Saturday, December 29, 2012

Customer Experiences are Relative

Dr. Howard Lax wrote a blog on November 7, 2012 which he titled Customer Experiences and the Theory of Relativity.  The key point of his article is that we evaluate the world through the lens of comparisons. He makes an excellent point when he states that whatever the experience may be, our recall, reflection, and/or evaluation of the experience always is relative to some frame of reference.

These statements by Dr.Lax are consistent with the the preferred definition used by the Customer Institute which says: "customer satisfaction occurs when the perception of the reward from the purchase of goods or services by the customer meets or exceeds his or her perceived sacrifice. The perception is a consequence of matching past purchase and consumption experience with the current purchase."

There are simpler definitions of customer satisfaction, which are often used but which do not have the value derived from the definition above. Four other definitions that are often used are:
1. Customer satisfaction is equivalent to making sure that the product and service performance meets customer expectations.
2. Customer satisfaction is a perception of the customer that the outcome of business transaction is equal to or greater than his or her expectation.
3. Customer satisfaction occurs when the acquisition of products and/or services provides a minimum negative departure from expectations when compared with other acquisitions.
4. Customer satisfaction occurs when the marginal utility of a transaction is equal to or greater than preceding acquisitions.

There are several observations that follow from the Customer Institute definition; namely,
1. The comparison between past purchase and consumption experience must make sense. it is difficult to compare the purchase of the computer with the purchase of a wristwatch. Often we do not have a realistic context or frame of reference  for making a comparison, so there may be occasions when the customer will actually compare  "apples to oranges".  That's just the way we are.
2. When thinking about customer experiences, it must be remembered that there are no absolutes.
3. When evaluating customer perceptions, especially in customer surveys, it is critically important to establish measurement scales that accurately describe them.

The bottom line is to remember that customer satisfaction and customer loyalty measurements are all relative. There is no absolute scale for satisfaction, nor is there an absolute scale for customer loyalty. Surveys of customers and measurements taken from those surveys will always reflect the customers perception relative to their past purchase experiences. It is not unreasonable to conclude that much of the variability in customer's. responses to survey questions is often times due to these experiences.


1 comment:

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