TOPIC: CUSTOMER SATISFACTION

SAMUEL MENSAH – ANSAH

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The hospitality and tourism industry is one of the fastest growing industries that provide the necessary and desirable goods and services to people worldwide. Sriyam (2010) points out that guest satisfaction in the hospitality and tourism industry is the highest priority for owners and managers competing with hundreds of others, because personal services are at the top of the guests list of the most important things when considering a destination to visit.

APPLICATION OF CUSTOMER SATISFACTION IN THE HOSPITALITY AND TOURISM INDUSTRY.

. Satisfaction is derived from the Latin word “satis” (enough) and “facere” (to do or make). Thus, the satisfaction of products and services has the capacity to provide what is being sought to the point of being "enough." Two related words are satiation, which loosely means enough, up to the point of excess, and satiety, which can mean a surfeit or too much of enough, as if to say that too much is necessarily undesirable.

There are several theories which explain satisfaction including: expectancy disconfirmation, assimilation or cognitive dissonance, contrast, assimilation contrast, equity, attribution, comparison-level, generalized negativity and value precept; (Pizam & Ellis, 1999).

PRINCIPLE OF THE CONCEPT (E.G. DEFINITION, HOW IT WORKS):

“Customer satisfaction is a psychological concept that involves the feeling of well-being and pleasure that results from obtaining what one hopes for and expects from an appealing product and or service” (Pizam & Ellis, 1999 cites WTO, 1985). In majority of books and academic articles; approach of Richard Oliver 2005 to explanation of satisfaction and dissatisfaction is represented as the customer buys services and products under the effect of expectations about anticipated performance actually when the product or service is purchased, the consumers compare the actual performance with expectation.

However, customers who are merely satisfied are only at the first stage and they can easily switch to other companies. At Most Customers range from being moderately satisfied to moderately dissatisfied, which means that most customer are essentially ambivalent in their loyalty to a particular business. These customers would likely defect in the presence of even a modest motivator; such as getting a better price or

finding a more convenient store location.( Olorunniwo, F., Hsu, M.K., & Udo, G. F. (2006)

HOW CUSTOMER SATISFACTION WORKS OR OPERATES.

From the diagram above, any company wanting to satisfy their customers must first: ascertain the customers` needs. Failure to do this, they will end up providing wrong products and services which in the long run will lead to decline in sales, lower profits and above all run out of business.

For example, a company’s marketing and sales team may ask one of the following questions in their quest to better understand their customers’ needs;

1. Who are our potential customers and existing customers?

2. What are their needs? 3. Where are they coming from? 4. What are their socio-demographic characteristics, i.e. sex, age, income, ethnicity, etc.?

Lastly, the customer value is when a product or service offer delivers value and satisfaction to the target buyer. The buyer chooses between different offerings on the basis of which is perceived to deliver the most value. We define value as a ratio between what the customer gets and what he gives. The customer gets benefits and assumes costs, as shown in this equation:

Value= Benefits = Functional benefits + emotional benefits

Cost (sacrifice) M onetary costs + time costs+ energy costs + psychic costs

Based on the above equation, organizations can increase the value of customers offering by:

Raising benefits

Reducing costs or sacrifices

For companies to ensure a successful Customer Relationship Management (CRM) in their operations there is the need for companies to analyze the operational effectiveness of the concept, customer satisfaction (CS).

THE EFFECTIVENESS OF CUSTOMER SATISFACTION IN ENSURING A SUCCESSFUL CRM

According to Jamal and Naser (2003), if customers were satisfied with the services of the firm;

• They will be more likely to give more credit to this firm compared to those firms they were not satisfied with and hence less likely to engage in repeat purchases.

• Similarly, if the customers are satisfied with the services of the firm, then they will be more willing to engage in repeat purchases and develop their relationship with that firm.

However, satisfying customers is not enough to retain them because even satisfied customers defect at a high rate in many industries. Customers’ behavior is mainly shaped by their needs and expectations. The desired outcome of expectations is getting what one anticipates from a service encounter as a consumer. Needs focus on obtaining what one seeks from life as a person, therefore the firm should: Understand that people strive to satisfy core needs in life at a level more fundamental and compelling than meeting their expectations as consumers.

However, in reality, 95 percent of dissatisfied customers do not make any complaints, they just leave. As a result it is important for firms to make it easy for the customers to complain. Dissatisfied customers who usually complain, about 54 to 70 percent of them will continue to do business again with the organization if their complaints are taken care of and resolved, and may even be 95 percent if the complaints receive quick response and action. (Kotler, 2009).

SIGNIFICANCE OF CUSTOMER SATISFACTION (CS) IN ENSURING SUCCESSFUL CRM IMPLEMENTATION.

1.They focus employees on the importance of fulfilling customers’ expectations.

2.Customer satisfaction warns of problems that can affect sales and profitability.

3. It ensures customer loyalty which gains positive word of mouth that is free and highly effective. This therefore reduces company advertising cost.

4.Customer satisfaction provide referrals and more use of the product and higher levels of customer retention and loyalty.

One of the major concern with the concept of CS is how companies measure performance on a scale. When performance is measured on a scale, it makes it very difficult to make the translation between the scale and what that change means in the real world.

LIMITATIONS OF THE CONCEPT CS

Another limitation of the concept is inferring importance from performance. Most service quality or customer satisfaction approaches do not actually measure importance at all. They either correlate or regress performance scores of a key driver against some measure of overall satisfaction.

Moreover, many companies find it difficult to link customer satisfaction to real world outcomes. Customer satisfaction measurement typically calculates an overall index (CSI).When this index is tracked over time, we can see whether the organization is improving or not. The more advanced traditional customer satisfaction protocols even build simulation models that allow a strategist to change the performance of an attribute.

SUGGESTION AND JUSTIFIED RECOMMENDATIONS.

1. Customer data base should be shared among the business units in all departments 2. Also, companies that want to achieve successful CRM must learn how to handle customer complaints in more proactive and prompt manner.

3. The company should process the compilation of a database to allow the implementation of CRM containing the elements of customer life time value (LTV). In the future, LTV may be calculated and compiled for customers.

Therefore customer satisfaction is a key element that must be practice in tourism and hospitality industry because every CRM Project undertaken by any tourism and hospitality company is likely to fail if still the expectation of guest is not met. Hence, Customer satisfaction measurement (CSM) is the principal tool by which marketers’ uses to assess the health of their relationships with their customers.

CONCLUSION