Striving to ensure beneficial equilibrium between supply and demand for their goods, experts in marketing and management focus on customers’ behavior and apply various methods to measure internal driving forces of purchasing decisions. The measurement of customer satisfaction and evaluation of customer-perceived value are the two basic measurement models that allow anticipating customers’ loyalty and preferences. However, Swaddling and Miller (2002) state that measurements of customer-perceived value provide results that are more appropriate for marketing planning. By referring to the article “Don’t Measure Customer Satisfaction” written by Swaddling and Miller (2002), this paper will discuss which of the approaches is more valid and relevant.
Customer satisfaction is a parameter that represents how acquired goods and services meet customers’ expectations (Jiang, Jun, & Yang, 2016). Although the measurement of customer satisfaction provides information that is useful for improving marketing or production processes (Swaddling & Miller, 2002, p. 64), this analytical tool entails some limitations. Specifically, Swaddling and Miller (2002) emphasize several weaknesses of customer satisfaction measurements as follows: 1) prospective customers are not included in the evaluation process; 2) previous experiences are only measured; 3) product or service features are assessed instead of their benefits (p. 63). Thus, customer satisfaction measurements allow “determining the customer’s reactions to a specific event or experience” (Swaddling & Miller, 2002, p. 63), but they neither provide holistic insight into potential purchasing decisions nor predict customer loyalty. Customer loyalty implies buyers’ intentions to make repeat purchases and their willingness to acquire goods in case of a price increase.
Excessive reliance on the measurement of customer satisfaction is rooted in the belief that a satisfied client will necessarily become a loyal customer. This misconception encompasses suggestions that a satisfied customer will make purchases again and recommend products and services to other potential customers. However, a high level of satisfaction does not guarantee that clients will make repeat purchases. Conversely, buyers with a low level of satisfaction can remain loyal due to their inertia, lack of experience in using other products or services, insufficient information about available offerings, convenient location of facilities, and so forth.
Recent marketing-oriented research studies identify customer-perceived value (CPV) as a major predictor of customer loyalty (Swaddling & Miller, 2002; Jiang et al., 2016). According to Swaddling and Miller (2002), simultaneous involvement of buyers with past purchasing experiences and prospective customers in the evaluation process ensures results that are more accurate in comparison with those obtained via customer satisfaction measurements. Acquiring products, a consumer hopes to get a great number of advantages whose expected value exceeds costs spent on obtaining them. While applying CPV measurement, a researcher clarifies customers’ perceptions associated with the future value of goods or services (Swaddling & Miller, 2002). Thus, this approach allows anticipating customer loyalty.
CPV cannot be considered as a one-dimension construct. Analyzing the structure of CPV, Swaddling and Miller (2002) distinguish the following components: “attributes, relative importance and relative performance” (p. 65). Attributes are various factors and qualities used by potential customers to compare product offerings, including benefits, the comfort of purchasing, costs, the brand image, and so forth. In CPV, the relative importance is the selection between derived importance and stated importance (Swaddling & Miller, 2002, p. 66); its identification requires the use of statistical methods. The measurement of the relative performance is grounded on conscious comparison and rating of CP attributes by a prospective customer.
Summing up, the CPV construct is the most important determinant of consumer behavior. It plays a decisive role in the choice of goods, brands, suppliers, place of purchasing, and so forth. The CPV measurement allows managers and marketing professionals to understand consumers’ preferences and predict their purchasing decisions and loyalty.
References
Jiang, L., Jun, M., & Yang, Z. (2016). Customer-perceived value and loyalty: How do key service quality dimensions matter in the context of B2C e-commerce? Service Business, 10(2), 301-317.
Swaddling, D. C., & Miller, C. (2002). Don’t measure customer satisfaction. Quality Progress, 35(5), 62-67.