keep people from buying mobile service at high rates.

At the margin, satisfaction can shift market share. But for some products, including mobile and video entertainment, even some significant amount of dissatisfaction does not seem to cause product abandonment. Dissatisfaction does arguably shift market share.

Overall satisfaction among full-service customers who indicate having had a sales transaction with their mobile carrier is 795 on a 1,000-point scale. That is a 31-point increase from February 2013. Satisfaction also increased among non-contract customers (789), up 34 points in six months, J.D. Power reports.

Satisfaction increased in all six factors in the full-service customer segment, with cost of service improving 47 points from the last reporting period. The perception of pricing fairness seems to have driven that big jump in satisfaction.

Aggressive handset pricing and promotions seem to be at the heart of those perception changes. But streamlined in-store processes likely are a factor as well.

"There's a direct correlation between an efficient sales transaction process and improving satisfaction with the overall purchase experience," said Kirk Parsons, senior director of the telecom services practice at J.D. Power.

Samsung ranks highest in tablet satisfaction with a score of 835 and is the only manufacturer to improve across all five factors since the previous reporting period in April 2013.

Samsung showed particularly strong improvement in the cost factor (25-point increase). Apple ranks second scoring 833 and performs particularly well in performance and ease of operation.

Satisfaction scores do matter, when they shift customer preferences from one supplier to another. But even low satisfaction scores for a class of products (air travel, mobile service, phone service, TV service, Internet access service) seem to be affected negatively, in aggregate.

 




Edited by Stefania Viscusi



Related Tags

Wireless    Apple    Tablet
       

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