Customer Satisfaction

This chapter relates to the revision of relevant literature. It covers both theoretical and experimental literature. It is organized into: customer satisfaction, service quality, customer satisfaction and banking sector.


Those who purchase the products or services provided by the companies are customers. In other words, a customer is an interested party in an organization that makes payment in exchange for the offer that the organization offers to meet a need and maximize satisfaction. Sometimes, the term customer and consumer are mixed up. A customer can be a consumer, but a consumer may not necessarily be a customer. Another author clarified this variance. That is, a customer is the person who makes the purchase of the products and the consumer is the person who eventually consumes the product (Solomon, 2009). When a customer is satisfied with the product or services, it is called satisfaction. Satisfaction can also be the sense of pleasure or disappointment of a person as a result of the comparison between the perceived performance or the result of a product and its expectations (Kotler and Keller, 2009).

In fact, satisfaction could be the pleasure gained from the consumption of goods or services offered by another person or a group of people; or it can be the condition of being pleased with a situation. Satisfaction fluctuates from person to person because it is useful. "One man's food is another man's poison," said an old adage describing utility; highlighting the fact that sometimes it is very complicated to placate everyone or establish satisfaction among a group of individuals. Customer happiness, which is a sign of customer satisfaction, is and has always been the most crucial aspect for any organization. Customer satisfaction has been explained by an author as "the consumer's response to the evaluation of the perceived distortion between previous expectations and the actual performance of the product or service perceived after consumption" (Tse and Wilton, 1988), therefore, taking into account satisfaction as a general assessment after the purchase by the consumer "(Fornell, 1992). Some writers have indicated that there is no one meaning to customer satisfaction and after studying different definitions defined customer satisfaction as “a response (cognitive or affective) that is related to a particular focus (ie, a purchase experience and / or associated product) and takes place at a particular time (ie, after purchase, after consumption) "(Giese & Cote, 2000) This definition is buttressed by other authors, who think that the level of satisfaction of a consumer is determined by their experience accumulated in the point of contact with the supplier (Sureshchander et al., 2002). In fact, there is no distinctive definition of customer satisfaction because over the years, different authors have different definitions. Also defined by another author as the extent to which the perceived performance of a product corresponds to the expectations of the purchaser (Kotler et al., 2002). According to Schiffman and Karun (2004), customer satisfaction is defined as "the perception that the individual has of the performance of products or services in relation to their expectations". In short, customer satisfaction could be the pleasure that comes from consuming an offer.

2.1.1 Measuring Customer Satisfaction

It can be very challenging sometimes to measure customer satisfaction because it is an effort to measure human feelings. It is because of this, that a current researcher has stated that "the easiest way to know how customers feel and what they want is to ask them". This is relevant to informal measures (Levy, 2009, NBRI, 2009). Levy (2009) in an inquiry of his, suggested three ways to measure customer satisfaction:

 A survey in which customer feedback can be transformed into measurable quantitative data:

 Focus groups or informal groups in which discussions organized by an expert moderator reveal what customers think.

 Informal measures such as reading blocks, talking directly with customers. Asking each customer is advantageous to the extent that the company will know the feelings of all and will be unfavorable because the company will have to collect this information from each customer (NBRI, 2009).

The National Business Research Institute (NBRI) has suggested likely levels that can be used to measure customer satisfaction, namely quality of service, speed of service, prices, complaints or problems, confidence in their employees, proximity to your company's contacts, other types of services needed and your positioning in the minds of customers.

There are two conceptualizations of customer satisfaction; transaction-specific and cumulative (Boulding, et al., 1993, Andreassen, 2000). By transaction-specific, customer satisfaction is seen as a post-electoral assessment of a specific purchase opportunity (Oliver, 1980). To date, researchers have developed an abundant corpus of literature focused on this background and the consequences of this type of customer satisfaction at the individual level (Yi, 1990). The cumulative customer satisfaction is a general rating based on the total experiences of purchase and consumption with a product or service over time. (Fornell, 1992, Johnson and Fornell 1991). This is rather fundamental and useful than the transaction-specific customer satisfaction in forecasting a client's subsequent behavior and past, present and future performance of the company. It is the satisfaction accumulated by the customer that influences the investment of a company in customer satisfaction.

2.1.2 Customer satisfaction models

 Disconfirmation model proposed by (Oliver R. L., 1980)

According to (Oliver R. L., 1980), the customer satisfaction model elucidates that when customers contrast their perceptions of the actual performance of products or services with expectations, feelings of satisfaction arise. Any inconsistency between expectations and performance creates a negative affirmation.

He identified three (3) types of disconfirmation. They are:

 Positive confirmation: occurs when the performance of products or services exceeds expectations. In this case, the customers are very satisfied.

 Negative disconfirmation: this happens, on the other hand, when the performance of products or services is lower than expected. In this case, customers are very dissatisfied.

 Zero Disconfirmation: This occurs when the performance of products or services is equal to expectations. Therefore, the customers are neither very satisfied nor dissatisfied. They feel "ok" by how things happen. The disconfirmation theory propounds that "satisfaction is related to the size and direction of the disconfirmation experience that occurs as a result of the comparison between service performance and expectations". Szymanski and Henard (2001) found in the meta-analysis that the paradigm of disconfirmation is the best predictor of customer satisfaction.Satisfiers, Dissatisfion And Delighters Or Exciters Model Proposed By Noriaki Kano (1984)

 The Kano model is a concept of product development and customer satisfaction that ranks customer preferences. The model offers an idea of product attributes which are considered important to customers. It focuses on the differentiation of product characteristics, instead of initially focusing on customer needs.

 Satisfiers: these are the characteristics that customers say they want in the product and the presence of such characteristics leads to satisfaction.

 Dissatisfiers: these are the expected characteristics of a product whose presence lead to customer dissatisfaction. They have the nature of not being often mentioned by customers when asked what they are looking for in a product, because they should be there as the customers expect.

 Delighters or Exciters: At this level, innovation or a new product is unquestionably the facilitator in providing these attributes to customers. According to Kano, delighters are the most powerful and have the potential to generate the highest gross profit margins. The attributes of the excitement are, more often than not, not visibly seen by the consumer, but they can produce supreme satisfaction. The beauty behind an excitement attribute is to stimulate the imagination of a potential consumer. These attributes help the consumer to discover the needs he had never thought about before. Having excitement attributes simultaneously within a product can provide a significant competitive advantage over competition. In a wide range of products, the excitement attributes trigger needs and wants that are impulse in the customer's mind. The more the customer thinks of these incredible new ideas, the more he wants them.


Service quality definitions vary only in terms, but typically involve determining whether perceived service delivery meets or does not meet customer expectations or even surpasses it (Cronin and Taylor, 1992; Oliver, 1993; Zeithaml, Berry, and Parasuraman, 1993). Service quality was defined by Czepiel (1990) and the client's perception of how well a service meets or exceeds expectations. Service quality is generally seen as a critical and determining prerequisite of competitiveness for establishing and maintaining satisfactory customer relationships. Previous studies suggest that quality of service is an important indicator of customer satisfaction (Spreng and Machoy, 1996). Concentrating on quality of service can differentiate an organization from other organizations and achieve lasting competitive advantage (Boshoff and Gray, 2004).

Actually, consumers fancy the quality of service when price and other cost factors remain constant (Turban, 2002). It has become a distinctive and important aspect of the offer of products and services (Caruana, 2002). The satisfaction that a customer gets for the quality of the service offered is often assessed in terms of technical quality and functional quality (Gronroos 1984). Typically, customers do not know much about the technical aspects of a service; therefore, functional quality becomes the central point from which perceptions of service quality are formed (Donabedian, 1982).

Writers on customer relationship management such as Aga and Okan (2007) and Naeem and Saif (2009) all indicate that quality service constitute the central theme necessary for delighting and eventually retaining customers. Quality has been seen by Cronin et al., (2000) as something that comes out from the views of customers. In other words, what customers say, constitute quality. Berman (2005) explains further that at the modern market place, we don’t give customers what we have but rather what they want. This means that marketers ought to sharpen their skills in customer relationship management tools so as to enable them properly evaluate the needs of consumers and produce to satisfy such needs.

Quality can be said to be made up of various forms which have been categorized for services into five dimensions by Parasuraman et al (1988) within the SERVQUAL measurement instrument. To start with, Cronin et al., (2000) indicate that the five forms of quality can be measured by first observing the apparent gap between management’s perception and customer’s expectation; here it is possible for management to fail to correctly understand what the consumer might describe as quality. Secondly, from the point of view from the customer, the gap between management and customer perception concerning service quality ought to be noted for thorough analysis.

Here, the management could positively perceive customer’s needs and wants yet could have difficulty in setting specified productive standards which should be in line with the customer’s expectations. Thirdly, the gap between service quality specifications and service delivery employees may be difficult to fill owing to non-availability of the needed skills for meeting productive standards. The fourth step entails examining and closing up the gap between external communication and service delivery. This means, customer’s perception may be influenced by the image of the company and the kind of advertisements that are conducted. The concluding step i.e. the fifth one, centers on the gap between expected services and perceived service. This according to Kumar et al (2001) could arise when consumers have different perceptions of the kind of service being rendered.

According to Colgate et al (1996), in customer retention, defining quality is not restricted to the end product or service, but includes issues of employee fulfillment, continuous improvement and management directions. However, companies in the trading services can employ a range of systems, including reward incentives and part company ownership, to generate an interest by those producing or delivering the products and services in gaining a steady enhancement in meeting customers’ expectations (Alvarez, 2001).

2.2.1 Service quality model

 Gap model theory (SERVQUAL)

The Gap model or the SERVQUAL model is a service quality framework. It was developed in the mid-1980s by (Parasuraman et al., 1985). SERVQUAL is a means of measuring the scale of quality in service sectors. The perceived quality of service can be defined as, depending on the model, the difference between consumers' expectations and perceptions that ultimately depend on the size and direction of the four gaps in relation to the delivery of service quality by the company. (Parasuraman et al., 1985). Customer gap = f (Gap 1, Gap 2, Gap 3, Gap 4).

The size and direction of each gap will influence the quality of the service. For example, Gap 3 will be favourable if the delivery of a service surpasses the service standards required by the organization and, will be unfavorable when the specifications of the service provided are not met.

Figure 1:The Integrated Gaps Model of Service Quality