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Tuesday, September 28, 2021

Customer Delight - That Sounds About Right or Not Quite? [36] *



There are two schools of thought on customer delight -- it is an extreme form of customer satisfaction (very satisfied) or it is a distinct marketing construct. While the latter position has gained traction recently, this debate is far from settled.

Highly Satisfied or Customer Delight?

> Position A - Highly Satisfied

Customer satisfaction is frequently measured on a five-point Likert scale. While there are many variants of the approach, it is typically measured as follows: 1) highly dissatisfied, 2) dissatisfied, 3) neither satisfied or dissatisfied, 4) satisfied, and 5) highly satisfied. The “5” option may be viewed as a proxy for customer delight. In such cases, customers tend to be highly loyal and not prone to defection. The “4” score implies satisfaction but since it is not strong, customers generally are not very loyal and may defect. Customer satisfaction measures of 1-3 imply major or minor levels of dissatisfaction. In such cases, customers are likely to seek alternative vendors.  

This is analogous to the single-item, 11-point Net Promoter Score scale where respondents that give the organization a 9 or 10 are highly satisfied (promoters); 7 or 8 are somewhat satisfied (passives); and 0-6 are dissatisfied (detractors). Bain & Company has found that long-term value creators such as American Express, Publix Super Markets, Ritz-Carlton, and USAA have NPS scores of twice that of the average company and leaders grow at twice the rate of competitors. The customer satisfaction metric is so important that Lexus uses this basic scale in assessing service quality for their vehicles. In fact, one of their research instruments advised customers to immediately call the service manager if they were not totally satisfied with the service experience (i.e., unable to respond with a “5”).                          

> Position B - Customer Delight

Superior customer value means to continually create business experiences that exceed customer expectations. Innovative companies such as Tesla are not content with customer satisfaction; they strive to amaze, astound, delight or wow them (at least some of the time). Tesla’s $35,000 Model 3 electric vehicles received more than 400,000 pre-orders more than a year before it went to market. Other exciting business initiatives by Tesla include its multi-billion dollar Gigafactory (a battery production facility) and futuristic Hyperloop transportation system. 

While the pursuit of exceeding customer expectations is quite desirable, reality often dictates that customers are most satisfied when firms avoid disappointing them rather than trying too hard to delight them. Therefore, organizations must focus on the business fundamentals and have a flawless execution of operational basics. In rare instances of service failure, service recovery must be a priority. In most cases, customers can not truly articulate how to improve service experiences or what they are seeking to be delighted. 

In contrast, customers can readily identify attributes that are dissatisfiers/hygiene factors (must-haves) and satisfiers (nice-to-have attributes). The hygiene factors constitute the minimally acceptable level of service attributes that customers would expect to be present in the service offering.  For example, a mid-priced hotel catering to business travelers would be expected to offer such services as express check-out, fitness room, high-speed internet connections, a restaurant, and a lounge. Failure to offer these services or to perform or deliver them poorly will likely lead to dissatisfaction. In contrast, simply offering these services and performing them adequately will not delight the customer --the customer expects them as part of doing business. 

Truly delighting customers requires service providers to carefully consider satisfiers.   Satisfiers are those service attributes that both differentiate the service firm from its competitors, while at the same time exceeding customer expectations in one or more areas of service by delivering above what is expected.  Hygiene factors need to be delivered at an acceptable level before satisfiers become important. Satisfiers have the potential to create high customer satisfaction levels once expectations on hygiene factors have been met.  Firms that would offer satisfiers need to consider the value-added services that would both delight and surprise the customer. It should be emphasized that service quality is more than simply meeting specifications and that the customer's point of view is what matters (i.e., is the customer delighted?) Hence, customer satisfaction is what the customer says it is.

Consider some of the following examples in the effective use of satisfiers. Before a guest ever sets foot in Le Parker Meridian Hotel in New York they can use the hotel’s QuickTime Virtual Reality (QTVR) enabling potential guests to "walk" through the lobby and rooms.  In addition to virtual reality tours, the site offers in depth, timely information about room rates, events and points of interest for the business and pleasure traveler. The hotel also welcomes repeat guests with amenity baskets accompanied by handwritten notes.                          

Zappos, a billion dollar shoe, handbag, and clothing company owned by Amazon, aims to deliver “Happiness in a Box.” Their three-part formula is to: 1) meet expectations by delivering the right items, 2) meet desires through free shipping, free return shipping when necessary, and a 365 day return policy and 3) often delight customers via surprise upgrades to overnight shipping.

And conversely, bad-mouthing by dissatisfied customers can be not only harmful, but the very death knell to a company. Consider a case in point: one unhappy buyer at a computer superstore determined that this company lost $50,000 of his business (direct lifetime value) and another $350,000 (indirect lifetime value) due to negative word-of-mouth comments to his family and friends! Today, it’s very likely that dissatisfied consumers will post a bad review on Yelp, Facebook or Google. Negative comments via social media (word-of-mouse) can easily go viral leading to the need for damage control, a potential significant loss of business or even consumer boycotts.

Art Weinstein, Ph.D., is a Professor of Marketing at Nova Southeastern University. His research interests are customer value, market segmentation and entrepreneurial marketing strategies. He may be reached at art@nova.edu 

 

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