MOD006060 Customer Service Management

Introduction

With growing time, business organisations perceived the significance of customer satisfaction, as it is easier and less costly to retain the existing customers by continuously satisfying their needs than trying to win new customers. This report discusses the interrelation between customer value, loyalty and satisfaction, and their co-dependency.

Discussion

Definitions

Integrating various interpretations of customer value, it can be said that it is the value that the customer finds in the offerings of the product and the price that he has to pay for it in relation to the satisfaction of its use (Martelo Landroguez, Barroso Castro & Cepeda-Carrión, 2013). Customer loyalty, on the other hand, is related to the retention of customers for a long period. When a customer continuous to purchase from a particular brand or company despite the fact that other brands or companies offer the same product in a lower price or with some added bonus, that customer is categorised as a loyal customer (Toufaily, Ricard & Perrien, 2013). The definition of customer satisfaction can be viewed as the relation between the performances of the products of the organisation and the needs and requirements of the customers (Orel & Kara, 2014).

Interrelation 

Customer value has a direct and positive relation to customer satisfaction. When a customer perceives value in a product, which means the customer finds the requirements in that product, and has to pay and expected amount for it, the customer become satisfied with that purchase. Customer satisfaction also has a positive effect on the customer loyalty (Lam et al., 2004). A satisfied customer become a repetitive buyer, in other words a loyal customer, of that product, and recommends it to other prospective customers. Hence, it can be said that customer satisfaction leads to customer loyalty.

Mediating Role of Customer Satisfaction

In order to satisfy the customer, the organisations need to offer products that have all the expected requirements and perform as anticipated by the customer while purchasing. Therefore, it can be said that a customer is satisfied when the perceived value of the product is aligned with the result of use. On the other hand, a customer would not purchase a product repetitively and become a loyal customer of a product or brand unless it does not fulfil all the requirements and the customer is satisfied with it (Caruana, 2002). Thereafter, in order to become a loyal customer, the customer has to be satisfied with product, which is possible only through meeting the customer value of the product. Concluding from the above discussion, it can be said that the customer satisfaction has a mediating roe between customer loyalty and value.

Conclusion

The above discussion explicitly indicates that the customer satisfaction plays a mediating role between customer value and customer loyalty. Customer value is the customer’s perception of the product, whether it satisfies all the needs and costs within affordable range, before purchase. Customer loyalty is the act of purchasing the same product repetitively or becoming a repetitive customer of a particular brand or company. Before becoming loyal, a customer has to be satisfied, and that can happen only when the product meets the customer value.

References

Caruana, A. (2002). Service loyalty: The effects of service quality and the mediating role of customer satisfaction. European journal of marketing, 36(7/8), 811-828.

Lam, S. Y., Shankar, V., Erramilli, M. K., & Murthy, B. (2004). Customer value, satisfaction, loyalty, and switching costs: an illustration from a business-to-business service context. Journal of the academy of marketing science, 32(3), 293-311.

Martelo Landroguez, S., Barroso Castro, C., & Cepeda-Carrión, G. (2013). Developing an integrated vision of customer value. Journal of Services Marketing, 27(3), 234-244.

Orel, F. D., & Kara, A. (2014). Supermarket self-checkout service quality, customer satisfaction, and loyalty: Empirical evidence from an emerging market. Journal of Retailing and Consumer Services, 21(2), 118-129.

Toufaily, E., Ricard, L., & Perrien, J. (2013). Customer loyalty to a commercial website: Descriptive meta-analysis of the empirical literature and proposal of an integrative model. Journal of Business Research, 66(9), 1436-1447.