Why Customer Satisfaction Efforts Fail

Detractors:

scores of 6 or below represent unhappy customers who may spread negative comments

Passives:

scores of 7 or 8 are associated with customers who are satisfied but may switch to competitors

Promoters:

scores of 9 or 10 are usually associated with loyal customers who will typically be repeat customers ("promoters")

Net Promoter Score (NPS)

-Developed by (and is a registered trademark of) Fred Reichheld, Bain & Company, and Satmetrix -"What is the likelihood that you would recommend us?" evaluated on a scale from 0 to 10. -NPS is the percentage of promoters minus the percentage of detractors.

Measuring Customer Loyalty

-Overall satisfaction -Likelihood of a first-time purchaser to repurchase -Likelihood to recommend -Likelihood to continue purchasing the same products or services -Likelihood to purchase different products or services -Likelihood to increase frequency of purchasing -Likelihood to switch to a different provider

Why Customer Satisfaction Efforts Fail

-Poor measurement schemes -Failure to identify appropriate quality dimensions -Failure to weight dimensions appropriately -Lack of comparison with leading competitors -Failure to measure potential and former customers -Confusing loyalty with satisfaction

Customer Perceived Value

measures how customers assess benefits—such as product performance, ease of use, or time savings—against costs, such as purchase price, installation cost or time, and so on, in making purchase decisions.