How To Build Customer Satisfaction Value And Retention

Customer satisfaction refers to the act of meeting customer expectations. This is measured using services, products, engagement and support. It determines how well and efficiently our physical products, services i.e. issues relating to customers, support i.e. repair and maintenance and engagement i.e. the act of customer involvement are set with the aim of pleasing the customers. There is a direct link between customer value and perceived satisfaction. On the other hand, customer retention refers to the period of stay and engagement of customer and the organization .

There are decisions that need to be reached in building customer satisfaction, value and retention. A survey aimed on understanding the behaviours, attitude and preferences of consumers is necessary. The customer is bound to shop for those products that meet his needs as he is the king. With today’s companies’ new challenges ranging from stiff competition, global business, and standardization and demanding customers good decisions should be made to ensure that the company is able to make profits and on the other hand retain its market share. Some of the decision that a company may reach includes lowering operational costs, products of high quality, customer satisfaction and retention among others. With regards to these decisions thus, customer needs and wants must be taken into consideration. Pascale, Q, &Robyn, M. (2006).

In today’s business environment, creativity and innovation is the driving force behind company’s profits and growth. It involves the implementation of new or improved ideas, practices, processes, goods or services which are meant to be useful. With regard to building customer satisfaction, adding value and retaining them, innovation can be classified into four main categories namely; product branding and brand name, continous product development, product and market differentiation and quality perceptions of customers.

A brand name identifies a company’s products from other products in the market. It is a name that builds feeling of trust and confidence among consumers. It also provides assurance about methods and place of production. The reasons of branding though are to offer a perceived uniqueness concerning products, to enhance customers’ goodwill value and to distinguish products in the face of competition. The strategies of product branding by several companies includes reseller branding, manufacturer branding and mixed branding. The manufacturer branding approach entails the producer determining the brand name through multibranding i.e. a single name is given for all the company’s products .Due to the intangible nature of services, an identifying logo is important as far as consumer decisions are concerned. An excellent brand name is the one that suggests the benefits derived as a result of product consumption, should be short and easy to remember, reflect the company’s image and most importantly free from any legal restrictions. Some of the factors that increases the brand strength in many organizations includes; the quality of the product, consistency in advertising, intensity in distribution and brand personality. These factors are also associated with an increase in marginal revenue.

Product and market differentiation are other forms of innovation and creativity employed by many firms. Product differentiation is used to differentiate products in case of monopolistic competition. Monopolistic firms produce goods which are almost similar in terms of their physical characteristics. The product characteristics which differentiation may be based are patent features, trade names, trade marks, style, design or color. The conditions surrounding the sale of the product may also be used in differentiation. Differentiation may induce consumers to treat brands from rival firms as not as substitutes even in a case where there is no difference as far as their physical attributes and performance are concerned. Continuous product development should also be carried out to enhance quality perceptions of customers.

The relationship between the buyer and the seller is very crucial as far customer satisfaction and retention are concerned. This relationship depends on the character of both parties. The liberalization of the economy brought about change as far as this relationship is concerned. Though the customer may not be very much demanding, he is concerned about the relationship that exists between the suppliers of the products with the manufacturers. This relationship is important as it determines the guarantee that the customer is entitled to. A customer -oriented culture is essential in any organization it is widely recognized that customers play a vital role in service organizations as customers plays an important role in the success of any business.

There is a need to check on the consumption cycles in the road towards customer satisfaction, adding value and retaining them. There is a need to determine the fluctuations of the products consumed by the consumers so as to ensure that there is always enough stock and to avoid disappointments on the part of consumers. Stock levels should be checked regularly and replenishments made as and when necessary. Consumers find it annoying once they find that the commodity they were willing to purchase is lacking in the shelves.

Consumers need to be involved for them to feel that they are being appreciated. It has been established as a crucial factor that enhances fully service development. Customer involvement is associated with positive effects as far as innovation speed and technical quality are concerned. The problems relating customers’ needs to be addressed very carefully. One should observe calmness and should never rush to criticize or condemn a customer in case there is a confrontation.

This is aimed at ensuring that the customer returns in the same company in the future and does not feel ashamed or offended of the dealers. The root of the problem needs to be addressed first i.e. the specific problem. After identifying the problem, one needs to determine the possible causes of the problem. Possible solutions of the problem should then follow and the best possible alternative or solution is chosen.Finally, an implementation plan is created which ensures that the problem does not occur again in future.

Another aspect that needs to be addressed so as to add value, satisfy and retain customers is the sensitivity of the product life cycle. This refers to the path that a new product passes through i.e. from introduction stage, growth stage, maturity stage, and finally the decline stage. the products profits and revenues reacts in accordance to the product life cycle. The main focus of the firm in the introduction stage is to create product awareness in order to develop a market in the future. This stage is characterized by high costs as the firms have not retained a market share and also due to the fact that the consumers have not fully accepted the new product. For manufacturers, immediate profit at this level is usually not a major concern. The product is thus promoted so as to create awareness. Edmund, B (2007).

The growth stage is characterized with the competitors offering the same products in the market. In this stage, companies enjoy huge profits and alliances, take over and joint ventures are common. The advertising costs are also high .After this stage, the maturity stage enters through which the sales volume starts to decline. Product differentiation and branding is a key element in this stage as completion becomes stiffer. The market is thus saturated at this stage. Some producers exit the market as a result of poor margins.

The last stage in a product life cycle is the decline stage. There is a downturn at this point in the market .This is due to the fact that there are a wide variety of innovative products and also the tastes and preferences of consumers have changed. At this point though, profits can be increased due to a reduction in the marketing spending campaigns each stage of product life cycle needs to be observed carefully as it has an effect as far as profits and margins are concerned. They also need to make good decision at each stage so as to ensure that there is satisfaction and value creation on the part of the consumers.

An organization also needs to come up with strategic planning measures. A strategic plan ensures that mangers and entrepreneurs do not lose a vision of their laid down objectives. A strategic plan serves as a guideline for the decisions as it provides a detailed planning of the activities and tasks assists in performance monitoring and benchmarking as well as stimulating change and providing a building block as far as the next cause of action is concerned. A strategic plan provides direction for the organization and assist in organizations’ resource allocation. A SWOT analysis i.e. strengths, weaknesses, opportunities and threats is a technique commonly applied in strategic planning. Other techniques includes an overview of the organizations environment i.e. both macro and micro environment. As far as customer satisfaction, retention and adding value are concerned, a strategic plan ensures that managers are aware of what to do and how to excel in the business amid stiff competition.

Employee involvement is an important aspect in any organization and it ensures customer satisfaction, value addition and retention. It enables them to make concrete decisions about their day to day activities in the organization. As a result it leads to loyalty and a sense of ownership which in return enables them to serve customers effectively. Participation of employee’s in determining how their tasks should be carried out, suggestion making for improvement, planning, goal setting and performance monitoring encourages the employees. Employees who are involved feel motivated and their performance is greatly enhanced. Ringold, D, &Barton, W. (2007).

With regard to choosing and targeting the right segment of the market, the 4ps i.e. product, price, placement and promotion are used. The product mix ensures that the products please the targeted customers. The considerations in this are the branding, product formulation and packaging. The price mix determines the cost of the product in the eyes of the consumers. It should thus be reasonable and not aimed at exploiting them. Incentives should thus be considered where necessary. In placement, the product should be accessible to the targeted audience. The type and the operating hours of an outlet should be factored in as far as placement is concerned. For promotion, the communication and advertising channel should be those that are being used by the targeted audience. The four marketing mix strategies should be closely connected so as to achieve the objective of value creatioin, employee satisfaction and retention.

Another aspect that needs to be considered is the total quality management aspect. It refers to a managerial philosophy which aims at integrating all the functions of an organization i.e. marketing function, finance function, production function, and human resource among others. Total quality management assists in empowering the organization from the support staff to the management staffs.Basically, every organization have Total quality management i.e. from the very small business enterprises to government level. This philosophy is virtually applied anywhere the quality is considered.

Another aspect aimed at ensuring customer satisfaction, value creation and retention is the corporate social responsibility. It is all about how organizations manage their business processes so as to create an overall impact on society. Some businesses usually embrace social corporate responsibility due to their impact of their day to day activities on consumers, environment, communities, employees and all other stakeholders. Thus a company accounts for its actions in the society by being involved in social corporate responsibility.

Another factor that should be considered in an effort to building the satisfaction of customers, creating value and retaining them is competitive advantage. It refers to the advantage that a particular organization derives over a long period of time as a result of its unique characteristics despite competition in the market. A firm is considered tom posses a competitive advantage with respect to its rivals if it sustains profits that goes beyond the average in the industry in which it operates. Competitive advantage ensures that the firm creates value for its customers and continues to make superior profits .There are two main categories of competitive advantage i.e. cost advantage and differentiation advantage. With regard to the two main types of competitive advantages, a firm may posses a competitive advantage in capabilities and resources e.g. patents , trademarks, brand equity, firm’s reputation, know how of the property and brand equity. The competitive advantage is enhanced using the capabilities and resources in order to have a differentiated product or to lower the cost structure.

Customer satisfaction, value and retention can only be achieved if all the above factors are put into consideration. There is also a link between customer retention and their satisfaction. Well satisfied customers tend to create a loyalty with the organizations’ products.