A Literature Review and Critique on Customer Satisfaction

Abstract

Customer satisfaction has become a significant focus in the past few years, prompting organizations to delve into understanding different models related to this concept.

The main aim of this paper is to examine the essential ideas and frameworks surrounding customer satisfaction. This topic incorporates keywords such as customer satisfaction, definition, macro-models, and micro-models.

Introduction

Both the public and private sectors have focused on customer satisfaction in recent decades, leading administrators to request staff to conduct studies in their organizations. To measure it, analysts or researchers must operationalize the concept of customer satisfaction.

For measurements to be valid, it is crucial for analysts to assume a model of the subject matter. Analysts must rely on explicit conceptualizations, or models, to ensure their research and analysis are applicable to organizational decisions.

This paper is structured into multiple sections. Initially, we present a concise review of the essential principles of customer satisfaction. Subsequently, we present an outline of customer satisfaction models for analysts. Lastly, we conclude the article by highlighting the primary research findings.

Consumer Satisfaction

The topic of customer satisfaction has been widely discussed in both marketing practice and academic research ever since Cardozo’s (1965) initial study on customer effort, expectations, and satisfaction. Despite numerous efforts to measure and explain customer satisfaction, there is still no consensus on its definition (Giese and Cote, 2000). Typically, customer satisfaction is defined as an evaluative judgment made after consuming a particular product or service (Gundersen, Heide and Olsson, 1996). It is the result of comparing pre-purchase expectations with the actual experience.

Many studies have been conducted on perceptions of performance before and after consuming a product or service (Oliver, 1980). The expectancy disconfirmation theory, which was introduced by Oliver, is the most widely accepted framework for understanding customer satisfaction (McQuitty, Finn and Wiley, 2000). According to this theory, satisfaction is determined by the gap between expected and perceived performance. If a product or service exceeds expectations (positive disconfirmation), satisfaction is achieved. On the other hand, if performance falls short of expectations (negative disconfirmation), dissatisfaction occurs.

According to studies, customer satisfaction can have both a direct and indirect effect on business outcomes. Luo and Homburg (2007) found that customer satisfaction has a positive impact on business profitability. Several studies have examined the relationship between customer satisfaction and behavior patterns (Dimitriades, 2006; Olorunniwo et al., 2006; Chi and Qu, 2008; Faullant et al., 2008). These studies suggest that customer satisfaction boosts customer loyalty, affects repurchase intentions, and results in positive word-of-mouth.

Customer satisfaction is essential and has been the subject of various research studies. These studies investigate the factors that influence customer satisfaction, including subjective factors like customer needs and emotions, as well as objective factors such as product and service features. In the hospitality industry, researchers have examined attributes that are important for satisfying travelers. According to Atkinson’s (1988) study, cleanliness, security, value for money, and courtesy of staff are essential for customer satisfaction.

According to Knutson (1988), factors such as room cleanliness, comfort, convenience of location, prompt service, safety and security, and friendliness of employees are essential for hotel guests. Barsky and Labagh (1992) added that employee attitude, location, and room quality also play a significant role in influencing travelers’ satisfaction. Akan (1995) conducted a study that revealed the key determinants of hotel guest satisfaction to be the behavior of employees, cleanliness, and timeliness. In a similar vein, Choi and Chu (2001) concluded that staff quality, room qualities, and value are the main factors that contribute to travelers’ satisfaction with a hotel.

Customer Satisfaction Models

The conventional macro-model of customer satisfaction.

1. Perceived performance often differs from objective or technical performance, especially when a product/service is complex or intangible, and the consumer is unfamiliar with it.
2. Comparison standards can come from numerous sources that vary widely by individual, situation, and product/service type.
3. Perceived disconfirmation is the evaluation of perceived performance according to one or more comparison standards. Disconfirmation can have a positive effect (generally implying a satisfying result), a negative effect (generally implying a dissatisfying result), or no effect at all.
4. The feeling of satisfaction is a state of mind and an attitude. The phrase “mixed feelings” applies here because consumers may have different levels of satisfaction for different parts of their product/service experience.
5. The outcomes of satisfaction feelings may involve intent to repurchase, word-of-mouth communication with their network about their approval/disapproval for the product/service, and complaints.

In addition, the text emphasizes the idea of a “global” level of satisfaction, which pertains to overall service satisfaction, as opposed to a “component” level of satisfaction, which relates to satisfaction with a particular service encounter. These models are useful in understanding survey results that demonstrate different levels of satisfaction among individuals who experience the same service. These models offer analysts valuable context for comprehending and examining customer satisfaction. The subsequent section will delve into more specific facets related to customer satisfaction.

1. The Expectations Disconfirmation Model has been the dominant model in satisfaction research. The model states that consumers use pre-consumption expectations to compare with post-consumption experiences of a product/service and form an attitude of satisfaction or dissatisfaction towards it. In this model, expectations come from beliefs about the level of performance that a product/service will provide. This is the predictive meaning of the expectations concept.
2. The Perceived Performance Model differs from the above model in that expectations play a less significant role in satisfaction formation. The model works well when a product/service performs so positively that the consumer’s expectations get discounted in their post-consumption reaction to it.
3. Norms Models resemble the Expectations Disconfirmation Model in that consumers compare perceived performance with some standard for performance. However, instead of using predictive expectation, they use what should happen as their comparison standard.
4. This is the normative meaning of should” rather than its occasional chronological connotation in English language.
5. Multiple Process Models characterize satisfaction formation process as multidimensional. Consumers use more than one standard of comparison to form a (dis)confirmation judgment about an experience with a product/service.
6. Attribution Models integrate perceived causality for a product/service performance into satisfaction process. Consumers use three factors – locus of causality, stability, and controllability – to determine attribution’s effect on satisfaction. Locus of causality can be external (service provider gets credit or blame) or internal (consumer is responsible for product/service performance). Stable causes tend to have more impact on satisfaction because consumers are more forgiving towards rare events causing failures. Controllability affects attribution because poor outcome may lead to unsatisfaction if consumer believes provider had capacity/control but failed anyway.
7. Affective Models differ from previous models by going beyond rational processes. In these models, emotion, liking, and mood influence (dis)satisfaction feelings following the consumption experience.
8. Equity Models emphasize consumer’s attitude about fair treatment in the consumption process. Fair treatment can use equity ratio (amount of return for effort made) or social comparison (perceived relative level of product/service performance that other consumers experience).

There are different ways to define the concept of need, one being Maslow’s hierarchy of needs. The standard of excellence is the idea of technical perfection based on objective and widely recognized criteria. The standard of regret is when a consumer feels a sense of “what might have been” if they had chosen a different provider. The nothing standard refers to situations where consumers feel (dis)satisfaction without cognition.

Conclusion

This paper summarizes a large body of market research focusing on customer satisfaction. However, it only provides a partial coverage. For clarity, we have organized satisfaction models into macro and micro levels, noting that the macro-models encompass the micro-models and there may be some conceptual overlaps. It should be noted that other analysts may have different approaches to conceptualizing these models. If an analyst plans to conduct a customer satisfaction study, it would be beneficial to refer to both insightful works and previously cited works.

Analysts may need to invest a substantial amount of time and effort in reviewing the available information. Nonetheless, gaining knowledge about customer satisfaction models can offer valuable insights for future analyses. At the very least, utilizing the aforementioned material will set a solid foundation for understanding customer satisfaction. This study received support from the University of International Business and Economics’ 211 Project (No. 73200008) and the National Social Science Fund of China (No. 07BJL047).

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