Customer satisfaction and retention: the experiences of individual employees
Ove C. Hansemark, Ove C. Hansemark is based at the Department of Work, Economics, and Health, University of Trollhättan/Uddevalla, Uddevalla, Sweden.
Marie Albinsson, Marie Albinsson is based at the Department of Work, Economics, and Health, University of Trollhättan/Uddevalla, Uddevalla, Sweden.
The purpose of this study was to explore how the employees of a company experience the concepts of customer satisfaction and retention. A phenomenological method was used, allowing the informants’ own interpretations to be discovered. Satisfaction was discussed from three perspectives: definition of the concept, how to recognise when a customer is satisfied, and how to enhance satisfaction. The informants’ experience pertaining to these three categories varied, and a total of seven ways to define, recognise or enhance satisfaction were discovered. These were: service, feeling, chemistry, relationship and confidence, dialogue, complaints and retention. All except the first two of these categories of experience were found to enhance retention, implying that the informants have found that strategies for enhancing both satisfaction and retention are similar. The strongest connection between retention and satisfaction strategies turned out to be in terms of relationship and confidence. Introduction
Customer satisfaction and retention are critical for retail banks, as they have an impact on profit (Levesque and McDougall, 1996). However, as business leaders try to implement the concept of customer satisfaction and/or retention in their companies, employees working with customers may come to regard customer retention (Levesque and McDougall, 1996) or satisfaction (Stauss et al., 2001) as in themselves the goal of business. Regardless as to what business leaders may be trying to implement in their companies, any employee interacting with customers is in a position either to increase customer satisfaction, or put it at risk. Employees in such positions should therefore have the skills to respond effectively and efficiently to customer needs (Potter-Brotman, 1994). Each individual in an organisation creates his or her own understanding of a phenomenon (Argyris and Schön, 1978), and each individual understanding consists of assumptions – not truths – as to the context. It is the understanding of the situation that provokes an action (Weick, 1979, 1995). An individual interprets the world through his or her own mental model, creating his or her own world; a reality of the second order thus arises (Watzlawick, 1976) that is in some way incomplete (Senge, 1990). It is the experience and attitudes of the individuals in closest contact with customers that are most likely to affect whether or not customers are satisfied and willing to return to the company. It is also the people in direct contact with customers who determine who the retained and satisfied customers are, and their experience determines how they treat the customers. However, we know very little about how employees in a company experience the concepts of customer retention and satisfaction. Customer satisfaction, rather than retention, has traditionally been the focus of research and managerial efforts. Customer satisfaction has been deemed directly to affect customer retention and companies’ market share (Rust and Subramanian, 1992). Service quality, service features, and customer-complaint handling determine customer satisfaction in banks. Service offerings, such as extended hours of operation and competitive interest rates also play a role in determining satisfaction (Levesque and McDougall, 1996). Later research, however, has indicated that companies are more successful if they apply customer-retention rather than customer-satisfaction strategies (Knox, 1998). Moreover, customer retention has been found to be a key to profitability (Desai and Mahajan, 1998) and an...
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