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More companies in the building sector are starting to realize the importance of using customer satisfaction as a tool to enhance their competitive advantage. Customer satisfaction brings several positive aspects to a company, which can contribute to a successful business. It is crucial to fulfilling customer’s wants and needs in order to obtain customer satisfaction.

‘The customer is always right’ is an old adage in the business world that is so much respected. Each decision made by the customer is always important and can affect, in any way, their current way of living. Customer satisfaction is, therefore, crucial for any company. It is hence essential to keep the customers satisfied by offering the right products that fulfill their expectations.

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Customer satisfaction

To understand the importance of customer satisfaction, consider these facts: customers with problems usually don’t react and only 4% of them complain; normally a person with problems tells 9 other people about it; while satisfied customers tell 5 other people about their good experiment; keeping a current customer costs about 1/7 of the cost of acquiring a new customer; retaining a current employee costs one-tenth of hiring and training a new one.

These facts; highlight the crucial role of satisfying customers which brings employee satisfaction; hence, the profit maximization of the company.

Therefore, organizations need to understand that to what extend their customers would be satisfied. Customer satisfaction in the marketing context has specific meanings: Anders Gustafsson, Michael D. Johnson, & Inger Roos (2005) brought customer satisfaction definition as customer’s overall evaluation of the date. This satisfaction has positive influences on retaining customers among the different variety of services and products. In service-based enterprises; service quality affects customer satisfaction.

Ingrid, (2004) interpreted satisfaction as a feeling which results from a process of evaluating what was received against that expected, the purchase decision itself, and/or the fulfil of needs/ want.

Satisfaction refers to achieving the things we want. If satisfaction interprets as “not going wrong” the firm should decrease complaint which by its own is not sufficient. In order to satisfy customers, company should improve its services and products. Figure 1 illustrates correlation between customers’ expectations and customer satisfaction. Customers with less expectation are more satisfied: companies by adding innovative features would easily increase customer satisfaction. In contrast, when customers are unaware of improvements but critical of losses in existing quality are less satisfied and expect more.

One of the main ingredients of success in the market place is customer satisfaction. Jochen Wirtz (2003) listed the results of customer satisfaction as follows: repeat purchase; loyalty; positive word-of-mouth and increased long term profitability.

Therefore, companies should measure their customers’ satisfaction to fortify their strengths and improve their weaknesses.

Customer relationship management

Customer relationship management, cubs relationship marketing or customer management. Comprises of the methodologies, strategies, software and other web based capabilities used to help an enterprise organize and manage customer relationships. The goal of customer relationship management is to aid organisations in better understanding each customer’s value to the company, while improving the efficiency and effectiveness of communication.

There are three major areas that focus on customer satisfaction: sales, marketing, and service. The functionality of and between these three fields is essential to successfully connecting a company's front and back offices to facilitate effective, enterprise-wide coordination. The professional sales force predicts and proposes the real-time analysis of information and distributes this information to the company and business partners. Marketing concentrates on personalizing customer preferences and offering them satisfying experiences. Service is associated with the companies' call centres and coordinates interaction between Web, e-mail, and other communication media. These fields are developed further with the help of CRM automation.

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Staff satisfaction & customer satisfaction:

To have the impact of the staff be strongly felt in the customer satisfaction the staff have to be satisfied in order to offer better services and products to the customers.

Numerous empirical studies show a strong positive relationship between staff satisfaction and customer satisfaction (e.g., Band, 1988; George, 1990; Reynierse & Harker, 1992; Schmitt & Allscheid, 1995; Schneider & Bowen, 1985; Schneider, White, & Paul, 1998; Schneider, Ashworth, Higgs, & Carr, 1996 Johnson, 1996; Ulrich, Halbrook, Meder, Stuchlik, & Thorpe, 1991; Wiley, 1991). As suggested by this wealth of findings, positive changes in staff attitudes lead to positive changes in customer satisfaction.

Some investigations have provided explicit measures of this relationship. For example, a study at Sears Roebuck & Co. showed that a five-point improvement in staff attitudes led to a 1.3 rise in customer satisfaction which, in turn, generated a 0.5 increase in revenues. Brooks (2000) reviewed the relationship between financial success and customer and staff variables (e.g., customer satisfaction, staff satisfaction, etc.) and found that, depending on market segment and industry, between 40 and 80 percent of customer satisfaction and customer loyalty was accounted for by the relationship between staff attitudes and customer-related variables.

Similarly, Vilares and Cohelo (2000) found that perceived staff satisfaction, perceived staff loyalty, and perceived staff commitment had a sizable impact on perceived product quality and on perceived service quality (see model below).

According to their model, staff satisfaction not only affects staff commitment and staff loyalty, but it also has a twofold impact (i.e., direct and indirect) on critical customer satisfaction-related variables.

This thesis narrows down the theoretical framework, uses and implications of relationship marketing and customer relationship management in general to the evaluation of the impact of the customer-employee relationship on customer satisfaction. It looks into customer-employee interaction and their impact on customer satisfaction. 

There are two principal interpretation of satisfaction within the literature of satisfaction as a process and satisfaction as an outcome ( Parker and Mathews, 2001). Early concepts of satisfaction research have typically defined satisfaction as a post choice evaluative judgement concerning a specific purchase decision (Oliver, 1980; Churchill and Suprenant, 1992; Bearden and Teel, 1983; Oliver and DeSarbo, 1998). The most widely accepted model, in which satisfaction is a function of disconfirmation, which in turn is a function of both expectations and performance ( Oliver, 1997). The disconfirmation paradigm in process theory provides the grounding for the vast majority of satisfaction studies and encompasses four constructs, expectations, performance, dis confirmation and satisfaction ( Caruana et al., 2000). This model suggests that the effect of expectations are primarily through disconfirmation, but they also have an effect through perceived performance, as many studies have found a direct effect of perceived performance on satisfaction ( Spreng and Page, 2001). Swan and Combs (1976) were among the first to argue that satisfaction is associated with performance that fulfils expectations, while dissatisfaction occurs when performance falls below expectations. In addition, Poisz and Von Grumbkow (1998) view satisfaction as a discrepancy between the observed and the desired. This is consistent with value-percept disparity theory ( Westbrook and Reilly, 1983) which was developed in response to the problem that consumers could be satisfied by aspects for which expectations never existed (Yi, 1990). The value-percept theory views satisfaction as an emotional response triggered by a cognitive-evaluative process (Parker and Mathews, 2001). In other words, it is the comparison of the “object” to one’s values rather than an expectation.

Customers want a meeting between their values (needs and wants) and the object of their evaluations ( Paker and Mathews, 2001). More recently, renewed attention has been focused on the nature of satisfaction, fulfilment and state ( Parker and Mathews, 2001). Consequently, recent literature adds to this perspective in two ways. First, although traditional models implicitly assume that customer satisfaction is essentially the result of cognitive processes, new conceptual developments suggests that affective processes may also contribute substantially to the explanation and prediction of customer satisfaction( Fornell and Wernerfelt, 1987; Westbrook, 1987; Westbrook and Oliver, 1991). Second, satisfaction should be viewed as a judgement based on the cumulative experience made with a certain product or service rather than transaction-specific phenomenon ( Wilton and Nicosia, 1986).

Customer satisfaction is defined as a customer’s overall evaluation of the performance of an offering to date. This overall satisfaction has a strong positive effect on customer loyalty intentions across a wide range of product and service categories ( Gustafsson, 2005).

Factors which determine the extent of expectations are: customer needs, total customer value and total customer cost. It is mentioned by researchers who study customer choice that choosing a product or service is only one of the stages customers go through. A purchase decision is influenced by the buyers’ characteristics. These include cultural, social, personal and psychological factors. In addition to the buyers’ characteristics, a purchase decision is influenced by the buyers decision process develops through five stages:

  1. New recognition;
  2. Information search
  3. Information evaluation
  4. Purchase decision
  5. Post-purchase evaluation (Chaston, 2001).

Mohamed Zairi (2000) developed the figure below which shows in order to have a continuous improvement of customer satisfaction there should be a cycle which starts with listening to voice of customers then analysing their comments, developing actions and at the end implementing

To have a thorough satisfaction firstly the good working condition is needed to bring satisfied staff which leads to loyal employees and by preparing all this, good production would be followed which influenced on Customer satisfaction and make them loyal and as mentioned before high profit is about customer retention.

The relationship between employee satisfaction and customer satisfaction has an empirical confirmation from two methodologically strong studies. Specifically, a recent meta-analytic investigation (Harter, Schmidt, & Hayes, 2002), based on 7,939 business units in 36 companies, found generalizable relationships, large enough to have substantial practical value, between unit-level staff satisfaction-engagement and business-unit outcomes such as customer satisfaction, productivity, profit, staff turnover, and accidents. Finally, Berhardt, Donthu, and Kennett (2000) measured the relationship between staff satisfaction, customer satisfaction, and profit longitudinally showing that, although the effects of employee satisfaction and customer satisfaction on business profit at a given point in time might not be detectable, they become visible and prominent over time. Specifically, these researchers found a positive relationship between change in customer satisfaction and change in profit/sales, a positive relationship between change in staff satisfaction and change in business profit, and a strong relationship between staff satisfaction and customer satisfaction at any point in time.

The literature offers several explanations as to why staff satisfaction affects customer satisfaction:

  1. Staff that interacts with customers are in a position to develop an awareness of and respond to customer goals and needs.
  2. Satisfied staff are motivated employees; that is, they have the motivational resources to deliver adequate effort and care.
  3. Satisfied staff are empowered employees; in other words, they have the resources, training, and responsibilities to understand and serve customer needs and demands.
  4. Satisfied staff have high energy and willingness to give good service: at a very minimum, they can deliver a more positive perception of the service/product provided.
  5. Satisfied staff can provide customers with interpersonal sensibility and social accounts (i.e., adequate explanations for undesirable outcomes). It has been suggested that these components of interactional justice (i.e., quality of interpersonal treatment provided in a negotiation/exchange) have a significant impact on customer satisfaction. According to this view, because satisfied staff experience interactional justice, they can deliver it; that is, satisfied staff have enough emotional resources to show empathy, understanding, respect, and concern.

Some researchers have focused on organizational antecedents of employee satisfaction and staff customer service. A model offered by Yoon, Hyun Seo, and Seog Yoon (2000) identifies three antecedents:

  1. Perceived organizational support (POS), that is, the extent to which staff perceives that the organization values their contributions and cares about their well-being.
  2. Perceived supervisory support (PSS), that is, the extent to which supervisors develop a climate of trust, helpfulness, and friendliness; high PSS implies that important socio-emotional resources are immediately available in the work environment.
  3. Customer participation, that is, the extent to which a customer is physically, mentally, and emotionally involved in the delivery of a service/product. At this level, both the resources/ information that customers bring into the transaction and the actual behaviors they engage in are important. 
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