An Analysis of Customer Satisfaction and an Organizational Financial Performance
An Analysis of customer satisfaction and its financial impact on the organization
Introduction to Chapter;: All organizations aligned to providing a good or service to a customer
This chapter will see to outlin
Background
Every organization deals with the customers at some level, despite what the inner workings are composed of; the absolute end result is satisfying the customer each and every time that he or she uses the good or service that is being offered by the organization. Every contact that is made via telephone, face to face, letters or email can either cultivate or corrode the relationship with the customer thus affecting the overall satisfaction of the customer.
Customer satisfaction is defined as the degree of satisfaction provided for the use of a good or service by an organization. In addition to this it gauges at measuring how the service provided meet or exceed the overall expectation of the customer while evaluating the overall satisfaction by the number of repeat customers.
Previous studies have shown that satisfied customers generally tend to have a positive impact on a firm financial performance although the magnitude of the impact is highly variable. More so, it is said that happy (satisfied) customers spend more and are loyal thus impacting over 1000 top businesses by € 14 billion per year (Zeithaml (2000) and Rust et al. (2002)
Researchers have found that firms in Europe suffer a 37.6 million loss of profits every year and an average of 28 percent of revenue wastage on accounts payable due to customer dissatisfaction (Bielenberg, 2006). In addition to this, it is said that disappointments have been on the rise with the over emphasis on the use of aggregate financial performance measures, indicating that they are to late, too distorted ,too focused on past results and not focused on the root issue affecting the financial impact of the organization.
As such previous studies recognized that customer satisfaction is one that is more
Introduction to Chapter;: All organizations aligned to providing a good or service to a customer
This chapter will see to outlin
Background
Every organization deals with the customers at some level, despite what the inner workings are composed of; the absolute end result is satisfying the customer each and every time that he or she uses the good or service that is being offered by the organization. Every contact that is made via telephone, face to face, letters or email can either cultivate or corrode the relationship with the customer thus affecting the overall satisfaction of the customer.
Customer satisfaction is defined as the degree of satisfaction provided for the use of a good or service by an organization. In addition to this it gauges at measuring how the service provided meet or exceed the overall expectation of the customer while evaluating the overall satisfaction by the number of repeat customers.
Previous studies have shown that satisfied customers generally tend to have a positive impact on a firm financial performance although the magnitude of the impact is highly variable. More so, it is said that happy (satisfied) customers spend more and are loyal thus impacting over 1000 top businesses by € 14 billion per year (Zeithaml (2000) and Rust et al. (2002)
Researchers have found that firms in Europe suffer a 37.6 million loss of profits every year and an average of 28 percent of revenue wastage on accounts payable due to customer dissatisfaction (Bielenberg, 2006). In addition to this, it is said that disappointments have been on the rise with the over emphasis on the use of aggregate financial performance measures, indicating that they are to late, too distorted ,too focused on past results and not focused on the root issue affecting the financial impact of the organization.
As such previous studies recognized that customer satisfaction is one that is more