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Customer satisfaction (CS) has attracted serious research attention in the recent past. This paper reviews the research on how to measure the level of CS, and classify research articles according to their approaches and methodologies. This paper also tries to supply some insights about the state of measuring CS in Vietnam. The main objective is to provide a conceptual basic to understand existing methodologies used for measuring CS. A total of 103 articles from more than 50 journals and international conferences are reviewed. A number of important methodologies used for measuring CS are defined and classified into two different approaches based on their nature. Another important contribution of this study is to suggest some criteria which should be considered to make CS measurement as a leading indicator of the financial performance. This paper can be helpful for managers to gain basic conceptual ideas of the methodologies used for measuring CS and also the criteria which make CS measurements more likely as a driver of financial performance when they are satisfied.
Proceedings of the 7th International Scientific Conference
Finance and Performance of Firms in Science, Education and Practice
- 1637 -
Vu Minh Ngo
Customer satisfaction (CS) has attracted serious research attention in the recent past. This
paper reviews the research on how to measure the level of CS, and classify research articles
according to their approaches and methodologies. This paper also tries to supply some
insights about the state of measuring CS in Vietnam. The main objective is to provide a
conceptual basic to understand existing methodologies used for measuring CS. A total of 103
articles from more than 50 journals and international conferences are reviewed. A number o f
important methodologies used for measuring CS are defined and classified into two different
approaches based on their nature. Another important contribution of this study is to suggest
some criteria which should be considered to make CS measurement as a leading indicator of
the financial performance. This paper can be helpful for managers to gain basic conceptual
ideas of the methodologies used for measuring CS and also the criteria which make CS
measurements more likely as a driver of financial performance when they are satisfied.
Keywords: Customer satisfaction, Measure customer satisfaction, Customer satisfaction
index/ measurements, SERVQUAL, National Customer satisfaction index
JEL Classification: C10, M30
In today market-oriented business environment, it can be said arguably that the question how
to satisfy customers becomes the ultimate concern of most of the companies in any kind of
business. Therefore, understanding customer satisfaction (CS) dimensions, measuring it and
taking advantage from these measurements become the urgent need for managers and
establish the mainstream in academic literature about CS in the recent past. CS is important to
measure because of its significant impacts on firms’ long-term performance and also customer
purchasing behaviors. In the academics, consistently providing high CS is well acknowledged
to be associated with higher customer loyalty and enhanced reputation (Fornell, 1992;
Anderson & Sullivan, 1993; Wangnheim & Bayon, 2004). Customer loyalty is considered as
the outcome of a process beginning with customer satisfaction (Oliver, 1999). There exist
definitely other factors other than customer satisfaction that form the customer loyalty and
retention such as personal determinism and social factors. But satisfaction is a necessary step
in loyalty formation (Oliver, 1999). CS can also supply a higher barrier against switching to
other competitors. Loss cost and move-in cost were positively significant related to the CS
(Kim, Park & Jeong 2004). Exploring the relationship between CS and the economic return is
also one of the most interesting topics. Anderson, Fornell and Lehmann (1994) attempted to
explore the relationship between CS and financial returns using a national customer
satisfaction index (NCSI) and ROI (return on investment). They found the significantly
positive association between ROI and CS but not immediately realized. Ittner and Larcker
(1998) found that CS is a leading indicator of customer purchasing behavior, growth in the
number of customers, and accounting performance. Banker, Potter and Srinivasan (2000) used
operating profits per available room to measure financial performance and verified its lead-lag
relation with CS for 18 hotels managed by a hotel corporation. However, there were also quite
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a few of studies found no positive relationship between CS and economic returns. Yu (2007)
found that “higher CS leads to higher customer revenue and higher customer costs at the same
time, and thus customer profits remain unaffected”. There is obviously a tradeoff and lead to
the question of probability. Thus, in order to achieve more practical implications, CS
measurements do not only need to respond to the evaluation of current situation but also being
a leading indicator for financial performance. The main objective of this study is to review
and provide the conceptual basics to understand the methodologies used for measuring CS.
Also, the article suggests ideas for making CS measurements to be leading indicators of
financial performance by undertaking a review of the literature in CS research. In addition, it
makes an attempt to get some insights about the state of measuring CS in the practice of
Vietnam market in particular.
The remainder of this paper is organized as follows. Section 2 discusses the methodology
used for reviewing in this paper. Section 3 is about the statistical and citation analysis of
selected articles. Section 4 provides the conceptual basic ideas about methodologies used for
measuring CS. Section 5 is about discussion, suggestion of criteria to make CS measurements
being leading indicators of financial performance and some insights about measuring CS in
Vietnam. Section 6 is conclusion.
2.1 Research agenda
The research agenda is about the methodology used for measuring customer satisfaction. The
search key for finding articles, books, and documents related to the research agenda are:
measure/develop customer satisfaction, customer satisfaction measurements, technique
for measuring customer satisfaction, customer satisfaction, and customer satisfaction
proxy/index/scale. The main aim of the research is to define the most popular methodologies
which are used to measure CS which are proposed and applied in the practice. These key
works help to identify the articles which are most likely to studies about measuring CS.
2.2 Literature search criteria
In search of relevant articles, the search will consist of journal articles with peer reviewed,
books, government publication, conference proceedings and other relevant work. The search
of literature will be conducted by using major multi-purpose databases such as Web of
Science (Thomson Reuters), ProQuest, Emerald, Science Direct and EBSCO. A search for
more articles using the same search key words will be conducted on the Internet using Google
Scholar in order to increase the coverage of the literature search. The search criterion for the
publication period is up to December 2014.
2.3 Literature search procedure
The initial searches revealed that a total 265 articles were found from various sources
included academic and professional journals, books and other publications. Then these
articles’ content would be analyzed for the relevance of method or proxy used for measuring
CS. When the articles were found to be relevant to the study agenda, they would be assessed
in more detail of its purposes, methodologies and findings. The citation criteria were applied
to get the articles which are most valuable to the research topic. Except the very recent articles
and books, the articles published more than 2 years and received less than 2 citations were
eliminated. After the analysis, 103 relevant articles and books were chosen.
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The literature searches from various sources produced 103 articles and books whose contents
substantially related to the topic of how to measure CS. The coverage of the selected articles
can be classified based on the methodology used for measuring CS. There are also some
articles cover related topics to CS included such as Halo effects, statistical techniques, etc.
Table 1 shows the numbers of articles writing about each methodology.
Tab.1 Number of articles for each methodology. Source: Own research
Number of articles
National Customer satisfaction index (NCSI)
Service quality (SERVQUAL)
MUSA method
Probit/Logit model
DEA method
Important Performance Analysis (IPA)
Cluster Analysis
Conceptual papers
Other methods
Other issues related to CS
These selected articles are from a wide spread of journals with more than 50 journals. The
journals with the high volume of selected articles as to measuring CS are Total Quality
Management, The Journal of Services Marketing, The Journal of Marketing, Expert Systems
with Applications, European Journal of Operational Research, International Journal of Bank
Marketing, and Managing Service Quality.
Except for newly published articles and books, all other articles were adequately cited, the
lowest being 2 citations as like the citation criteria. Table 2 shows the number of articles for
each interval of citation from the articles.
Tab. 2 Number of articles for each interval of citation. Source: Own research
Number of articles
> 100
50 -100
29 - 10
After undertaking a literature review, the most popular methodologies in measuring CS are
defined. The objective of this section is to provide the basic conceptual ideas about the most
popular methodologies.
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4.1 National Customer Satisfaction Index (NCSI)
Sweden has become the first country to establish a national economic indicator reflecting
customer satisfaction. Clases Fornell (1992) in the articles “A national Customer Satisfaction
Barometer: The Swedish Experience” proposed a method for measuring CS in more than 30
industries and for more than 100 corporations. After the first national customer satisfaction
was developed in Sweden, a number of both national and international customer satisfaction
barometers and indices have been introduced such as the American Customer Satisfaction
Index (ACSI) (Fornell, Johnson, Anderson, Cha & Bryant, 1996), European Customer
Satisfaction Index (ECSI), Norwegian Customer Satisfaction Barometers (NCSB)
(Andreassen & Lindestad, 1998), etc. The implementation of national customer satisfaction
indices seems to be suitable for a sustainable evaluation of the performance of companies in
an international context. (Grund & Bruhn, 2000)
In this methodology, Customer Satisfaction Index (CSI) represents its served market's - its
customers'- overall evaluation of total purchase and consumption experience, both actual and
anticipated (Fornell, 1992; Johnson & Fornell, 1991). Each version of NCSI can include some
modifications. But all of them are based on two fundamental properties. First, the
methodology must recognize that CSI is a customer evaluation that cannot be measured
directly. Second, as an overall measure of CS, CSI must be measured in a way that not only
accounts for consumption experience, but is also forward-looking (Anderson & Fornell,
2000). Therefore, it includes not just antecedents but also the consequences of overall CS.
The antecedents of CS is based on the expectation and disconfirmation paradigm which
suggest that the dispersal between expectation of performance and perceived performance can
determine customer satisfaction (Yi, 1990). These antecedents are usually performance
expectation of a product or service, the perceived performance and perceived value. The
consequences of overall customer satisfaction are the customer behaviors such as loyalty and
complaint (Fornell, 1992; Fornell, Johnson, Anderson, Cha & Bryant, 1996; Grund & Bruhn,
2000; Johnson, Gustafsson, Andreassen, Lervik & Cha, 2001; Anderson & Fornell, 2000).
These antecedents and consequences are latent variables which can be measured through
other manifest variable which related to them. Structural Equation Modelling (SEM) is
usually the technique for finding the CS level and validating the causal relationship between
CS and antecedents, consequences in this methodology. One of the most important
advantages of SEM is its capacity to study the relationships among latent constructs that are
indicated by multiple measures (Lei & Wu, 2007). In addition, SEM can provide separated
estimates of relations among latent constructs and their manifest variables (the measurement
model) and of the relations among constructs (the structural model) (Tomarke & Niels, 2005).
The goal of SEM is to determine whether a hypothesized theoretical model is consistent with
the data collected to reflect this theory.
4.2 Service quality (SERVQUAL)
The SERVQUAL method was suggested to evaluate CS by Parasuraman, Zeithaml, and Berry
(1988). Consequently, there have been several follow-up articles and studies about the
SERVQUAL method and its application. Research in service quality has also been conducted
within the framework of the expectation and disconfirmation paradigm. The central idea in
this model is that service quality is primarily a function of the difference scores or gaps
between expectations and perceptions (Jamali, 2007). The service quality research has been
dominated by the SERVQUAL instrument which is usually cluster in five group quality
determinants: Reliability, Responsiveness, Assurance, Empathy and Tangible (Parasuraman,
Zeithaml & Berry, 1985; Ghobadian, Speller & Jones, 1994; Curry & Herbert, 1998;
Wisniewski, 2001).
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However, there has been controversy in the service quality literature about the sequential
order of the two constructs: CS and service quality. While authors such as Dabholkar,
Shepherd and Thorpe (2000); Cronin, Brady and Hult (2000) regard perceived quality as an
antecedent to satisfaction, other authors (e.g. Parasuraman et al., 1988; Bitner, 1990),
however, consider CS as an antecedent to service quality. The majority of recent publications
(e.g. Yavas, Benkenstein, & Stuhldreier, 2004; Carrillat, Jaramillo, & Mulki, 2007; Jamali,
2007) consider service quality as an antecedent to CS. Thus, SERVQUAL can be used as a
methodology used for measuring CS. The objective of SERVQUAL methodology is usually
to develop the best instrument for measuring CS. The best instrument can be defined as the
best service quality constructs for predicting CS for a specific firm. Structural Modelling
Equation, Factor Analysis or Multiple Regression analysis are usually used for choosing and
validating the best service quality constructs among the proposed ones.
Various scholars however pointed out that SERVQUAL is not a generic measure that could
be applied to any service and that it needs to be customized to the specific service under
consideration (Carman, 1990; Babakus & Boller, 1992). Li, Riley, Lin and Qi (2006)
proposed five quality dimensions for comparing overall CS between two largest US parcel
delivery companies, the UPS and FedEx. They are availability, responsiveness, reliability,
completeness, and professionalism of service. Jamali (2007) proposed a conceptual model
which included not just basic service quality dimension but also others antecedents of CS
such as: Equity, Attributions, Cost/benefit analysis, Emotion,etc. Chadee and Mattsson (1996)
investigated the best attributes influence on the overall satisfaction of a quality dimension
during tourist encounters. The quality dimensions in the article were eating out, hotel
accommodation, renting a car and going on a sightseeing tour. Andaleeb and Conway (2006)
used factor analysis and regression model to find the impact of service quality determinants
on CS in the restaurant industry.
4.3 MUlticriteria Satisfaction Analysis (MUSA)
The MUSA method was first introduced by Grigoroudis and Siskos (2002). The main
objectives of MUSA method are: (1) supply the evaluation of customers’ satisfaction level,
both globally and partially for each of the characteristics of the provided service; (2) The
supply of a complete set of results that analyze in depth customers’ preferences and
expectations, and explain their satisfaction level; (3) The development of a decision tool with
emphasis on the understanding and the applicability of the provided results (Grigoroudis &
Siskos, 2002). The proposed MUSA method defines CS as the aggregation of individual
judgments into a collective value function assuming that client’s global satisfaction depends
on a set of n criteria or variables representing service characteristic dimensions. The required
data for the MUSA method is collected through a questionnaire through which the customers
are asked about their perception about the overall satisfaction (ܻ) and their satisfaction about
the set of pre-defined criteria (ܺ). The MUSA method follows the principles of ordinal
regression analysis under constrains (Grigoroudis & Siskos, 2002):
୧ୀଵ ; σ
୧ୀଵ = 1;
where, כand
כ, respectively, given customers’ judgments ܻ and ܺ ; is the weight of the
i-th criterion and the value functions כand
The main objective of the method is to achieve the maximum consistency between the value
functionכand the customers’ judgments Y. The result of MUSA method provide us the
weighting for each criteria, the value כ୫ for each m-th overall satisfaction level and the
כ୩ for k-th satisfaction level of criteria i. The main advantage of the MUSA method is
that it fully considers the qualitative form of customers’ judgments and preferences, as they
Proceedings of the 7th International Scientific Conference
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are expressed in a CS survey. The MUSA method avoids the arbitrary quantification of the
collected information, because the coding of the qualitative scale is a result, not an input to
the proposed methodology. This does not occur in a simple linear regression analysis
(Grigoroudis & Siskos, 2002). Moreover, the MUSA method result also offer complete
information set more than just only focused on the descriptive analysis of CS.
Arabatzis and Grigoroudis (2010) has been using MUSA method and related software for
identifying the factors affecting visitors' satisfaction level, as well as the critical points that
the management authority of the National Park must concentrate its improvement actions.
Ipsilandis, Samaras and Mplanas (2008) in their paper used MUSA method for analyzing the
satisfaction of project managers with respect to satisfaction criteria associated with four
dimensions: the project’s results, the operations of the programme organization, the support of
the project organization and the performance of the project team. Manolitzas, Grigoroudis and
Matsatsinis (2014) used multicriteria decision analysis to evaluate patient satisfaction in a
hospital emergency department through the application of MUSA method. They find that the
average level of complete satisfaction is low (73.4) indicating that the citizens are somehow
satisfied regarding the emergency department.
4.4 Ordered Probit and Ordered Logit model
Probit and Logit model are widely used in marketing and other fields such as artificial neural
networks, biology, medicine, economics, mathematical psychology (Grigoroudis & Siskos,
2010). The most advantage of Probit and Logit model is that they take the qualitative ordinal
characteristics of collected data into considers. In Probit and Logit model, the customers’
satisfaction levels are assumed to be dependent on set of independent variables which can be
illustrated as:
b ൅  ɂ
Where ɂare assumed independent and identically distributed random variables as usual,
the matrix of explanatory variables, b is the vector of coefficients to be estimated and
כ is
unobserved (Barboza & Roth, 2009). According to Greene (2003), what one observed is q
 ൌ Ͳכ ൑ Ͳ
ൌ ͳͲ ൏ כ ൑ Ɋ
ൌ Ɋ୨ିଵ ൑  כ
Where is customers’ satisfaction level; 0, 1, 2,…, j is the level of satisfaction; Ɋ୧are
unknown parameters to be estimated with b. It should be emphasized that the value 0, 1, 2,
…, j are simply coding and do not take quantify the variable. According to this explanation,
the probability that one customer has expressed for the m-th satisfaction level, given his/her
satisfaction judgments
( ሻ ሺ Ɋ୫ି ൏  כ ൑ Ɋሻ ൌ ሺɊെ
bሻ െ ሺɊ୫ିଵ െ  
Where ሺɊെ
bሻ and ሺɊ୫ିଵ
bሻ is the standard normal distribution function for
the Ordered Probit model and the standard logistic distribution for the Orederd Logit model.
The estimated vector of coefficients b can provide information about the effect of independent
variables on the probability that an overall satisfaction level can happen (Barboza & Roth,
2009). The orederd probit and ordered logit models provide the probability that each level of
overall satisfaction can happen with a specific sample of data. For example, Gan, Clemes,
Limsombunchai and Weng (2006) used logistic regression to identify that the factors which
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influenced the customer’s choice between electronic banking and non-electronic banking in
New Zealand are the service quality, perceived risk factors, user input factors, employment,
and education. In the same stream of research, Eboli and Mazzulla (2009) also used ordinal
logistic regression analysis to estimate the weight of the service aspects on the overall
satisfaction. The paper showed the valid of logistics regression analysis which can be applied
to the CS assessment process. The probit and logit model also can be used as the extension for
the SERVQUAL method. After using SERVQUAL method for identify and validate the
factors which affect to customer behavior. The logit and probit model can be used to rank the
factors with regard to their impact on customer behavior (Clemes, Gan & Zhang, 2010).
4.5 Other methods
Important-Performance Analysis (IPA). The importanceperformance analysis (IPA) is a
widely used analytical technique that yields prescriptions for the management of CS. IPA is a
two-dimensional grid based on customer-perceived importance of quality attributes and
attribute performance (Matzler, Bailom, Hinterhuber, Renzl, & Pichler, 2004). It provides an
attractive snapshot of the importance of a set of selected attributes in customers’ behaviour
processes and how well the products/services met consumer expectations. Thus, it can provide
a clear direction for a company’s future resource allocation decisions (Liu & Jang, 2009).
This approach assumes that attribute performance and attribute importance are two
independent variables (Matzler et al., 2004). Therefore, this approach can offer augmented
assessment for other methods in term of measuring CS after valid attributes are defined.
Liu and Jang (2009) used IPA method as a first step for identifying the effects of food,
service, atmospherics and other attributes on CS and behavioral intentions. Along with factor
analysis and multiple regressions, this study indicates that food quality, service reliability and
environmental cleanliness are three pivotal attributes to create satisfied customers and
positive post-dining behavioral intentions. Matzler, Sauerwein, and Heischmidt (2003) used a
revised model of IPA to investigate the asymmetric characteristics of impact of impact of the
different attributes on overall satisfaction. They found that four types of factors which are
basic factors, high performance factors, low performance factors, and excitement factors have
different importance characteristics if concerning two different context business of high and
low performance.
Cluster Analysis. The objective of Cluster analysis in dealing with CS is to identify Benefit
Segments of Customers. In other words, the method can identify different clusters of
customers who allocate importance to performance attributes in similar way within each
cluster and in different way comparing with others (Vavra, 1997). For example, in the
customer base, there might be a group of customers who might place a high importance on
after-sale service. Another group might accord higher importance to a wide array of features.
In Cluster analysis, you need to identify from previous literature the performance attribute and
collect customer judgments about the importance of these attributes. Andriotis,
Agiomirgianakis and Mihiotis (2008) used the framework included both factor analysis and
cluster analysis to identify the right factor which influence the satisfaction of tourists to the
island of Crete. The cluster analysis also produced three clusters: the “higher-satisfied”, “the
In-Betweener”, and the “Lower-Satisfied”. Bjertnaes, Skudal and Iversen (2013) used cluster
analysis to identify response clusters of patients, based on their responses to single items
about overall patient satisfaction, benefit of treatment and perception of malpractice. The
study identified five response clusters with distinct patient-reported outcome scores, in
addition to a heterogeneous outlier group with very poor scores across all outcomes.
Data Envelopment Analysis (DEA). The traditional DEA technique has long been utilized as
an invaluable tool in the field of operations research and management science to solve
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problems in wide range of industries as well as in not-for profit (Bayraktar, Tatoglu,
Turkyilmaz, Delen & Zaim, 2012). The DEA model measures the efficiency of any Decision
Making Unit (DMU) which is obtained as the maximum of a ratio of weighted outputs to
weighted inputs subject to the condition that the similar ratios for every DMU be less than or
equal to unity (Charnes, Cooper, & Rhodes, 1978). In DEA model for CS, a DMU is a
customer which expresses judgments. The inputs are usually the attributes of overall CS
which are pre-defined from the literature. The outputs are usually customer behaviors such as:
overall CS, customer loyalty, customer re-purchase intention, etc. DEA method respects and
takes into account the cause-effect relationship between inputs and outputs makes it suitable
for measuring the result of the company’s efforts to satisfy customers. DEA model provides
the efficiency score which express how efficient the attributes from products/services make
the customer satisfy comparing with other products or services. DEA can be used most
effectively for benchmarking to compare the satisfaction level between a group of companies.
Löthgren and Tambour (1999) used DEA network model to obtain measures of efficiency and
productivity that account for CS of Swedish pharmacies. Estimation results from the network
model and a direct productivity model (without CS) are compared and indicate that the
technical efficiency is lower under the network model. Bayraktar et al. (2012) used DEA for
analyzing and comparing CS and loyalty efficiency for mobile phone brands in an emerging
telecommunication market, Turkey. Drawing on the perceptual responses of 251 mobile
phone users, the DEA models reveal that from the top six mobile phone brands in Turkey,
Nokia features as the most efficient brand followed by LG and Sonny Ericsson in terms of CS
and loyalty.
There are still a lot of methods and models which can be useful for measuring CS. They are
not mentioned in detail in this study concerning the less popular of these methods for both
academic research and practical application in term of measuring CS. These methods can be
named such as: Descriptive Statistics, Discriminant analysis, Kano model, multiple
regressions, conjoint analysis, etc.
5.1 Different approaches
There are two approaches for measuring CS in the selected articles with respect to the
objective of the methodologies. The first approach is based on theoretical backgrounds to
propose the attributes which influence CS. Then it assumes that these pre-defined attributes
are the best for predicting CS. This approach pays much attention to the validation and
reliability of the model with the collected data. The most important result of this approach is
usually the current level of CS. In addition, the methodologies following this approach
usually supply more information which is useful for practical context. This approach is
standardized and has more comparative power across firms, industries or sectors. NCSI,
MUSA, DEA can be classified into this approach.
The second approach focuses on finding and testing the relationship between proposed
attributes and CS. This approach also based on the theoretical background to posit the
attributes which affect to CS. Then it will attempt to evaluate whether these attributes have
statistical significant relationship with CS. The most important result of this approach is the
set of attributes which are defined as the best ones for measuring CS. This approach usually
cannot estimate the current level of CS; however it can be used for developing an appropriate
instrument for assessing customer about their satisfaction. This approach can be very flexible.
Each firm, industry or sector has different attributes which are the most influencer to CS.
Therefore, this approach can be useful to investigate the CS for a specific business context
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when the comparison is not essential. SERVQUAL, Ordered Logit/Ordered Probit model,
IPA, Cluster analysis can be classified into this approach.
In sum, two different approaches for measuring CS can be seen from the selected articles. The
first approach is more completed and can be used as a standard for comparison. This approach
focuses on getting the overall level of CS. On the other hand, the second approach is more
flexible and should be used in specific business context when the attention of the manager is
more about finding what makes CS.
5.2 Suggested Criteria
The need of research on measuring CS as a leading indicator
Among the articles about measuring CS, there were just a few ones mentioned to the purpose
of measuring CS as a leading indicator for financial performance (Grigoroudis, Nikolopoulou
& Zopounidis, 2008; Fornell, 1992; Fornell et al., 1996). The main objective of the most
articles is to validate the relationship between service/product attributes and CS or customer
behaviors (Chen, Hsiao & Hwang, 2012; Grigoroudis & Siskos, 2002; etc.). The main themes
of the implications from these studies focus more on the management and marketing areas.
What can be derived from these articles is that they assume the methodologies can effectively
measure the CS index which can be served as a leading indicator of financial performance
though it was not directly stated in most of the articles. The articles about the relationship
between CS and financial performance also did not mention to the specific criteria for
measuring CS as leading indicator for financial performance (Fornell, Mithas, Morgerson &
Krishnan, 2006; Yu, 2007; mez, McLaughlin &Wittink, 2004). Ittner and Lacker (1998)
measured the relationship between CS with financial measures using different types of CS
measures. Although their study found that there was no significantly different result when
using different CS measures, it did not mention to the criteria for the matter of leading
indicator. This study also suggested doing further research on why there was unexpected
negative relationship between CS measures and financial measures in some industry which
can be caused by the problem of using unsuitable CS measures. For the practical implication,
CS measures require capacity to drive the financial performance. As a leading indicator for
financial performance, CS measurements should have a stable positive relationship with
financial performance. Therefore, there should be distinguished the measurement of current
CS level for management and marketing purpose and its role as a leading indicator for
financial performance. Thus, taking consideration of CS measurement as a leading indicator
of financial performance becomes a gap in CS research. This discussion pays more attention
to the suggestion of the idea of criteria for measuring CS measurement as a driver for
financial performance.
Suggested criteria
The financial measures for study. As mentioned in the introduction, the researches on the
consequence of CS are one of the most selected and concerned topics. One question raised
from the topic is about which financial measurements should be used for investigating the
leading effect of CS measures. The Service-Profit Chain (SPC) framework can be used to
shed some light on this issue. SPC is a framework for linking service operations, employee
assessments, and customer assessments to a firm's profitability (Kamakura, Mittal, de Rosa &
Mazzon, 2002). There are two different approaches to the financial measures to which the
SPC should aim. The first one is the original SPC framework which was proposed by Heskett,
Jones, Loveman, Sasser and Schelesinger (1994). This approach focuses on customer
retention and revenue. The first approach did not include the cost and investment to achieve
the better customer perception. On the other hand, the second approach- Return on Quality
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framework which was proposed by Rust, Anthony and Timothy (1995) takes into account the
cost and investment so that the focus is probability. It is assumed that the ultimate goal of any
firm towards to profitability. Hence, in order to make CS measurement as a leading indicator
for profitability, the employed methodology should consider the cost spent to achieve the
satisfaction of customer. Otherwise, the revenue-related financial measurements should be
used to study the economic return of CS measures. The further step can be taken to
investigate the profitability of CS index. Because all the aforementioned methodologies do
not take the cost for improving CS into account when measuring CS, it is more realistic to
study the relationship between revenue-related measures and CS measures from these
The overall CS. The overall CS should be used in any methodology if its role is a leading
indicator of financial performance. Overall CS reflects the cumulative evaluation of
customers’ experience with a firm. Compare to the transaction-specific satisfaction, overall
satisfaction is more consistent through time and includes the effect of more other factors for
example the past experience, the comparison with other competitors, etc. It also reduces the
influence of specific unusual event on the customers’ evaluation. So, this type of satisfaction
has more capacity to explain the customer post-purchased behaviors. Then in turn it has much
more directly influence on financial performance in comparison with transaction-specific
Forward looking. Forward looking means that CS measures should not only just measure the
customer’s past experience but need to have predictive capability as well. The predictive
power of CS measurements can be achieved by satisfying two conditions. The first condition
is that CS measures have stable positive relationship with financial measures. The second one
requests that it should lead or drive financial performance. The predictive capacity can be
gained through including the proxy of economic return such as customer retention and price
tolerance when measuring CS (Anderson & Fornell, 2000). In addition, the methodology for
measuring CS also needs to have causal relationship between antecedents and consequences
of CS. The reason for this criterion rises from the need that manager need to know both what
make customer satisfied and how CS level drives the customer behavior and then financial
Weighting criterion. According to this criterion, the factors which have more influence upon
the economic return should be realized and have more weight when calculating the final CS
level. It should be noticed that the methodology should focus on the factors which have
impacts on the economic return rather than just on the CS. If this weighting criterion cannot
be done, it is more likely that CS index only measures effectively the satisfied customers but
they are not willing to pay more. For example, Stauss and Neuhaus (1997) found that
customers who give equal satisfaction scores have different emotions towards the service
provider, different expectations concerning the service provider's future capabilities to
perform, and different behavioral intentions to maintain the relationship.
The Comparison Norm. Most of the aforementioned methodologies use the expectation-
disconfirmation paradigm for the background theory to investigate the CS. There is another
paradigm which can be used as substitution for it which is called Norm of Comparison
standard. The Norm standards refer to what "should be" the performance of the product,
whereas the predictive expectations in the basic confirmation paradigm mean what "will be"
the likely product performance (Yi, 1990). In order to link CS to customer retention which
then leads to economic return, the Competitor Norm Standard should be used. The
expectation do not count on the competitive feature which can cause customers who are
satisfied still move to competitors whose products or services are over current customers’
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expectation. The Competitor Norm Standard should be applied to measure CS level together
with the perceived value to get the real CS level which is more likely to lead to the customer
retention and economic return.
5.3 Measuring CS in Vietnam
This paper tries to make a small survey about the use of CS measures and how CS is applied
in Vietnam. The questionnaire used in the survey has two sections. The first section is about
how companies in Vietnam perceive the importance of CS measures in predicting financial
performance. The second focuses on how the CS measures are obtained from customers’
opinions. Online surveys were sent to 650 companies which are listed on the Ho Chi Minh
Stock Exchange and Hanoi Stock Exchange. 76 surveys were completed and collected for
further analysis. The response rate is 12% which is relative low but can be expected for the
online survey with no incentive included. The companies which participated in the survey
come from wide range of different industries. This reduces the bias which can be caused by
the individual characteristics of companies.
After analyzing the survey, the result shows that, most of the companies (65/76) agree that
non-financial measures and especially CS are important and very important to future financial
performance. But only about two-thirds in total 76 companies (51 companies) conduct the
survey about CS. However, the structures used in the survey for measuring CS by these
companies are mostly the simple versions which include only one or two questions about the
CS level from customers. As a result, all the companies which report having CS survey do not
use any sophisticated statistical methodology which are suggested in this paper. This can be
explained by the fact that measuring CS is the new concept in such an emerging market as
Vietnam. Vietnam started to open the economy with the aim of forming a liberalized
economy with fully competitive markets for just more than 20 years after a long time under
State Controlled economy. Therefore, just recently, the increasing highly competitive
environment in the economy has pushed firms toward customers-focused strategy and lead to
the concept of measuring CS. Another reason for not using sophisticated statistical
methodologies for measuring CS can also come from the fact t hat the companies do not know
and understand how they could be beneficial and how to use these methodologies. Being
asked about the willingness to use any sophisticated methodology, most of the companies
(56/76) answer that they might consider to use if they have chance to understand them
basically. So that this paper can be helpful to show corporate executives the conceptual basic
of the statistical methodologies for measuring CS in Vietnam.
In addition, the companies which conducts CS survey are usually belong to the business to
customers (B2C) sectors such as Consumer goods, Financial and Banking service and
transportation. The explanation for this can be that companies operated in business to business
(B2B) sectors do not have large customer base so that they can manage CS by individually
contacting with a particular customer. It is not true in B2C sectors in which companies have
to deal with thousands of customers per day. This difference in measuring CS in B2B and
B2C can be seen as an interesting topic for future studies.
In order to manage CS effectively, managers need to measure it. This study attempts to
review most of the popular methodologies for measuring CS such as NCSI, SERVQUAL,
MUSA, DEA, Ordered Probit and Ordered Logit model, etc. For practical application, CS
measurements should be used as a driver for financial performance. For this objective, this
paper attempts to suggest criteria which should be satisfied to make the CS measurements as
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leading indicator of financial performance. It also gives some insights about how companies
in Vietnam measure CS and raises the need for studies about the difference between
measuring CS in B2B and B2C companies. The limitation of this paper lies on the lack of
suggestion of methods to apply these criteria in methodologies for measuring CS which can
be a concern for further research on measuring CS.
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Contact information
Name of the author: Ing. Vu Minh Ngo
Affiliation (University): Tomas Bata University in Zlín, Faculty of Management and
Address: Mostní 5139, 760 01 Zlín, Czech Republic.
A survey about measuring customer satisfaction in Vietnam
This survey serves for the educational purpose only - No detailed company profile is needed
and revealed
Which sectors is your company operating?
1. Business to Business
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2. Business to Customers
3. Service
4. Manufacturing
5. Finance and Banking
6. Healthcare
7. Real Estate
8. Mining
9. Other:
Section 1:
Perception of companies about customer satisfaction
Question 1: How is the non-financial measures important to your company in term of
pursuing long-term profitable objective?
1. Very important
2. Important
3. Somehow important
4. Not so important
5. Not important at all
Question 2: Which are the following non-financial measures which your company
choose to include in your performance system?
1. Employee satisfaction/survey
2. Productivity of employees
3. Customer satisfaction/survey
4. Staff turnover
5. New idea implementation
6. Hours of training
7. Delivery time
8. Number of complaints
9. Other:
Question 3: How are customer satisfaction measures important to your company in term
of pursuing long-term profitable objective?
1. Very important
2. Important
3. Somehow important
4. Not so important
5. Not important at all
Section 2
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The implementation of measuring customer satisfaction
Question 1: Has your company already measured customer satisfaction?
If Yes go to Question 2 and Question 3. If No go to Question 4. Question 5 is for all
Question 2: Which kind of survey has your company used to measured customer
1. Survey with one question about customer satisfaction
2. Survey with set of questions not only about customer satisfaction but also the drivers
of customer satisfaction.
3. Other: ….
Question 3: Has your company used any of following methodology to measure customer
1. National Customer Satisfaction Index
2. Service quality (SERVQUAL)
3. MUlticriteria Satisfaction Analysis (MUSA)
4. Ordered Probit and Ordered Logit model
5. Important-Performance Analysis (IPA)
6. Cluster Analysis
7. Data Envelopment Analysis (DEA)
8. We do not use any one of them
9. Other: …..
Question 4: Does your company have project of measuring customer satisfaction in the
near future?
Question 5: If your company has not used any sophisticated statistical methodology,
would your company consider to use them for measuring customer satisfaction?
1. Yes, we are going to use them
2. Yes, if we can understand them basically
3. Yes, if others companies also use them
4. Yes, but we have to outsource it for other parties
5. No, we find our current methodology adequate
6. No, we do not need measure customer satisfaction
7. Other: ...
... Preferensi atlet OKU selatan terhadap cita rasa olahan ikan mujair dalam penelitian ini dikaji menggunakan uji C-Sat. Uji C-Sat dipilih karena menurut Ngo (2015) uji ini berfokus pada kepuasan pelanggan, dalam penelitian ini atlet. C-Sat (Customer Satisfication Ratings) adalah istilah yang mencakup berbagai survey dan pertanyaan umpan balik; C-Sat dirancang untuk mengukur seberapa senang/suka/puas seseorang terhadap produk yang ada. ...
... C-Sat dihitung dengan menghitung rata-rata nilai suka atau tidak suka dari suatu penilaian. Berikut adalah rumus perhitungan C-Sat menurut Ngo (2015) C-Sat Average = [(1*n1)+(2*n2)+(3*n3)+(4*n4)+(5*n5)+(6*n6)+(7*n7)+(8*n8)+(9*n9)+(10*n10) ]/n Sangat Tidak Suka ...
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Tilapia is one of the fresh water fish, and one of commodites that was cultivated by OKU Selatan specialy Ranau lake. Around the Ranau lake, tilapia usually was processed to grilled tilapia fish, turmeric seasoning, pindang Palembang and fried fish. The tilapia products had off-falvour so OKU Selatan athete ate other food like fried rice, fried chicken and tempeh, soto, instan noodles and etc. The aims for this research was to identified preference of OKU Selatan athlete to tilapia product, and analyzied flavor preference of OKU Selatan athlete based on five senses and cooking method. The data was calculated by C-Sat (Customer Satisfication). The results showed that the highest preference of OKU Selatan athelete to tilapia product at grilled tilapia such as 6.4 point and the lowest preference at Pindang such as 4.8 point. The highest preference of OKU Selatan to sensation taste at umami such as 9.9 point and the lowest at the bitter taste such as 1.5 point. The highest prefence of OKU Selatan to tilapia taste due processing at fried tilapia processed such as 9.8 point and the lowest at boiled tilapia processed such as 5.2 point. Athelete of OKU Selatan most prefer to tilapia that has umami sensation by fryied processed. Keywords : flavor, OKU Selatan athlete, tilapia product, C-Sat
... Customer satisfaction is very important for most firms in today's marketing environment where customer must be the focal point of every product activity; therefore, understanding the factors that bring about customer satisfaction must be taken advantage of. In addition to the foregoing, measuring customer satisfaction has become an urgent need for managers, and this has established the mainstream in academic literature about customer satisfaction in the recent past (Vu Minh, 2018). Gunning (2000) posits that customer satisfaction does not have a universal definition; but then, it is generally described in terms of an evaluative, affective or emotional response. ...
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... "Kepuasan pelanggan merupakan poin penting sebagai pengukur kinerja perusahaan dalam jangka panjang dan pengukuran perilaku pembeliaan konsumen" (Ngo, 2015). Setiawan, Qomariah dan Hermawan (2019) melakukan penelitian terkait dengan kualitas pelayanan dan kepuasan pada PT yang bergerak sebagai distributtor suatu produk diperoleh hasil bahwa kualitias pelayanan berpengaruh terhadap kepuasan konsumen sebesar 59,2%. ...
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... Dikatakan juga oleh Dewi dan Setyarini (2020), ketersediaan lahan parkir yang efektif sangat diperlukan untuk menghindari terjadinya penumpukan pengunjung sehingga dapat menimbulkan rasa ketidakpuasan terhadap fasilitas parkir. Dikatakan juga oleh (Ngo, 2018) bahwa kepuasan pelanggan yang lebih tinggi memberi keuntungan yang lebih tinggi terhadap fungsi dari gedung, hal tersebut dikarenakan kepuasan pelanggan menentukan keberhasilan dan kegagalan suatu manajemen gedung. Menurut Ilosa, et al. (2016), dalam usaha menangani masalah tersebut, maka diperlukan pengadaan lahan parkir yang cukup dan penentuan bentuk permodelan parkir yang tepat, dimana kebutuhan akan lahan parkir (demand) dan prasarana yang dibutuhkan (supply) haruslah seimbang dan disesuaikan dengan karakteristik perparkiran. ...
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Airport parking became one of the most serious problems due to the high usage of private vehicles in airport activities. This has made a demand for parking facilities to provide a better service. There are several parameters that was the foundation of this research. For the Customer Satisfaction Index (CSI), the result shows that the user was very satisfied with the performance and facilities that was given by the airport authorities. Whereas the field observation result shows that there are several points that needed to be fixed such as pedestrian that supposed to accommodate the visually impaired persons, parking arrangements, trolley arrangements, etc. In this research, design will be made based on the recommendation that was given in research on the user feedback to the parking facilities in Halim Perdanakusuma airportPermasalahan parkir di Bandara diakibatkan oleh Sebagian besar calon penumpang menuju dan Kembali dari Bandara menggunakan kendaraan pribadi, yang mewajibkan pengelola parkir untuk dapat selalu memberkan pelayanan yang baik. Pada penelitian yang menjadi dasar dilaksanakannya Pengabdian Kepada Masyarakat ini, untuk kepuasan pengguna (CSI) diperoleh hasil bahwa pengguna merasa sangat puas terhadap kinerja dan fasilitas yang diberikan oleh pihak bandara. Sedangkan pada hasil dari metode observasi lapangan terdapat beberapa hal yang perlu diperbaiki antara lain pedestrian yang mengakomodasi para penyandang disabilitas tunanetra, pengaturan parkir, penataan troli dll. Pada pengabdian masyarakat ini akan membantu pihak pengelola membuat perancangan yang sesui dengan rekomendasi penanganan yang diperoleh dari pengguna terhadap fasilitas taman parkir di Bandara Halim Perdanakusuma.
... This research successfully demonstrated that customer satisfaction has a positive effect on word of mouth, meaning that the greater satisfaction felt by the customers will cause them to pass on their satisfaction by word of mouth and recommend the business to others. Ngo (2015) provided an explanation that customer satisfaction plays a major role in shaping customer loyalty, which is caused by the comfort that is generated. This finding indicates that customer satisfaction is one of the items that are able to encourage customers to be loyal to a company. ...
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This research examines the effect of service quality and customer satisfaction on word of mouth. We carried out a survey of our sample, which consisted of 303 respondents. This study provides empirical evidence that service quality has a significant positive effect on customer satisfaction, service quality also has a significant positive effect on word of mouth and customer satisfaction has a significant positive effect on word of mouth.
... This study contributes to the existing body of knowledge by developing an e-retail customer experience model that synthesizes concepts at the nexus of marketing and logistics. Customer satisfaction is one of the most studied concepts in marketing literature (Ngo 2015) and is at the core of a retailer's success (Pappu and Quester 2006). The translation of customer satisfaction management into a practical dimension and the movement away from cost-based customer value creation has led to the development of several research streams that are linked to customer experience and its multilevel nature (Kranzbühler et al. 2018). ...
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For various industries worldwide, recent years have been defined by the remarkable growth of e-commerce. Enabled by the Internet, retailers can reach more customers, spread much further in the distribution chain, and optimize their resources. In the new market environment, customer experience has become a source of competitive advantage. This study investigates the role of last mile delivery in the customer’s e-retail experience. A quantitative methodology was used, which incorporated a survey that was conducted in Sweden and measured participants’ most recent e-retail experience. The results indicate that the last mile delivery experience mediates the relationship between the customer’s perception of the online shopping experience and customer satisfaction. These conclusions provide ground for further thorough investigations of the role of last mile delivery in the e-retail context and support e-retailers in increasing their customers’ satisfaction.
Social Customer Relationship Management (social CRM) has become one of the central points for many companies seeking to improve their customer experience. It comprises a set of processes that allows decision-makers to analyze customer data, in order to launch an efficient, customer-centric, and cost-effective marketing strategy. Nonetheless, the inclusion of social media data in CRM introduces new challenges, as it requires advanced analytical approaches to extract actionable insight from such a huge amount of data. Thus, in this paper, we propose a social CRM analytic framework, which includes various analytical approaches, aiming at improving customer retention, acquisition, and conversion. This framework has been tested on various datasets and extensively evaluated based on several performance metrics. The obtained results suggest that the proposed framework can effectively extract relevant information and support decision-making processes. From an academics perspective, the study contributes to an understanding of customers’ experiences throughout their engagement on social media and focuses on long-term relationships with customers. From a managerial perspective, companies should leverage the insight generated through every customer engagement on social media to drive effective marketing strategies.
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Users have a very important role in the service industry. If the users are satisfied with the service, then they will reuse it in the future. Conversely, if they feel dissatisfied, users will look for similar services from competitors. In this research, the case study is XYZ, one of online marketplaces that have begun to evolve in Indonesia. The research purpose was to measure e-service quality from the perception of users by using the Kano-IPA integration model. The research methodology used is by distributing questionnaires. Service attributes are based on the dimensions of E-Service quality; consisting Efficiency, Fulfilment, Reliability, Privacy, Responsiveness, Compensation and Contact. The number of service attributes designed is 28. Respondents are users of the XYZ in Cilegon. Importance Performance Analysis (IPA) is one of satisfaction analysis methods that is commonly used to map the level of satisfaction with the level of importance of service attributes. On the other hand, the Kano model classifies service attributes under the category of Must-Be, Performance, and Attractive. The results shown that the Compensation dimension still needed serious attention from the management. The highest level of satisfaction felt by service users was in the Privacy dimension.
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The scope of this study is to evaluate the level of patient satisfaction and to propose the solutions on how to increase the levels of satisfaction by using multicriteria analysis. A multicriteria user satisfaction analysis was used in order to measure the satisfaction and to elucidate the weak and strong points of satisfaction. The results of the questionnaire revealed that the average level of complete satisfaction is low (73.4) indicating that the citizens are somehow satisfied regarding the emergency department. Furthermore, the patients attributed great importance to the criteria of ‘processes involved in patient services’ and ‘courtesy, friendliness and professional attitude of the nurses’ in order to feel satisfied. The improvement diagram depicts that the first priority for the management committee of the hospital in order to enhance the level of satisfaction is to improve the service processes. It is obvious that the added values of the methodology are the action and improvement diagrams. By using these diagrams the management committee of the hospital can draw the future plans for improving the services of the emergency department.
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Based on theory from consumer behavior; cognitive psychology, and social cognitive psychology, this article explores the effect of corporate image in the formation of customer loyalty. Findings from the goods and service sector indicate that corporate image has a significant but indirect impact on customer loyalty. In conclusion, the authors claim that customer loyalty is driven both by disconfirmation of expectations and corporate image.
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Research in service quality has advanced substantially over recent years. However; little has been done in measuring the quality of tourist experiences and how different quality factors impact on global satisfaction of tourists. This paper sets out to fill this gap by modelling quality and satisfaction judgements of college students within four distinct tourist encounters. Applying a novel approach, respondents rated. an entire service setting by proxy when evaluating a picture in which certain quality variables had been manipulated. The findings from the regression models show that distinct quality factors are significant for different tourist encounters. In addition, significant differences were also found in the extent to which different quality factors affect students fiom different cultures. The results should be of value to managers in the relevant tourist industries.
Serves as a single reference for customer satisfaction measurement technology. This book describes and teaches the five critical skills that should be part of your measurement process: sampling and customer selection, questionnaire design, interviewing and survey administration, data analysis, and quality function action plans.
Many companies have been disappointed by a lack of results from their quality efforts. The financial benefits of quality, which had been assumed as a matter of faith in the ''religion of quality,'' are now being seriously questioned by cost-cutting executives, who cite the highly publicized financial failures of some companies prominent in the quality movement. In this increasingly results-oriented environment, managers must now justify their quality improvement efforts financially. The authors present the ''return on quality'' approach, which is based on the assumptions that (1) quality is an investment, (2) quality efforts must be financially accountable, (3) it is possible to spend too much on quality, and (4) not all quality expenditures are equally valid. The authors then provide a managerial framework that can be used to guide quality improvement efforts. This framework has several attractive features, including ensured managerial relevance and financial accountability.
Internet banking is one of the most important e-services in electronic commerce; however, the lack of standardised instrument for evaluating its satisfaction may inhibit the further development of Internet banking. This study aims to develop and validate a standardised measurement regarding customer satisfaction with Internet banking (IBCS). The development process included examinations of user satisfaction literature, expert panels, and pilot studies. Web survey was used for data collection, with subjects of Internet banking customers. The result was a parsimonious 18-item instrument with six subscales (content, accuracy, format, ease of use, timeliness, and safety) tapping into dimensions of IBCS. Further, this study not only affirms that all items in prior user satisfaction studies are still valid in the context of Internet banking, but also reveals that safety issues need to be addressed by banks to improve user satisfaction of Internet banking. Because of this rigorous and systematic study, researchers can use this valid measurement as a standardised instrument for measuring customer satisfaction of Internet banking.
In exemplary service organizations, executives understand that they need to put customers and frontline workers at the center of their focus. Those managers heed the factors that drive profitability in this service paradigm: investment in people, technology that supports frontline workers, revamped recruiting and training practices, and compensation linked to performance. They also express a vision of leadership in somewhat unconventional terms, referring to an organization's "patina of spirituality" and the "importance of the mundane." In this article, Heskett, Jones, Loveman, Sasser, and Schtesinger take a close look at the links in the service-profit chain, which puts hard values on soft measures so that managers can calibrate the impact of employee satisfaction, loyalty, and productivity on the value of products and services delivered. Managers can then use this information to build customer satisfaction and loyalty and assess the corresponding impact on profitability and growth. Describing the links in the service-profit chain, the authors explain that profit and growth are stimulated by customer loyalty; loyalty is a direct result of customer satisfaction; satisfaction is largely influenced by the value of services provided to customers; value is created by satisfied, loyal, and productive employees; and employee satisfaction, in turn, results from high-quality support services and policies that enable employees to deliver results to customers. By completing the authors' service-profit chain audit, companies can determine not only what drives their profit but how they can sustain it in the long term.
The relationship between customer satisfaction and economic returns has received growing attention in the customer satisfaction literature. However, there has been limited work linking customer satisfaction to customer profitability. Specifically, most empirical studies conduct firm-wide or business-level tests, but few investigate if individual customers' satisfaction with products or services drives their purchase intentions and economic contributions to the firm. Using panel data from 36 retail branch banks managed by an international financial institution (RBANK), which consists of two customer satisfaction data-points over nine months and monthly-activity based customer profitability data, this study examines how individual customers' satisfaction impacts customer revenue, customer costs, and customer profitability. The results indicate that several dimensions of customer satisfaction are positively associated with individual customers' repurchase intentions and firm reputation. The effect of the responsiveness dimension dominates the effect of other dimensions in most tests. At RBANK, individual-level customer revenue and costs both increase as customer satisfaction improves, but no significant relation exists between customer satisfaction and customer profitability. These findings shed light on several management issues, such as market segmentation, customer retention, and the implementation of a balanced scorecard. Furthermore, this study highlights a way for managers to analyze customer value, which is beneficial for long-term customer relationship management.