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How to Measure Customer Satisfaction: Satisfaction

Measurement and Theory
May 9th, 2007

By Scott M. Smith Ph.D.

Measuring satisfaction and building a satisfaction survey requires at least a basic knowledge of the
satisfaction measurement literature, combined with your own customer satisfaction experiences. This
brief tutorial provides such an introduction to the theoretical and methodological underpinnings of
satisfaction research.

Customer satisfaction is the most common of all marketing surveys and is part of the "big three"
research studies in marketing that include market segmentation and concept testing.

What Is Customer Satisfaction?

Customer satisfaction measures how well a company's products or services meet or exceed customer
expectations. These expectations often reflect many aspects of the company's business activities
including the actual product, service, company, and how the company operates in the global
environment. Customer satisfaction measures are an overall psychological evaluation that is based on
the customer's lifetime of product and service experience. "

Why is Customer Satisfaction So Important?

Effective marketing focuses on two activities: retaining existing customers and adding new
customers. Customer satisfaction measures are critical to any product or service company because
customer satisfaction is a strong predictor of customer retention, customer loyalty and product
repurchase.

Satisfaction Measurement: Overall Measures of Satisfaction

Satisfaction measures involve three psychological elements for evaluation of the product or service
experience: cognitive (thinking/evaluation), affective (emotional-feeling/like-dislike) and behavioral
(current/future actions).

Customer satisfaction usually leads to customer loyalty and product repurchase. But measuring
satisfaction is not the same as measuring loyalty. Satisfaction measurement questions typically
include items like:

1. An overall satisfaction measure (emotional):

Overall, how satisfied are you with "Yoni fresh yogurt"?

Satisfaction is a result of a product related experience and this question reflects the overall
opinion of a consumer's experience with the product's performance. Note that it is meaningful
to measure attitudes towards a product that a consumer has never used, but not satisfaction for a
product or brand that has never been used.

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2. A loyalty measure (affective, behavioral):

Would you recommend "Yoni" to your family and friends?

3. A series of attribute satisfaction measures (affective and cognitive):

How satisfied are you with the "taste" of Yoni fresh yogurt?
How important is "taste" to you in selecting Yoni fresh yogurt?

Satisfaction and attitude are closely related concepts. The psychological concepts of attitude
and satisfaction may both be defined as the evaluation of an object and the individual's
relationship to it. The distinction is that satisfaction is a "post experience" evaluation of the
satisfaction produced by the product's quality or value.

4. Intentions to repurchase (behavioral measures):

Do you intend to repurchase Yoni fresh yogurt?

Satisfaction can influence post-purchase/post-experience actions other than usage (such as word
of mouth communications and repeat purchase behavior). Additional post-experience actions
might include product or information search activity, changes in shopping behavior and trial of
associated products.

As shown in Figure 1, customer satisfaction is influenced by perceived quality of product and service
attributes, features and benefits, and is moderated by customer expectations regarding the product or
service. Each of these constructs that influence customer satisfaction need to be defined by the
researcher.

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Satisfaction Measurement: Affective Measures of Customer Satisfaction

A consumer's attitude (liking/disliking) towards a product can result from any product information or
experience whether perceived or real. Again, it is meaningful to measure attitudes towards a product
or service that a consumer has never used, but not satisfaction.

Satisfaction Measurement: Cognitive Measures of Customer Satisfaction

A cognitive element is defined as an appraisal or conclusion that the product was useful (or not
useful), fit the situation (or did not fit), exceeded the requirements of the problem/situation (or did not
exceed). Cognitive responses are specific to the situation for which the product was purchased and
specific to the consumer's intended use of the product, regardless if that use is correct or incorrect.

Satisfaction Measurement: Behavioral Measures of Customer Satisfaction

It is sometimes believed that dissatisfaction is synonymous with regret or disappointment while
satisfaction is linked to ideas such as, "it was a good choice" or "I am glad that I bought it." When
phrased in behavioral response terms, consumers indicate that "purchasing this product would be a
good choice" or "I would be glad to purchase this product." Often, behavioral measures reflect the
consumer's experience individuals associated with the product (i.e. customer service representatives)
and the intention to repeat that experience.

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Satisfaction Measurement: Expectations Measures

Many different approaches to measuring satisfaction exist in the consumer behavior literature.
Leonard Berry in 2002 expanded previous research to refine ten dimensions of satisfaction, including:
Quality, Value, Timeliness, Efficiency, Ease of Access, Environment, Inter-departmental Teamwork,
Front line Service Behaviors, Commitment to the Customer and Innovation. Berry's dimensions are
often used to develop an evaluative set of satisfaction measurement questions that focus on each of
the dimensions of customer satisfaction in a service environment.

A diagnostic approach to satisfaction measurement is to examine the gap between the customer's
expectation of performance and their perceived experience of performance. This "satisfaction gap"
involves measuring both perception of performance and expectation of performance along specific
product or service attributes dimensions.

Customer satisfaction is largely a reflection of the expectations and experiences that the customer has
with a product or service. However expectations also reflect that influences the evaluation of the
product or service. When we make major purchases, we research the product or service and gain
information from the advertising, salespersons, and word-of-mouth from friends and associates. This
information influences our expectations and ability to evaluate quality, value, and the ability of the
product or service to meet our needs.

Types of Customer Expectations that Influence Satisfaction

Customer performance expectations for attributes, features and benefits of products and services may
be identified as both explicit and implicit expectation questions.

Explicit expectations are mental targets for product performance, such as well identified
performance standards. For example, if expectations for a color printer were for 11 pages per minute
and high quality color printing, but the product actually delivered 3 pages per minute and good quality
color printing, then the cognitive evaluation comparing product performance and expectations would
be 11 PPM — 3 PPM + High — Good, with each item weighted by their associated importance.

Implicit expectations represent the norms of performance that reflect accepted standards established
by business in general, other companies, industries, and even cultures.

Static performance expectations address how performance and quality for a specific application are
defined. Each system's performance measures are unique, though general expectations relate to
quality of outcome and may include those researched by Berry, or others such as: accessibility,
customization, dependability, timeliness, and accuracy, tangible cues which augment the application,
options, cutting edge technology, flexibility, and user friendly interfaces. Static performance
expectations are the visible part of the iceberg; they are the performance we see and — often
erroneously — assume are all that exist.

Dynamic performance expectations are about how the product or service evolves over time and
includes the changes in support and product or service enhancement needed to meet future business or
use environments. Dynamic performance expectations may help to "static" performance expectations
as new uses, integrations, or system requirements develop.

Technological expectations focus on the evolving state of the product category. For example, mobile
phones are continually evolving. Mobile service providers, in an effort to deal with the desire to
switch to new technology phones, market rate plans with high cancellation penalties. The availability

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of low profile phones with email, camera, MP3, email, and blue tooth technology changes technology
expectations as well as the static and dynamic performance expectations of the product. These highly
involving products enhance perceptions of status, ego, self-image, and can even invoke fear when the
product is not available.

Interpersonal expectations involve the relationship between the customer and the product or service
provider. Person to person relationships are increasingly important, especially where products require
support for proper use and functioning. Expectations for interpersonal support include technical
knowledge and ability to solve the problem, ability to communicate, time to problem resolution,
courtesy, patience, enthusiasm, helpfulness, understood my situation and problem, communication
skills, and customer perceptions regarding professionalism of conduct, often including image,
appearance.

For each of these types of expectations that when fulfilled result in customer satisfaction (or when not
delivered, result in dissatisfaction and complaining behavior), the perceived quality and value are
critical and directly influence intention to repurchase and loyalty.

Satisfaction Measurement: Perceived Quality Measures

Perceived quality is often measured through three measures: overall quality, perceived reliability, and
the extent to which a product or service meets the customer's needs. Customer perceptions of quality
are the single greatest predictor of customer satisfaction.

Satisfaction Measurement: Perceived Value Measures

Perceived value may conceptually refer to the overall price divided by quality or the overall quality
divided by price. Perceived value is measured in many ways including overall evaluation of value,
expectations of price that would be paid, and more rigorous methodologies including the Van
Westendorp pricing analysis, and conjoint analysis (other Qualtrics white papers and tutorials are
available on these topics).

The consumer behavior literature shows that price is a primary indicator of quality when other
attributes and benefits are relatively unknown. However when repeat purchases are made in some
product categories, price may be reduced in importance.

Satisfaction Measurement: Customer Loyalty Measures

Customer loyalty reflects the likelihood of repurchasing products or services. Customer satisfaction is
a major predictor of repurchase, but is strongly influenced by explicit performance evaluations of
product performance, quality, and value.

Models of Expectations and Customer Satisfaction

Expectations are beliefs (likelihood or probability) that a product or service (with certain attributes,
features or characteristics) will produce certain outcomes (benefits-values). These expectations are
based on previous affective, cognitive and behavioral experiences. Expectations are seen as related to
satisfaction and can be measured in the following ways:

1. Importance-Value of the product/service fulfilling the expectation;

2. Overall Affect-Satisfaction Expectations: The (liking/disliking) of the product/service;

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3. Fulfillment of Expectations: the expected level of performance vs. the desired expectations.
This is "Predictive Fulfillment" and is a respondent specific index of the performance level
necessary to satisfy.
4. Expected Value from Use: Satisfaction is often determined by the frequency of use. If a
product/service is not used as often as expected, the result may not be as satisfying as
anticipated. For example a Harley Davidson motorcycle that sits in the garage, an unused year
subscription to the local fitness center/gym or a little used season pass to the local ski resort or
amusement park may produce more dissatisfaction with the decision to purchase than with the
actual product/service.

Expectancy Value Measures of Behavioral Intention (BI), Attitude (A) and

Satisfaction (SAT)
Expectancy value models have been found to perform well in predicting both
satisfaction/dissatisfaction and behavioral intention (intention to try, purchase, recommend, or re-
purchase a product or service).

The Expectancy value model using attitudes and beliefs reads:

where:

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• w1, w2 = weights that indicate the relative influence of the overall attitude toward the object and
the normative influence to purchase the product
• Ao = Attitude toward the object (brand, product, service or company)
• = the overall attitude toward the object. The overall attitude is formed by the
multiplicative product of ai (the person's affective evaluation of attribute i), and bi (here defined
as the importance of attribute i in the purchase decision). The sum is taken over the k attributes
that are defined as salient in the purchase decision.
• = The overall normative component of the decision process. This is computed as
the multiplicative product of nbi (the norms governing attitude i), and mci (the motivation of the
respondent to comply with those norms).

Behavioral Intention (BI)

Behavioral intention is measured using a question such as "Indicate the likelihood of you buying
sometime during the next year" with a five or seven-point Likert or semantic differential scale labeled
"definitely will purchase" and "definitely will not purchase" at the endpoints.

Satisfaction
Overall satisfaction or dissatisfaction with an object is often measured using a five-point satisfaction
scale. As an example, "Overall, how satisfied are you with Sparkle toothpaste?" could be measured
with a "Very Satisfied, Somewhat Satisfied, Neither Satisfied Nor Dissatisfied, Somewhat
Dissatisfied, Very Dissatisfied" scale. More examples are provided below.

The like-dislike measure is used as an overall measure of respondent satisfaction with a product or
service (after purchase). Satisfaction leads to favorable feelings and dissatisfaction leads to
unfavorable feelings.

The evaluative dimension may be measured in terms of like-dislike, favorable-unfavorable; approve-

disapprove; good-bad; and delight-failure scales.

Attitude (ai*bi)
bi - the probability that attribute i is associated with performing behavior B. The concept "Crest
toothpaste prevents decay" could be rated on a seven point scale with endpoints labeled "Very Likely"
and "Very Unlikely".

ai - the evaluation of belief i. A representative measure of ai would be "In terms of buying Crest
toothpaste, decay prevention is …" with a five or seven point scale with "good" and "bad"; or
"Excellent" and "Poor" at the endpoints.

In building a customer satisfaction survey, it is also helpful to consider reasons why pre-purchase
expectations or post-purchase satisfaction may or may not be fulfilled or even measurable.

1. Expectations may not reflect unanticipated service attributes;

2. Expectations may be quite vague, creating wide latitudes of acceptability in performance and
expected satisfaction;
3. Expectation and product performance evaluations may be sensory and not cognitive, as in taste,
style or image;
4. The product use may attract so little attention as to produce no conscious affect or cognition
(evaluation), and result in meaningless satisfaction or dissatisfaction measures;
5. There may have been unanticipated benefits or consequences of purchasing or using the product
(such as a use or feature not anticipated with purchase);
6. The original expectations may have been unrealistically high or low;

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7. The product purchaser, influencer and user may have been different individuals, each having
different expectations.

When to Conduct Customer Satisfaction Surveys

The best timing for measuring customer satisfaction and building customer satisfaction surveys
depends on the kind of product or service provided, the kinds of customers served, how many
customers are served, the longevity and frequency of customer/supplier interactions, and what you
intend to do with the results.

Three very different approaches both produce meaningful and useful findings:

• Post Purchase Evaluation — Satisfaction feedback is obtained from the individual customer at
the time of product or service delivery (or shortly afterwards). This type of satisfaction survey
is typically used as part of a CRM (Customer Relationship Management System) and focuses
on having a long term relationship with the individual customer
• Periodic Satisfaction Surveys — Satisfaction feedback from groups of customers at periodic
intervals to provide an occasional snapshot of customer experiences and expectations.
• Continuous Satisfaction Tracking — Satisfaction feedback is obtained from the individual
customer at the time of product or service delivery (or shortly afterwards). Satisfaction tracking
surveys are often part of a management initiative to assure quality is at high levels over time.

Satisfaction surveys are developed to provide an understanding of customers' expectations and

satisfaction. Satisfaction surveys typically require multiple questions that address different
dimensions of the satisfaction concept. Satisfaction measurement includes measures of overall
satisfaction, satisfaction with individual product and service attributes, and satisfaction with the
benefits of purchase. Satisfaction measurement is like peeling away layers of an onion-each layer
reveals yet another deeper layer, closer to the core.

All three methods of conducting satisfaction surveys are helpful methods to obtain customer feedback
for assessing overall accomplishments, degree of success, and areas for improvement.

Building a Customer Satisfaction Survey

Customer satisfaction surveys often include multiple measures of satisfaction, including:

• Overall measures of customer satisfaction

• Affective measures of customer satisfaction
• Cognitive measures of customer satisfaction
• Behavioral measures of customer satisfaction
• Expectancy value measures of customer satisfaction

General Measures that are part of a customer satisfaction analysis usually involve product fulfillment
and will often include product use scenarios where and how is the product used?

Common Ingredients of a Customer Satisfaction Survey

Product Use

• Frequency of product use

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• Primary use location

• Primary precipitating events or situations for product use or need
• Usage rates and trends

Product Familiarity

• Degree of actual product use familiarity

• Knowledge (read product information, read product label, etc.)
• Knowledge and Involvement with product and the purchase process
• Awareness of other brands
• Reasons for original product purchase (selection reasons)
• Primary benefits sought from the product

Product Evaluation

• Attribute evaluation matrix: (quality, price, trust, importance, performance, value)

• Perceived benefit associations matrix
• Importance, performance
• Identification of primary benefits sought
• Comparison to other brands (better, worse)
• What is the best thing about the brand, what could be done better

Message and Package Evaluation

• Packaging size, design

• Advertising Promise, message fulfillment evaluation

Value Analysis

• Expectation of price
• Expectation of relative price (full price, on sale)
• Current price paid

Satisfaction Measurements

• Overall Satisfaction
• Reasons for Satisfaction Evaluation
• Satisfaction with attributes, features, benefits
• Satisfaction with use
• Expected and Ideal Satisfaction-Performance Measures
• Likelihood of recommending
• Likelihood of repurchasing

Sample Satisfaction Measures from the Qualtrics Question Library:

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Scott Smith is the founder of Qualtrics.com. He is the James Passey Professor of Marketing and Director of the Institute of
Marketing at Brigham Young University. He received his Ph.D. in Marketing and Quantitative Methods from Pennsylvania
State University.

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