In this module, we discuss the third of our mega-marketing concepts – the circle of satisfaction. The circle of satisfaction has its origins in the 1^st time zone when the consumer is searching and estimating quality and value [and selecting a product on quality and value expectations], then during the 2^nd time zone comes back into play when the customer is experiencing and assessing the total product, however, the circle of satisfaction lives primarily in the 3^rd time zone when the customer is reflecting and evaluating the exchange and then forms attitudes that influence future behaviour. At the end of this module readers should recognise how the buyer decision process, the total product, and the circle of satisfaction come together.

This slide identifies 4 types of satisfaction. Often I am asked which is the most important? The reality is they are all important – but in different ways. Take episodic satisfaction if the first episode or encounter with a  organisation results in an evaluation of dissatisfaction it is likely that the customer will never return and a cumulative evaluation of satisfaction will never occur. For organisations cumulative satisfaction helps to identify the lifetime value of each customer.

Once when I was explaining the relationship with satisfaction and organisational success a student asked if I could draw on the whiteboard how I saw it all come together. Up to this point I had always outlined the various academic authors and their contribution – I could see it but clearly the students could not. As I drew what was in my mind’s eye the student stated that it now made sense. That evening at home, whilst watching TV with my family [The Lion King] I formalised it on a PowerPoint slide and Called it the Circle of Satisfaction – in the years since many students and academics have commented how this provides clarity. 

This diagram brings the interactions of the consumer and the organisation together in the third time zone of the buyer decision process. The starting point is the quality [the sum of the qualities] that the customer receives in an exchange. This becomes and value when quality is evaluated against costs [money, time, and effort]. Value is then evaluated against the expectations that the customer formed in the first time-zone to determine satisfaction. One episode or encounter is termed ‘episodic satisfaction’ [aka transactional satisfaction]. When a customer has more than one episode then they naturally accumulate their evaluations and this is referred to as ‘cumulative satisfaction’. Cumulative satisfaction enables the customer to predict likely organisational behaviour and to feel comfortable with the organisation – we know this as trust [cont. on next slide]. 

[from previous slide]. Trust is interesting as customers who trust an organisation behave differently to the organisations the trust [discussed in a later slide]. However, loyal behavior is directly related to achieving the 3 financial objective of revenue, costs and business value [brand equity]. The loyal behaviour of customers could be thought of as a service the organisation provides to the organisation and it is this service that may lead to a competitive advantage, increased profitability and organisational satisfaction. Just so there is no confusinion the circle of satisfaction is the exploded view of the marketing concept diagram.

There is some research on satisfaction and organisational success, however, our understanding of the COMP factors reveals that every organisation will vary in the degree to satisfaction will impact  the particular business.

Dissatisfied customers will not return unless there is no other option.

The circle of satisfaction highlights that satisfaction is a calculative process. It will vary from customer to customer, however, there are patterns that need to be considered by marketing practitioners.

In this slide we explode how pre-purchase expectations of quality and value are evaluated against expectations and then negative, and positive consumer behaviours are performed – it is important to highlight that when a customer has a neutral evaluation they are ambivalent and unlikely to consider the episode further.

Rarely does an organisation have just one customer; therefore the cumulative satisfaction of all customers is the key we know that as ‘collective satisfaction’. Collective satisfaction is important consideration for mareting practitioners as it is linked to brand equity.

Keep in mind that the first time-zone is about searching, estimating, and selecting; the second time-zone is about experiencing and assessing, and the third time-zone is about reflecting & evaluating then it is clear that the circle of satisfaction belongs in the third time zone. In this slide we take a different look at the circle of satisfaction and consider the actions of negative and positive outcomes and the resultant behaviours.

In the first time-zone product expectations are formed and then evaluated in the third time-zone.

In this slide we have an overview of the three time-zones of the buyer decision process.

This slide reinforce the message that 100% of customers enter the second time-zone with expectations of satisfaction – no one would enter an exchange if the forecast a negative outcome.

In the second time zone the customer is experiencing the product delivery, now this will vary according to COMP factors, nevertheless marketing practitioners must blueprint and manage the customer journey and ensure that back-stage and front-stage activities are choreographed – it is often said that business is theatre [we discuss this in the next chapter]. 

An example of episodic satisfaction transforming into cumulative satisfaction is Doyle’s Restaurant in Watson’s Bay Sydney. I was invited there by a friend and had a lovely experience. Then on another visit to Sydney I had to choose a restaurant to visit and then on yet another visit I had to choose a restaurant. On each occasion the ferry ride from the CBD, the waterfront location with views across Sydney Harbour and to the city created an exceptional experience. Then one day someone asked if I could recommend what to do in Sydney and I found myself recommending Doyle’s and it dawned on me that here was an example of cumulative satisfaction.

KEEP IN MIND: When we consider quality, value and satisfaction we begin to realise that when the core product is similar across different price points the expectations vary with price and therefore marketing practitioners must ensure that the augmented product increases relative to costs.

With dissatisfaction neutral and satisfaction come a range of consumer behaviours. These are outlined in this slide.

In this slide we bring the outcomes and the likely actions actions together. And make the conclusions that customer evaluations can lead to negative or positive consumer behaviours.

Earlier I mentioned that the topic of satisfaction has received some academic attention. One of the most popular articles is ‘the service profit chain’. The general premise is that internal quality is the starting point and how employees who deliver quality internal service are generally more satisfied in their job and this leads to employee retention. Happy and experienced employees tend to create quality external service and this leads to customer satisfaction and loyal customer behavior which reduces customer churn –  i.e., customer retention is increased.

Collective cumulative satisfaction tends to increase positive word of mouth, repeat purchasing behaviou, reduce communication mix costs, increase retention, produce more tollerant customers and through a commitment to quality lower the costs associated with recovering from episodes of satisfaction.

If we consider the previous slides and further research [see the e-book] we can see the effect when collective satisfaction is considered. Whilst one customer will have some impact on the organisation collective satisfaction will have an impact [positive or negative] on the financial objectives of the organisation and furthermore will see an impact on marketshare.

An exploration of the key slides in this module is quite revealing – please study and read the e-book.

The outer circle explains the customer actions and then the impact on the organisation. The starting point is a consumer who has recognised a need with such strength that they are motivated to undertake the first time-zone of the buyer decision process, selected a product, transformed from consumer to customer with a series of expectations about what they would get [qualities] and give [costs of money time and effort] from the exchange. The customer would calculate the get and give as value and the compare it against expectations for an evaluation of satisfaction. If there is satisfaction or if there is more than one episode then the customer will establish cumulative satisfaction, this, providing it is a satisfactory outcome, will lead to a positive attitude and motivate loyal behaviour. This will contribute to a competitive advantage and increased profitability. Now this is only the effect of one consumer a competitive advantage transfers into market share an as we have just seen [2 slides previous] when loyal behaviour happens on a collective scale. This leads to improved profitability and then organisational satisfaction.

In this slide we see how collective satisfaction, leads to collective trust, collective loyalty and how this builds a competitive advantage and brand equity. Also previously we stated how this requires constant and continuous management for this position of product leadership to be maintained – this is often referred to as strategic intent.

The circle of satisfaction reveals the difference between brand image and brand identity. Brand image is the message the consumer receives from an organisation, whereas brand identity is the message received by consumers and customers.

When we holistically consider the circle of satisfaction – we may conclude that customers are only loyal when an organisation provides best satisfying product – for marketing practitioners they should reconsider loyalty programs as reward programs.

The next type of satisfaction is aggregate satisfaction; a topic that has received less attention in the marketing literature, and relates to aggregate products. An aggregate product is where there are multiple total products that are mentally bundled as one customer experience [e.g., a visit to Singapore would have many different total products]. Although tourism is an obvious aggregate product there are many examples [e.g., shopping malls are an aggregate of retailers]. Measuring the collective satisfaction of all customers is also important for aggregate products.

Strangely, there is little attention given to managing an aggregate product, however, it is clear that we should pay particular attention in these situations.

It may appear as if we have done a full circle – it should now be apparent that the circle of satisfaction is an exploded view of this key slide and central to the marketing concept.

KEEP IN MIND MARKETING IS ABOUT BEST SATISFYING 2