Journal of Marketing Management, 1995, 11, 817-834

Nigel F. Piercy^ and Neil A. Morgan^

^ Cardiff Business School, and ^University of Cambridge, UK

Customer Satisfaction Measurement and Management: A Processual Analysis

Customer satisfaction (CS) measurement has been widely advocated as central to the pursuit of market orientation, total quaUty management, and competitive advantage by allowing management to monitor and improve performance in the terms most significant to customers. However, relatively little analytical attention has been devoted to the processual issues implicit in the adoption of CS measurement systems by organizations. This paper presents executive workshop data and new survey evidence to support the contention that both research and managerial agenda should be extended to recognize the multi-dimensionality of organizational process, and the implications of that charatteristicfor the adoption and use of CS measurement systems.

Introduction The achievement of market orientadon by organizadons remains one of the basic tenets of the conventioneil prescripdve Uterature (e.g. Koder 1994), and has provided the focus for infiuendal recent enquiries and conceptual developments (KohU and Jaworski 1990; Narver and Slater 1990). This concem is emphasized by the development of reladonship marketing strategies (e.g. McKenna 1991; Christopher et al. 1992) and the move away from whoUy transacdon-based markedng (Webster 1992). To varying degrees of expUdtness, such prescripdve and analytical treatments of market orientadon and reladonship marketing share a focus on customer satisfacdon as a central component of marketing effecdveness and corporate performance. Similarly, memy of the daims for the advantage derivable from Total QuaUty Management rest on achieving a focus on customer sadsfacdon (e.g. Crosby 1979; Garvin 1988; Morgan and Piercy 1995). Indeed, customer sadsfacdon focus is also central to many general management writers (e.g. E>rucker 1958; Day 1990; Johnson and Scholes 1992) as weU as the "exceUence" school (e.g. Peters and Waterman 1982; Peters and Austin 1985), and those studying the formation of networked marketing organizadons and strategic aUiances (Webster 1992; Piercy and Cravens 1995). One famiUar manifestadon of this widespread concem with customer satisfacdon as a test of market orientadon and organizadonal effecdveness has been the widespread advocacy of customer satisfacdon measurement (CSM) systems, leading to the capture and dissemination of such measurements as a basis for marketing control (e.g. Bearden and Teal 1983; Band 1988). Such views are commonly found in both the techniccd normadve Uterature and the popular management prescriptions (e.g. Peters and Austin 1985; Peters 1988), and convendonal logic suggests that 0267-257X/95/080817 + 18 $12.00/0 1995 The Dryden Press

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Nigel F. Piercy and Neil A. Morgan

compeddve advantage is attainable through such management efforts to insdtudonaUze meirket orientadon (e.g. Day 1990). Correspondingly, a large amount of technical and analytical effort has been devoted to such issues as: conceptualizing different customer sadsfacdon constmcts (Churchill and Suprenant 1982; Tse and Wilton 1988; Griffin and Hauser 1992); designing effective customer sadsfacdon data collecdon systems (VWlson and Nicosia 1986; McQuance and Mclntyre 1992); insdtudonalizing the customer satisfacdon measurement process (Lele and Sheth 1988; Powell 1988); and, analysing and respionding to customer dissatisfaction and complaining behaviour (e.g. Richins 1983, 1987). However, very Uttle attention has been given to the actual or potendal impad of CSM systems on the orgardzadon itself, other than the largely untested asserdon that the "happy employee" leads to the "happy customer" (e.g. Berry 1981; Gale 1992). This asserdon negleds, in particular, the possibiUty that a trade-off exists between employee and customer interests, and that CSM may itself have adverse effeds on the "corporate environment" (Piercy 1985), or the "intemal market" represented by the orgardzadon itself (Piercy 1992, 1995). In short, there appears generally to have been Uttle recognidon of the impad of the processual charaderisdcs and structural issues surrounding the implementadon and utilization of CMS approaches. It is certainly true that attention has been paid to the implementation of CSM systems themselves, but a processual analysis suggests that the more apposite issue is the ptosidve, negadve, or ambivalent impad of CSM on the implementadon of market orientation and market strategies, rather than the implementadon of CSM systems as such. This paper discusses some exploratory evidence from management workshops, and the processual analytic model currently being evaluated in survey and case study research into CSM systems and other aspeds of marketing control. Some survey findings are presented, examining the managerial use of CS measurements, their impad on market strategy, and the intervening effed of intemal processual barriers. The findings presented have a number of impUcadons for both management practice and for further research in this area.

Exploratory Evidence One preliminary source of insight into the CSM issue has been discussions held informally with a variety of executive groups in workshops and similar venues. This "grounded" approach to generating theory (Glaser and Strauss 1967) has been a fruitful stage in the research process in other areas of market orientadon research (e.g. KohU and Jaworski 1990). The approach also has attracdon in terms of the continuing "relevancy" debate among marketing academics and practidoners. These exploratory discussions suggested a number of areas for further investigadon, linked by a focus on the process of CSM and its use by management, rather than on purely technical issues of measurement and data coUection. ITie execudve views have been grouped around a number of themes concerned with the reasons why CSM is not used in some organizations, and the problems with CSM in those organizations where attempts have been made to implement such

Consumer Satisjaction Measurement and Management

819

systems. Prime among the areas uncovered by the exploratory discussions with execudves were the following:

Companies Who Do Not Measure Customer Satisfaction

Many execudve comments related to the pracdcal problems of customer identificadon, sadsfacdon construct definidon, emd data coUecdon. Others related to a lack of convicdon that CSM would add anything useful to exisdng knowledge of customers and a beUef that CSM would itself sdmiilate customer complaints where there were none before. Yet others saw CSM as simply "not how we run things in this company".

Companies Who Trivialize CSM

Many execudves in companies pursuing CSM poUdes describe this as a superfidal or tacdcal issue, sigruficant only at the customer service level in "massaging" customers and deaUng with complaints. The suggestion is that CSM forms no part of developing market sfrategies, only in monitoring customer service op>eradons, and responding (sometimes quite dispropwrdonately and inappropriately) to negadve feedback.

CSM in Interdepartmental Power Struggles

Some execudves describe CSM as a weapon used in the power struggles between funcdonal areas, in attempts to "prove" to management the inadequades of othersfor example, in the "battle" between Marketing and Opieradons.

The Politics of CSM

Others describe the gaming behaviour of company persormel to "beat" the system, and to avoid being "blamed" for customer complaints, in ways not anddpated by management, and certainly not suppmrdve to customer sadsfacdon poUdes and markedng sfrategiesfor example, sales and distribudon pwrsonnel making price and service discount concessions to customers simply to win "brownie p>oints" in the CS quesdonnaire.

CSM as a Management Weapon

Some saw CSM in a whoHy negadve way as a crude control device with coerdve overtones, used by management to "poUce" lower levels of the organizadonfor example, to "blame" p>oint-of-sale op)eradves for low customer satisfacdon.

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Nigel F. Piercy and Neil A. Morgan

The Isolation of CSM

It was not uncommon for CSM output to be coUeded and stored, but not disseminated through the organization for example, evidenced in one company by CS data being held by Marketing and not shared with the QuaUty Department.

Poorly Diffused CSM

Some described situations of internal discord, where the perception of CSM and its gocds and effectiveness differed radicaUy between different parts of the organization for example, shown in one company by distributors completing CS questionnaires themselves, because they did not see the point of the exerdse and did not want to "bother" end-user customers. It is clearly not sensible to suggest any general representativeness or vaUdity for such exploratory discussions with executives, for many obvious reasons. Nonetheless, there is some suggestion of dysfunction in the adoption and utilization of CSM which does not simply reflect diredly the technical robustness and sophistication of the measurement systems themselves.

A Processuai Analysis of CSM Further analysis of this issue adopts the simplified model of process developed in earUer studies of marketing planning (Piercy and Morgan 1994) and resource aUocation in marketing (Piercy 1987fl, 1987b, 1994). This model is summarized in Figure 1 and proposes that process should be studied as a multi-dimensional phenomenon, recogni2ung an analytical dimension of technique, procedure and system, but also a behavioural dimension concemed with attitudes, perceptions and motivation of the jDeople involved, and an organizational dimension concemed with management styles, corporate culture, stmcture and information fiows, i.e. the context in which the formal system operates. The underlying proposal is that greater insight into the operation of process is achieved through making expUdt these different aspeds of a process, and the largely ignored question of the consistency between them. This logic leads to the model of CSM shown in Figure 2. The logic is that in studying the adoption of CSM, in pursuit of market orientation and customer-based market strategies, the researdi and managerial agenda should extend beyond the analytical/technical dimension of the process and uncover the behavioural and organizational dimensions of the process. The hypothesis is that barriers to the effectiveness of CSM may be traced not merely to operational and resource issues but to managerial/poUtical questions and to cultural/structural barriers. The suggestion is that there are potentiaUy both positive and negative outcomes possible with CSM, with predictably positive or negative impacts on market strategy. An exploratory study examines the existence and impad of such processual barriers on the management use of CS measurements in dedsion-making and implementing market strategies.

Consumer Satisfaction Measurement and Management

821

Exploratory Empirical Study This paper reports certain findings of an exploratory survey completed in 1992, involving a postal questionnaire study of 300 medium and large UK manufacturing companies. The questionnaire items were generated from executive interviews and the sampling units were chief marketing executives. The sample was generated on a systematic random sampling basis from a company directory. The questiormaire was sent to 925 companies and usable responses were obtained from 299 companies, giving a response rate of 32%. Reasons for non-response were investigated with telephone interviewing to evaluate systematic differences between responding and non-responding companies. This testing suggested that the sample was biased towards those organizations which measured CS, since many companies not measuring CS were unwilling to partidpate in the study. The results below are drawn from the 200 responding companies which did measure CS. The hypotheses evaluated here are drawn from the model in Figure 2, and are concerned with the use of CS measurements in management dedsion-making and the relationship with market strategies, in the light of the intervening process characteristics which prevail. The logic of the various streams of prescriptive literature reviewed earlier suggests that CS is measured so that it may impact on dedsions made by managers. As suggested in Figure 2, if CS measurements are to have any real impact, the uses

Analytical dimension * Tfechniques

* Systems * Procedures * Formalization

J
Process consistency

en!)
XX < \ /)

Behavioural dimension Attitudes Beliefs * Participation * Commitment Or ganiz ational mmension Structure Management style Culture Information

^ ^

Figure 1. A model for analysing process in marketing.

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Nigei F. Piercy and Neil A. Morgan

CSM adoption/ implementation

Analytical dimension 1 Behavioural | 1 dimension ! . ^'rocess issues Process ODiisistency

y,
Organizational aimension

Positive effects on market strategy

Negative effects on market strategy

Figure 2. Conceptual model of customer satisfaction measurement process.

of the data should be refieded in the market strategies pursued. It is hypothesized: HI: The use of CS measurement data will be related to key elements of market strategy pursued by the company. However, our exploratory interviews and the model in Figure 2, also suggests that process barriers wiU intervene between the coUecdon of CS data and their use in management dedsion-making, and hence their impad on market strategies. It is hypothesized: H2: Intemal process barriers wiU be negadvely related to the use of CS data in management dedsion-making and their impad on market strategy.

Managerial Uses of CS Measurements

Table 1 shows the list of management dedsion-making areas where respondents were asked to evaluate the degree of use of CS data. These variables were fador analysed as shown to produce a fador structure suggesting use of CS data in: Quality/Operations Management, linking the use of CS data in morutoring quaUty and developing quaUty strategy and setting quality goals, guiding R & D and managing production and quaUty control; Staff Pay and Promotion, Unking the pajTnent and promotion of operational and managerial sta^ Staff Training and Evaluation, linking the training and evaluation of operational and managerial staff; and. Strategic Management Control, Unking the development of company-wide strategy, control of the business, and the management of customer service and marketing programmes.

Consumer Satisfaction Measurement and Management

823

Market Strategy Components

Table 2 shows a Ust of market strategy items, again generated from the execudve interviews, which was factor analysed to produce the foUowing structiire. The Service and Qi4ality factor linked goals of achieving the highest perceived quaUty in the market, providing exceUent customer service and achieving high buyer loyalty. The Competitive Differentiation fador links issues of managing distribudon networks, building brand image and differendadon by design and specificadons. The High Profit/Volume fador Unks gocds of sales growth, higher market share and improved profitability. The Low Price/Cost fador Unks strategic imperadves of being price compeddve and minimizing marketing costs.

Intemal Processual Barriers

Table 3 shows the question items relating to behavioural and organizadonal process charaderisdcs, as generated in the execudve interviews. These were evaluated by respondents In terms of the degree to which they were perceived to be problems in CS measurement. These items were fador analysed to produce the fador structure discussed below. The Intemal Politics, Market Simplification and Customer Fear fador grouped a number of issues together. First, there is a group of variables describing various
Table 1. Factor analysis* of the managerial uses of customer satisfaction measurement
Varittblest To what extent does the company use the results of CS measurement in making decisions in the following areas: V153 Monitoring quality performance V154 Developing our quedity strategy V152 Setting quality goals V151 Managing quality control V155 Guiding R & D investments V150 Maruiging production V139 Payment of operational staff V14fl Payment of managerial staff VI41 Promotion of operational staff V142 Promotion of managerial staff V143 Training operational staff V144 Training managerial staff V137 Evaluating performance of operational staff V138 Evaluating performance of managerial staff V146 Developing company-wide strategy V147 Developing marketing programmes V145 Controlling the business as a whole V148 Managing customer service operations
Factors f

I 0-88 0-85 0-84 0-82 0-64 046

4 Usel=Quality/operations management 0-34 031

086 085 068 064

Use2=Staff pay and promotion 0-52 0-50 0-79 074 0-64 064 0-87 Use4= Strategic 0-82 management control 064 0-50 102

Use3=Staff training and evaluation

844 2-70 134 Eigenvalues Cumulative pe2x:entage of variance explained 444 586 657 710 'Vaiimax rotation, converging in eight iterations; tLoadings less than 0 3 are suppressed; Measured on i 5-point scale where I="not used at all" and 5="the single most important input".

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Nigel F. Piercy and Neil A.

Morgan

Table 2. Variables}

Factor analysis* qf marketing strategy Fadorsf 1 2 O^ 0 73 0 63

components

The most important parts of our marketing strategy in this market: V212 Achieving the highest perceived quality in the market V210 Providing excellent customer service V208 Achieving buyer loyalty V214 Managing product distribution networics V213 Building brand image V211 Differentiating our product by design and specifications V215 Achieving sales growth V216 Building higher market share V217 Improving profitobility V209 Being price competitive V218 Minimizing marketing costs Eigenvalues Cumulative percentage of variance explained

4 Stratl=Service and quaUty

0-84 0 83 0 46 0-50 0-85 0 35 0 45 030

Strat2= Competitive differentiation

Strat3=High profit/ volume 0-79 Strat4=Low price/cost 0-72

324 29 4

146 42 7

122 53 8

102 630

Varimax rotation with Kaiser normalization, converging in six iterations; tLoadings less than 0 3 are suppressed; ^Measured on a 5-point scale where 1="completely unimportant" and 5="lughest possible priority".

dimensions of intemal pioUdcs: CS generates intemal confUct and poUdcal squabbles, CS provides a "hostage to fortune" and means increased management control, areas of customer complaint are poUdcaUy sensidve and CS undermines management, cind people cheat the system. Second, there are variables describing simpUfied assumptions about the market, which render CS unatfracdve: word-of-mouth recommendadon is beUeved unimportcuit, customer loyalty is thought non-existent, rep>eat sales do not matter, the company is not beUeved to be a service and quaUty player, the company cannot change, and people do not beUeve in CS meastirement. Third, related to this, are a set of variables describing fear of the customer and the customer's reacdon to CS measurement: customers think something is wrong (if asked about CS), asking customers quesdons wiU reduce CS, it wiU raise uru^aUsdc expectadons and invite unwelcome complaints, and CS is badly received by people in the company. The second factor is labeUed Corporate Culture. This Unks together such items as: a lack of maruigement support for CS measurement, a percepdon that CS measurement is not appropriate to the company or the market, a lack of attendon to the results, a lack of a customer service poUcy and a low priority for CS measurement. The third factor is Market Complacency. This Unks issues of beUef that the company already knows what matters in the market and what customers think, and that what matiers is having the best product, while CS is beUeved to be difficult and to invite unwarranted cridcism from customers. The Resources/Capability factor Unks issues of requirements in CS measurement for technical expertise, systems, people and time. The Logistics factor is concerned with the problems of identifying the customer suid whether CS measurement should be

Consumer Satisfaction Measurement and

Management

825
measurement

Table 5.
Variables^

Factor analysis* of internal processual barriers to customer satisfaction

Factors f

Problems with measuring CS: F4] In our company, people think 0 82 measuring CS is unproductive because it generates too much internal conflict F40 In our company, people think 0 78 measuring CS is improductive because it leads to political squabbles between departments F39 In this type of market, people 0-76 think measuring CS is a waste of time because word-of-mouth recommendations do not matter F47 In our company, people think 0-76 measuring CS is unproductive because it creates a "hostage to fortune" for the marketing department F32 hi this type of market, people 0-76 think measuring CS is a waste of time because asking customers about satisfaction makes them think something is Vk^rong F31 In this type of market, people 0 76 think measuring CS is a waste of time because it makes satisfied customers less satisfied F36 In this type of market, people 0-72 think measuring CS is a waste of time because they think that customer loyalty does not exist F33 In this type of market, people 0-72 think measuring CS is a waste of time because it raises customer expectations uniealisticaily F46 In our company, people think 0-72 measuring CS is unproductive because complaints and criticisms from outside are unwelcome F35 In this type of market, people think 0 72 measuring CS is a waste of time because people thirJc repeat sales are not vital F43 In our company, people think 0 71 measuring CS is unproductive because people just cheat the system to get "lwownie points" F42 In our company, people think 0-69 measuring CS is unproductive because people see it as increased management control F44 In our company, people think 0-69 measuring CS is unproductive because the things customers complain about are politically sensitive

8 politics, market simplification and customer fear

0-31

0-32

0-31

0-37

0-37

826 Table 3.
Variablest Problems with measuring CS:

Nigel F. Pittty and Neil A. Morgan Continued

Factorsf 1 2 0 51 3 4 5 6 7 8

F48 In our company, people think 0 62 measuring CS is unproductive because the people vi^ho run things here do not support it F23 In our company, problems in 0-59 measuring CS; it undermines management's "right to manage" F15 In our company, problems in 0-58 measuring CS: our employees do not like it F34 In this type of market, people think 0-58 measuring CS is a waste of time because people think we are not a service and quality player F24 In our company, problems in 0-56 measuring CS: people do not like the results F45 In our company, people thirJc 0-56 measuring CS is unproductive because people don't agree on what we should measure F30 In this type of market, people 0 50 think measuring CS is a waste of time because it just invites complaints from customers F19 In our company, problems in 0 49 measuring CS: people think we can t change it, so we shouldn't measure it F25 In oirr company, problems in 0-48 measuring CS: people don't really believe in it F29 In this type of market, people 0-42 think measuring CS is a waste of time because ncKjne eise does it in this nriarket F14 In our company, problems in 0-37 measuring CS are: management does not support it F16 In our company, problems in 0-41 measuring CS are: it is not how we do things in this company FI7 In our company, problems in 0-45 measuring CS are: people think it is not appropriate in this kind of business F18 In our company, problems in 0-31 measuring CS are: people think it has a lower priority than other things F13 In our company, problems in 0-30 measuring CS are: we have no clear "customer satisfaction" policy F22 In our company, problems in 0-42 measuring CS are: no-one takes any notice of the results

0-38 0-48 0-38 0-31

038

0 46 0-48

0 50

0-48 0-46

0-38 0-44 0-41 0-37

0-32

0-74 0-70 0-63 0-30

Pioc2=Corporate culture

0-60 0-36

0-60 0-55 0-34

0-31 0-41 0-34

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Management

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Table 3. Continued
Variablest Problems with measuring CS:
Factorsf 1 2

Proc3=Market 0-77 F27 In this type of market, people complacency think measuring CS is a waste of time because: we already know what really matters in this market 0-76 F26 In this type of market, people think measuring CS is a waste of time because: we already know what customers think 0-63 F28 In this type of market, people think measuring CS is a waste of time because: if you produce the t)est product that is what matters 031 0-63 F20 In our company, problems in measuring CS are: people don t like inviting criticisms 0-47 046 F8 The problems about measuring 0-45 CS are: customer satisfaction is Proc4=Resources/ 0-84 difficult to measure capability F5 The problems about measuring CS are: the technical expertise you need F6 The problems about measuring CS 0-81 0-44 0-63 are: the systems you need F4 The problems about measuring CS 0-62 041 are: the people you need F3 The problems about measuring CS Proc5=Logistics 077 are: the time it takes F9 The problems about measuring CS are: it is difficult to identify the real 075 customer who matters FIO The prc4>!ems about measuring CS are: finding out who the customers 0-66 are FIl The problems about measuring CS are: when there are too few 0-48 customers F12 In our company, problems in 0 31 Proc6=Cost 0-87 measuring CS are: people think it is barriers a matter for distributors, not for us 085 F2 The problems about measuring CS are: the finandal resources needed Proc7=Pen:eived 0-65 FI The problems about measuring market drivers CS are: the expense F7 The problems about measuring CS are: in our business people consider 055 technical specifications matter more than what customers think F38 In this type of market, people think 0 51 measuring CS is a waste of time 049 because: they think the market is driven by technical specifications F37 In this type of market, people think 0 48 measuring CS is a waste of time because: they think the market is driven by price

828 Table 3.
Variablest Problems with measuring C5:

Nigel F. Piercy and Neil A. Morgan Continued

Faclarsf 1 0 41 2 3 4 5 0 35 6 7 8 0 60 Proc8=CrEdibility

F21 bl our company, problems in measuring CS are: people don't believe the results Eigenvalues Cumulative percentage of variance explained

21-99 3-41 1-91 174 166 1-52 1-17 1-07 45 8 52 9 56 9 60-5 64-0 67-1 69-6 71-8

Varimax rotation with Kaiser normalization, converging in 12 iterations; tLoadings less than 0 3 are suppressed; ^Measured on 5-point scales where l="a very minor problem" and 5="a very major problem".

done by distributors rather than the manufacturer. The Cost Barriers fador links the finance and expense impUcadons of CS measurement. The Perceived Market Drivers factor Unks beUefs that the market is driven by technical spedficadons and price. The Credibility fador is one variable only: belief in the results of CS measurement.

Index Reliability

Table 4 shows the Cronbach Alpha scores for the indices created from the fadors described above. These suggest that the factor indices are robust, with the exception of STRAT4, which is dropped from the analysis. Results In a preliminary evaluadon of HI, Table 5 suggests a number of significant relationships between the use of CS data in management dedsion-making and the
Table 4. Index reliability
Cronbach Alpa Procl intemal politics, market simplification and customer fear Proc2 Corporate culture Ptoc3 Market complacency Proc4 Resources/capabibty Proc5 Logistics Proc6 Cost barriers Proc7 Perceived market drivers Proc8 Credibility Usel Use2 Use3 Use4 Strati Strat2 Strat3 Strat4 Quality/operations management Staff pay and promotion Staff training and evaluation Strategic management control Service and quality Competitive differentiation High profit/volume Low price/cost 0-97 0-93 0-88 082 072 0-90 0-74 N/A 0-90 0-90 0-88 0-81 0-64 0-65 0-67 0-33 n 200 200 200 200 200 200 200 200 163 163 163 163 187 187 187 187 Mean 1-92 214 2-38 2-79 1-69 2-45 2-34 211 3-25 2-02 2-89 3-15 4-15 3-07 4-01 3-04 SD 0-76 1-03 0-99 0-93 0-63 1-05 1-01 1-17 0-91 0-91 0-95 073 0-69 1-14 1-71 076

N / A , not applicable.

Consumer Satisfaction Measurement and Management

829

Table 5. Correlation* matrix: Managerial uses of customer satisfaction measurement and market strategy components
Strati Service and Cjuality 0-29+ 0-16 0-20t 0-29+ Straa Cojnpetitwe differentiation 0-221: 0-17 0-12 0-36+ Strat3 Migh profiti volume 0-26+ 0-14 0-17 0-33+

Usel Use2 Use3 Use4

Quality/operations management Staff pay and promotion Staff training and evaluation Strategic management control

Pearson correlations; +significance level of 0-001; ^significance level of 0-05.

market sfrategy components identified. This is pardcularly strong for USEl (QuaUty/Op>eradons Management) and USE4 (Sfrategjc Management Control). In considering H2, the correladons in Table 6 show a number of sigruficant reladonships between the processual barrier factors and the CS measurement use factors, although almost none with the market sfrategy components. These reladonships are negadve, and strongest for the use of CS data for dedding steiff pay and promodon and for staff training and evaluadon.

Discussion The underlying point of the case argued in this paper is that the use of CS measurement in pursuit of market orientadon and customer-based or customerdriven market strategies requires a research and managerial agenda which extends beyond the current focus on technique and system. The argument is that CS measurement may potendaUy create posidve or negadve effects in a company, and these may be traced not simply to operadonal and resource issues but to managerial/poUdcal problems and cultural/stmctural characterisdcs. The exploratory evidence gathered in execudve workshops suggested the existence of an agenda of covert fadors currendy ignored by the Uterature, yet potentiaUy highly sigiuficant in determirung the effects and effecdveness of CS measurement. To this may be added the evidence from an exploratory survey of UK manufacturing companies. Perhaps the most notable finding in the data presented here are the intemal processual barriers identified. These were identified as: Intemal Politics, Market Simplification and Customer Fear, concemed with the impact of CS measurement on poUdcs and coxvfUct in the company, and simpUficadon devices adopted in percepdons of the customer; Corporate Culture, and its rejecdon of CS measurement; Market Complacency, which suggests CS measurement is redundant; Resources/Capability, Logistics and Cost Barriers fadors, concemed with the operadonal aspeds of implementing CS measurement; Perceived Market Drivers, representing a corporate beUef that the market is driven only or primarily by technical spedficadons and price; and. Credibility, or whether the results of CS measurement are beUeved in the company. While only exploratory, this fador structure offers a new insight into the real context perceived by execudves for the implementadon of CS measurements systems, and a potendal diagnosdc for studying individual cases. In addidon, the survey showed a reasonably strong posidve reladoriship between the use of CS data and market sfrategy components, and a negadve reladonship

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Nigel F. Piercy and Neil A. Morgan

^-1 S 1

;5

2 23

So

lO
^

o
^

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^

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^

ll

ll-i

Consumer Satisfaction Measurement and Management

831

between the internal processual barriers and the use of CS data in management dedsion-making. What was not clear was a relationship between the processual characteristics and market strategy elements, and this remains a question for further analysis. In essence, what we have found is that the measurement and use of CS data is significantly and positively associated with market strategies of service and queility, competitive differentiation, and high profit/volume, and this is applied most particularly to dedsion-making in the quality/operations area, and in overall strategic management control. This suggests that when it is measured, CS is a significant factor in dedsion-making in these areas. However, what we also find paradoxically is that the more CS data are used in dedsion-making, the more significant are the negative assodations with informal processual barriers. However, these latter relationships are overwhelmingly with the use of CS data in nwking dedsions on staff pay and promotion, and training and evaluation. This suggests a number of specxilative explanations. It may be that CS data are used by companies in situations where internal barriers are low giving negative assodations between use of CS data and the existence of barriers. This may also explain why the clearest relationships aie found for the use of CS data in staff-related issues. Cross-sectional data can tell us little about the emergence or reduction of internal processual barriers over time, or the role that the use of CS data may play in stimulating or overcoming the barriers identified. This also remains an issue for further analysis, requiring a longitudinal design.

Implications Perhaps the most notable implication of this work is that a new research agenda is emerging, based on the contention that the present literature is myopic in its concern with the technical aspects of CS measurement alone, at the expense of an analysis of processual aspects. A start has been made in developing such an agenda through the executive workshop data and the exploratory survey evidence presented here. This work is to be continued in two ways. Firstly, a more detailed analysis of processual characteristics is to be undertaken, and secondly, a longitudinal case study is being developed to examine the internal and external effects of the implementation of CS measurement over a 2-year period. The managerial implications of the work to-date are that: the issues to be considered in implementing and extending CS measurement systems may be more diverse and complex than previously suggested in the literature. In particular it may be necessary to think far more of the behavioural and organizational aspects of CS measurement, if such approaches are to be successful and effective in assisting the development of market orientation and customer-based market strategies. In particular, the potential tension between the demands and requirements of the internal market (employees, managers, distributors) and the external market (enduser and intermediary customers) should be recognized as a focus for management attention. For example, the structure shown in Figure 3 is one which has proved insightful in discussions with managers. This suggests four possible scenarios when internal and external customer satisfaction levels are compared: Syner^internal

832

Nigel F. Piercy and Neil A. Morgan Extemal customer satisfaction

Hi Hi Lo

Intemal customer satisfaction Coercion

Lo

Alienation

Figure 3. Internal and extemal customer satisfaction.

and extemal customer sadsfacdon is high, and should be sustainable and selfregenerating; Coerdon extemal customer sadsfacdon is high, but through dght measurement control giving low intemal customer satisfadion and problems of sustainabiUty; Alienationboth intemal and extemal customers are dissatisfied, with low loyalty and low performance Ukely; and, Intemal Euphoriaintemal customers are highly sadsfied but their focus is inward and not on the extemal customer. These scenarios aie exaggerated, but provide a basis for pracdcal insight into the intemal/external market interface 2md what this produces. Certainly, there are apparent dangers in adopting CS measurement systems which do not address the intemal market questions raised in this work, which may extend beyond simple failure to gain customer-focus and may actuaUy damage corporate capabiUty to deUver intended meirket strategies of service and quaUty more generaUy.

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