The evolution and future of national customer satisfaction index models

Abstract

A number of both national and international customer satisfaction barometers or indices have been introduced in the last decade. For the most part, these satisfaction indices are embedded within a system of cause and effect relationships or satisfaction model. Yet there has been little in the way of model development. Of critical importance to the validity and reliability of such indices is that the models and methods used to measure customer satisfaction and related constructs continue to learn, adapt and improve over time. The primary goal of this research is to propose and test a number of modifications and improvements to the national index models. Using survey data from the Norwegian Customer Satisfaction Barometer (NCSB), we find general support for the proposed modifications.

Introduction

Customer satisfaction has taken on national and international significance with the development of national satisfaction barometers and indices in Sweden (Fornell, 1992), the US (Fornell, Johnson, Anderson, Cha, & Bryant, 1996) and Norway (Andreassen & Lindestad, 1998a). Indices have also been pilot tested in New Zealand, Austria, Korea and the European Union. It remains to be seen whether these indices will develop on a global level and, importantly, in what form. Of critical importance to the validity and reliability of such indices is that the models and methods used to measure customer satisfaction and related constructs continue to learn, adapt, and improve over time.

The goal of this research is to facilitate this learning, adaptation and improvement process. As a consequence of this work and in keeping with current return on quality research (Rust, Zahorik, & Keiningham, 1995) we position customer loyalty as the key dependent variable in the model. We begin by describing customer satisfaction from an economic psychology perspective. We then describe the evolution of national satisfaction index models, including details of the models currently used in Sweden, the US, Norway and the EU. (Not included in our discussion is the Deutsche Kundenbarometer (Meyer, 1994) as it does not involve either an index or model per se.) Both the strengths and weaknesses inherent in the current approaches are discussed. We then propose a series of modifications and improvements for measuring and modeling customer satisfaction that are now incorporated into the Norwegian Customer Satisfaction Barometer (NCSB) model. The modifications are tested using data from five service industries.

Customer satisfaction research has developed around two different types of evaluations: transaction-specific satisfaction and cumulative satisfaction (Johnson, Anderson, & Fornell, 1995). The original interest in marketing and consumer research was on transaction-specific satisfaction, or a customer's experience with a product episode or service encounter (Yi, 1991). More recent transaction-specific research has focused on the relationship between perceived quality and satisfaction (De Ruyter, Bloemer, & Peeters, 1997) and the role of emotions in satisfaction evaluations (Oliver, 1993).

A more economic psychology-based approach to satisfaction has grown and gained acceptance over the last decade, termed cumulative satisfaction. This approach defines satisfaction as a customer's overall experience to date with a product or service provider (Johnson & Fornell, 1991). This definition is consistent with those in both economic psychology (W$\text{a}\text{̈}$rneryd, 1988) and welfare economics (Simon, 1974) where customer satisfaction is synonymous with the concept of consumption utility. An important advantage of the cumulative satisfaction construct over a more transaction-specific view is that it is better able to predict subsequent behaviors and economic performance (Fornell et al., 1996, Johnson et al., 1995). This is because customers make repurchase evaluations and decisions based on their purchase and consumption experience to date, not just a particular transaction or episode.

Viewing satisfaction as a form of consumption utility is also consistent with Poiesz and von Grumbkow's (1988) general framework for understanding economic “well being”. This framework views economic well being as one component of an individual's overall quality of life. Other domains include evaluations of health, socio-cultural context, political freedom and stability. Economic well-being is itself composed of three sub-components, job satisfaction, income evaluation, and consumer or customer satisfaction. At an aggregate level, Poiesz and von Grumbkow equate this customer satisfaction with customer welfare. It is this welfare-based or cumulative view of satisfaction upon which the prominent national satisfaction indices are built.