Factors Affecting Customer Satisfaction

Services exist only at the time they are provided. Therefore, services cannot be mass produced and stored in warehouses and sold when there is a market demand. We can prioritize the implementation of services in order of priority, but we cannot store services when needed. The non-storability of services is not a problem when demand is stable. When demand changes, service companies will have difficulties. For example, public transport companies must have many more vehicles than the number needed to meet normal demand throughout the day to ensure demand during peak hours. Therefore, services are products that are used when they are created and finished immediately after.

Non-transferability of ownership:

When purchasing a product, the customer is transferred ownership and becomes the owner of the product he has purchased. When purchasing a service, the customer is only entitled to use the service and enjoy the benefits that the service brings for a certain period of time. This characteristic affects the distribution policy in service marketing, in which wholesalers and retailers are not transferred ownership. They are simply participants in the service provision process. And of course, they have an impact on the quality of the service. Thus, the issue of training, support, consulting, and evaluation of distribution intermediaries is a necessary factor to ensure service quality.

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1.1.3. Theory of customer satisfaction

1.1.3.1. Concept of satisfaction

There are many different definitions of customer satisfaction. Many researchers believe that satisfaction is the difference between customer expectations and actual perceptions received.

According to Oliver and Bearden (1995), customer satisfaction is a business task expressed through the relationship between the values of products and services compared to customers' previous expectations about them.

According to Zeithaml & Bitner (2000), customer satisfaction is the customer's assessment of whether a product or service has met their needs and expectations.

According to Hansemark and Albinsson (2004), “Customer satisfaction is an overall attitude of a customer toward a service provider, or an emotional response to the difference between what the customer anticipated and what they received, regarding the fulfillment of some need, goal or desire”.

According to Kotler and Keller (2006), satisfaction is the level of a person's emotional state resulting from comparing the perception of a product against the person's expectations.

In short, satisfaction is a comparison between perceived actual benefits and expectations. If the actual benefits do not meet expectations, the customer will be disappointed. If the actual benefits meet expectations, the customer will be satisfied. If the actual benefits exceed the customer's expectations, it will create a phenomenon of higher satisfaction or satisfaction exceeding expectations.

1.1.3.2. Factors affecting customer satisfaction

Service quality:

Service quality is the factor that has the greatest impact on customer satisfaction (Cronin and Taylor, 1992; Yavas et al, 1997; Ahmad and Kamal, 2002). If a service provider provides customers with quality products that satisfy their needs, the business has initially made customers satisfied.

Service price:

Some researchers have found that there is a relationship between price and customer satisfaction (Varki and Colgate, 2001; Hong and Goo, 2003). When the price is perceived by customers to be high or low, the level of customer satisfaction will decrease or increase accordingly. Therefore, if this factor is not considered, the study of customer satisfaction will be inaccurate.

Other factors:

In addition to service quality and price affecting customer satisfaction, there are many other factors such as: supplier relationship, transaction time, customer psychology, promotional programs, etc.

1.1.3.3. Customer satisfaction index models

SERVQUAL Model (Parasuraman, 1988)

The SERVQUAL model was published by Parasuraman in 1985. It was then revised in 1988. According to Parasuraman, service quality is measured through 5 factors: Tangibles, reliability, responsiveness, service competence, and empathy. According to the SERVQUAL model, service quality is considered as the gap between service expectations and customer perceptions when using the service.

Trust

Response

Service capacity

Empathy

Quality of service

Tangible means

Figure 1.1. SERVQUAL model

(Source: Parasuraman, 1988)

SERVPERF model (Cronin and Taylor, 1992)

The SERVPERF model is a variation of SERVQUAL, which eliminates the assessment of expectations and retains only the assessment of customer perceptions. According to the SERVPERF model, satisfaction is assessed through customer perceptions of the five elements of service quality.

American Customer Satisfaction Index Model - ACSI

In the American Customer Satisfaction Index (ACSI) model, perceived value is influenced by customer perceptions and expectations. Customer expectations have a direct impact on perceived quality. In fact, the higher the expectations, the higher the customer's perceived quality standards for the product and vice versa.

Expectations

Customer complaints

Perceived value

Customer satisfaction

Perceived quality

Loyalty

Figure 1.2. American Customer Satisfaction Index (ACSI) model

(Source: Fornell, 1996)

Customer satisfaction index model of EU countries

The European Satisfaction Index (ECSI) model has certain differences. Compared to ACSI, the image of the product and brand has a direct impact on customer expectations. In that case, customer satisfaction is the total impact of 4 factors: image, perceived value, perceived quality of both tangible and intangible products. Normally, the ACSI index is often applied to the public sector, while the ECSI index is often applied to measure products and industries.

Image

Expectations

Perceived value

Perceived quality-prod

Customer satisfaction

Loyalty

Perceived quality-serv

Figure 1.3. EU Customer Satisfaction Index (ECSI) model

(Source: European Customer Satisfaction Index - ECSI)

1.1.3.4. The relationship between service quality and customer satisfaction

Customer satisfaction and service quality are two distinct but closely related concepts. Service quality is an objective, evaluative and cognitive concept, whereas satisfaction is a combination of subjective components, based on feelings and emotions (Shemwell et al., 1998, cited in Thongsamak, 2001).

Parasuraman et al. (1993) argued that there are some differences between service quality and customer satisfaction, the main difference being the issue of “cause and effect”. Zeithalm and Bitner (2000) argued that customer satisfaction is influenced by many factors such as: product quality, service quality, price, situational factors, and personal factors.

In short, service quality and customer satisfaction are closely related.

together, in which service quality is what is created first, deciding satisfaction.

of the customer. The causal relationship between these two factors is the key issue in most customer satisfaction studies. If the quality is improved but not based on the customer's needs, the customer will never be satisfied with the service. Therefore, when using a service, if the customer feels the service is of high quality, he will be satisfied with that service. Conversely, if the customer feels the service is of low quality, dissatisfaction will arise.

The relationship between service quality and satisfaction with insurance services:

- When consumers feel satisfied:

+ Continue shopping

+ Positive word of mouth

- When consumers feel dissatisfied

+ No reaction: consumers do not express their feelings

+ Do not continue to buy

+ Negative word of mouth

Expected quality

Needs met

Quality of service

Perceived quality

No need

be met

Satisfaction

Expected quality

Figure 1.4. The relationship between service quality and customer satisfaction

(Source: Spreng and Mackoy, 1996)

1.2. Practical basis of the research problem

1.2.1. Research on customer satisfaction with service quality

Research model of customer satisfaction with insurance services at Bao Viet Life Quang Nam Company by Master Le Thi Kim Phuong (2014)

The model of Master Le Thi Kim Phuong proposes the following factors: Tangibility, service capacity, responsiveness, trust, empathy, insurance product quality, corporate image, and insurance premiums.

Tangibility

Image

business

Service capacity

Response

Trust

The Harmony

heart

Insurance premium

Sympathy

Quality of insurance products

Figure 1.5. Customer satisfaction research model