Does Customer Satisfaction Have an Effect on Sales Performance - Dissertation Example

Dissertation Proposal Plan Aims and Objectives Since last few decades, a rapid increment has been observed in competition, especially in retail industry in different parts of the globe. In the result, various strategies are being employed by companies to increase their sales by giving discounts, cut off prices, etc. in order to satisfy consumers. In other words, some factors are very imperative for success of any company, and sales performance is one of these factors, as it decides financial performance of the company, which plays a crucial role in its survival. In this regard, subject area of customer satisfaction and sales performance has been considered for the dissertation. Different factors related to relationship of customer satisfaction and sales performance will be investigated along with different other issues, such as role of employee satisfaction in increment of sales performance, and expression of level of customer satisfaction. In brief, following is the proposed title of dissertation that will be beneficial for students, teachers, and professionals in better understanding of business-related issues, specifically, in retail business industry: “Does Customer Satisfaction have an Effect on Sales Performance?” In today’s modern era, customer is considered the king of business, and businesses around the globe are endeavoring and putting endless efforts to improve their sales performance. Let it be food, computers, automobile, technology, etc, sales performance is the key factor of success, which cannot be ignored at any cost. A number of factors have been related to sales performance; however, this dissertation will specifically focus on only customer satisfaction and its effects on sales performance. Before this dissertation, researcher takes no stand whether customer satisfaction enhances sales performance or decreases it. However, literature review on the selected topic will provide a brief preview, which will help the researcher to take a stand, in order to evaluate the outcomes and information efficiently and effectively. Importantly, it is noted that sales performance has always been associated with employee satisfaction, and scholars have stated that sales performance increases when employees are satisfied with their business environment and offerings given to them. On the other hand, this dissertation will attempt to provide and evaluate an innovative theory of relationship of customer’s satisfaction and sales performance, which will be advantageous for businesses around the globe as well. In order to acquire precise outcomes, business practices will be reflected critically by employing different research approaches, discussed in methodology section of this research proposal. Lastly, some of the basic points focused in dissertation will be: Analysis of Available Description of Customer Satisfaction and Sales Performance Identification and Evaluation of Relationship of Customer Satisfaction and Sales Performance Possible Approaches that can be employed to achieve Effective Outcomes in Identified Relationship It is hoped that the dissertation will be considered as a valuable contribution in academic world. Upon its approval, researcher would like to get the dissertation published for future utilization by individuals, businesses, researchers, and professionals. Literature Review Customer Satisfaction As earlier mentioned in the proposal that customer or consumer is considered king in business, and particularly, retail industry, customer satisfaction has become an imperative business term that evaluates level of fulfillment of consumers’ expectations regarding provision and offering of products and services. In today’s modern era where competition is intense, business organizations are endeavoring to lower their costs, offer discounts, just in order to satisfy consumers. Within business domain, performance indicators play a crucial role in survival of a business organization, and studies have noted that customer satisfaction has been one of the four significant indicators that assess different business processes, in order to decide their future strategies for improved and better performance. In today’s competitive market, strategies are employed to retain existing consumers, and at the same time, new marketing techniques are implemented to acquire new customers. In this regard, term of customer satisfaction decides whether the organization has been successful in carrying out their business activities or not. In retail industry, one of the foremost components of business strategies is customer satisfaction. However, scholars have noted that there is an urgent need of defining the precise role of customer satisfaction, as unclear version is available until now. (Kamakura, pp. 294-317) One of the reasons of such uncertainty is psychological nature of this term, which does not allow businesses to understand, identify, and evaluate it effectively. Still, a majority of researchers and business leaders have accepted that higher sales is an outcome of increased satisfaction of existing customers, besides other factors, such as administrative and marketing efforts. In this regard, a number of customer satisfaction related surveys and interviews are being offered and carried out marketing research analysts that provide their services regarding identification and evaluation of customer’s satisfaction. Studies have noted that there is still huge scope for detailed research in this area of study, as still overall satisfaction and store attributes are considered while measuring customer satisfaction, which covers only a small part of the whole terminology. (Mittal, pp. 131-142) In retail industry, firm establishment has yet not been observed regarding the relationship between sales performance and customer satisfaction, and thus, various issues need consideration that will be discussed in the dissertation. Another problem in measurement of customer satisfaction besides its psychological natures is its ambiguous temperament, where level of satisfaction varies from one consumer to other. It is observed in different studies that a single product or service provides contrasting results related to customer satisfaction, which has created confusions in the study of this domain. However, a number of scholars have associated some physical, as well as, psychological variables with levels of satisfaction, and thus, a combination of such variables is now being used in different studies to acquire an average outcome or level of satisfaction. (Bernhardt, pp. 161-171) Moreover, due to psychological nature of customer satisfaction, a major amount of consideration is being given to quantitative data to analyze and measure it, which has resulted in the creation of its relationship with sales performance. In the year 2002, ten domains of satisfaction have been identified and explained by some scholars, which will be considered during dissertation as well. Some of the imperative of these identified domains are environment, value, innovation, and quality. (Kamakura, pp. 294-317) A number of other researchers are now endeavoring to create an incorporated model that may measure customer satisfaction along with its linkage with sales performance. Besides integrated models, surveys and questionnaires have become significant role-players for the measurement of customer satisfaction in which, a scale of 1 to 10 is given to consumers, and they are required to respond to questions related to customer services, quality of the product, accessibility, etc. Such gathered information allows companies to evaluate their customers’ satisfaction level that can then be utilized to relate with their sales performance quarterly, bi-monthly, or annually. Conventionally, two reasons were identified related to customer satisfaction and sales performance. According to scholars, it is very likely that consumers may continue the purchasing process with a company, if they are satisfied with its products or services. Secondly, it is noted that word of mouth advertising play a major role in improving sales performance, which is linked with customer satisfaction. In contrast, such advertising approach will be considered more in cases of disappointed customers who will be sharing negative experiences even more, resulting in decreased sales performance. Both of these reasons have been advocated by contemporary scholars, which has resulted in commencement and employment of customer satisfaction and sales performance related strategies and schemes in the United Kingdom, as well as, other parts of the globe. (Anderson, pp. 107-120) However, in this scientific period, concepts like even faith require certification. Therefore, efforts are being made to acquire related evidence. In this regard, experts were able to create three methodologies for identifying and analyzing relationship of customer satisfaction with sales and financial performance, which will be discussed briefly. One of the foremost and imperative models for the abovementioned purpose is Projection that has played an important role in evaluating this relationship. In this method, market worth of a consumer is considered for making assumptions related to sales performance. Consumer accounts and financial records of the company are used in this model for generation of estimates. In the result, positive or negative impact due to customer satisfaction or dissatisfaction is projected by the combination of generated estimates and market behaviors. (Anderson, pp. 869-882) In this regard, Projection model has been accepted by a number of business organizations and companies to evaluate the effects of customer satisfaction on sales performance. However, like every approach or model, some strengths and drawbacks have been identified. One of the qualities of this model is that a marvelous amount of information is not required for analysis, which allows companies to obtain and analyze information easily. Secondly, it does not include complex statistical methodologies and provides simple and uncomplicated results, which is one of the finest characteristics of the linkage model. In contrast, the model has some drawbacks as well. For instance, assumption related to market worth of a consumer is the major component of Projection model, which increases the possibility of errors and inaccuracies. Behavioral intention, another constituent of the model, is the factor that is not isolated and depends on future circumstances, which results in unconfirmed results and outcomes related to sales performance. (Johnson, pp. pp. 35-69) Due to various drawbacks of abovementioned model, an alternative methodology has been established that demonstrates the analysis, in order to evaluate the benefits of customer satisfaction on sales performance. Such model is known as Direct Linkage Model, which depends on actual market worth rather than assumed worth. As earlier mentioned, one of the strengths of direct linkage model is its dependence on actual market behaviors that decreases the possibilities of erroneous results, and thus, has received major support from directors and shareholders that advocate evidence, rather than faith. Secondly, predictive models can be developed by the utilization of direct linkage model, as actual market behaviors are focused in this model. Unfortunately, this model has some shortcomings as well. One of the drawbacks is complexity of the model unlike projection model, which analyzes data in a simple manner. In this regard, direct linkage model requires more efforts during the analysis, as well as, integration of gathered information to acquire required results. (Anderson, pp. 107-120) Due to shortcomings and drawbacks of the two models used for the understanding relationship of customer satisfaction and sales performance, a third model has been created, which has been successful in acquiring support from managers, as well as, decision makers in various parts of the globe. The third, hybrid model has contributed effectively in analyzing information for assessing the selected topic. In this model, approaches of projection and direct linkage models are merged to perform simulations. The model considers quantitative methodology to assess the presence or absence of any relationship between customer satisfaction and sales performance. (Kamakura, pp. 294-317) In addition, another important benefit of using hybrid approach is its evaluation of strength of abovementioned relationship. In this regard, a number of efforts have been made and steps have been carried out by scholars and business experts to understand and identify different factors that may contribute in evaluating the possibilities of any effects of customer satisfaction on sales performance. In terms of specific studies carried out on the selected topic, in the year 1992, Zahorik and Rust carried out one of the first research on the effects of consumer satisfaction by formulating a statistical framework for the evaluation of financial value of level of satisfaction. Subsequently, in the year 1993, outcomes of Zahorik and Rust were addressed by Anderson and Sullivan, and approximately twenty-two thousand consumers of Sweden were surveyed and interviewed to acquire related information. This 1993 study advocated the theory of positive effects of customer satisfaction on sales and financial performance of the company. Consequently, a few more scholars have endeavored to analyze the relationship of customer satisfaction and sales performance. Some of these studies were carried out by Johnson, Lehmann, and Kamakura in the year 1998, 1994, and 2002 respectively. Methodology It is very imperative for a researcher to consider previously carried out researches, as well as, carry out primary researches, in order to identify and evaluate possible gaps and findings related to the topic. In this regard, concise surveys will be an important part of the methodology, as it will authenticate the validity of results, as well as, will be specific according to the selected research topic. In brief, questionnaires and interviews are some important components of primary research method, which involves generation of different questionnaires and interviews from selected participants according to the selected topic. Unlike secondary research method, information is gathered hand-to-hand and directly by the researcher. In other words, my dissertation will acquire groundwork from results of questionnaires and interviews in a brief manner while carrying out secondary research comprehensively. At the same time, secondary research involving archival and desk research of journals and books, which will play a vital role in the formulation of required materials for primary research during the dissertation. Moreover, secondary research will allow the researcher to take a stand while carrying out primary research. Some of the questions will be based on topics, such as relationship of customer and employees, sales and customer satisfaction, customer relationship and financial performance, etc. Ultimately, dissertation will endeavor to identify and capture changes in processes related to customer relationship management and factors that relate sales performance with customer satisfaction. A case study will also be a part of the methodology, which will allow better and detailed understanding of available literature and acquired results from primary research by considering consequences and appearances of processes on ground reality. A company related to retail industry will be selected during the dissertation and research will endeavor to evaluate the possibilities of effects of customer satisfaction on sales performance. Different employees of the case study will be surveyed through questionnaires that will be carried out in a particular portion of the population, and various variables, such as, gender, location, department, age, etc of the company and customers will be gathered by the researcher. Every research method has its advantages, as well as, drawbacks. In terms of advantages, data can be easily collected in secondary research, which does not require intense efforts like primary research, as information has just to be gathered, rather than produced or generation. In this regard, time is one of the most important factors that incline researchers to select secondary research method. Same is the case with this dissertation, as it will save time, money, and lot of efforts during the research. In other words, time is saved that is required for performing a number of surveys and interviews from various people. Secondly, secondary research method is considered as one of the cheapest methods that can be carried out by researcher. Primary research method requires work force as discussed earlier in the proposal. Therefore, finance is another issue that becomes a major problem during the primary research. On the other hand, anybody or everybody can access available data from different sources during secondary research method. Thus, this is another reason that researcher will focus more on methodological processes of secondary research. Data Collection Besides methodology, it is very important that valid and legitimate sources should be selected during the research, as it is likely that selection of invalid sources may result in ineffective research regardless of effective methodological approaches. In this regard, a number of printed sources are available for almost every company to gather required and previously collected data from them, which will help the research in acquiring information and data for understanding the effects of customer satisfaction on sales performance. Trade newspapers are considered an imperative source in business management related researches, and thus, they will play a significant role in this dissertation. Besides newspapers, a number of academic journals are available in libraries and internet, which will provide a wide range of issues related to the selected topic. Besides these two sources, books will be used to support the former sources, as they are considered the most valid source in academia, and therefore, will be a supportive pillar for the dissertation. Additionally, today’s market consists of many electronic resources that will be available to gather information on the selected topic. For example, electronic academic journals and encyclopedias have now become an authentic platform for research and education on the internet. A number of online services are now offering and providing articles and studies on the selected topic, which will ease the process of research during the dissertation. These services are not free; however, these charges will be much less, if they are compared with expected expenses of primary research methodology. Evaluation is another imperative notion that should not be ignored in any type of research approach. In this regard, the research will endeavor to validate all the sources used in the paper, as it will be beneficial for researcher, as well as, future studies that will be carried out on the basis of this dissertation. Once again, books will support and advocate the process of evaluation and validation during the research. Moreover, researcher will try its best to acquire information and resources from recent books, as advancement of information technology has resulted in disposition of a number of theories and concepts related to business, sociology, science, etc. Furthermore, some other sources related to CRM, sales and financial performance will be analyzed during different stages of the research process. Lastly, leading business experts in selected domain will be considered during the collection of data for its analysis. Current trends of retail industry will be identified and acquired by trade related magazines. Though, a number of magazines do not provide or offer unbiased opinions and views; researcher will attempt to ignore biasness, and will carry out critical analysis in an impartial and neutral manner. Data Analysis When information and its relations are investigated systematically and scientifically, it is known as Quantitative Research. In addition, development and utilization of statistical models, theories, and suppositions is one of the major objectives of quantitative research aimed for effective analyses of acquired data. Measurement is one of the most significant components of quantitative research, and thus, it will help research in deciding evaluating effects of customer satisfaction on sales performance by creating statistical models, graphs, etc. In the result, mathematical and statistical expression of acquired information will present the outcomes in a more systematic and organized manner. Management sciences, social sciences, and natural sciences are widely being benefited from quantitative research in contrast to qualitative research, which will be a part of this dissertation as well for expressing observations theoretically. In other words, explanation of statistical models will be done by applying qualitative methods that will enhance the understanding of dissertation. In this regard, combination of both methodologies of data analysis will result in precise and effective presentation of the selected topic. In brief, quantitative research methodology will be used during the dissertation for data analysis, as it will allow researcher to acquire concrete results and justifications whether customer satisfaction increases sales performance or not. Research previously carried out on the selected subject will be overviewed by researcher and necessary points will be taken., as the summarization of previously-done research will be necessary, in order to acquire the quantitative data. By this, possible gaps in the previous work will be identified during the research process, and logical extensions will be evaluated possibly by questioning and discussing during the primary research method. In addition, existing work will be analyzed and finalized after the collection of data through different sources of secondary research mentioned earlier in methodology. The abovementioned process of identification of valid and essential information from the previously done primary research is considered as one of the most important and difficult phases of the quantitative research. It is observed that research becomes easy and effective, if researchers are able to complete this process of quantitative research successfully. References Anderson, Eugene W. “Customer Satisfaction, Market Share and Profitability: Findings from Sweden,” Journal of Marketing, 1994, 58 (2), 53-66. Anderson, Eugene W. “Foundations of the American Customer Satisfaction Index,” Total Quality Management, 2000, 11 (7), 869-882. Anderson, Eugene W. “Strengthening the Satisfaction-Profit Chain,” Journal of Service Research, 2000, 3 (2), 107-120. Bernhardt, Kenneth L. “A Longitudinal Analysis of Satisfaction and Profitability,” Journal of Business Research, 2000, 47, 161-171. Johnson, Michael D. Improving Customer Satisfaction, Loyalty, and Profits, San Francisco, CA: Jossey-Bass Inc., a Wiley Company, 2000. Kamakura, Wagner A. “Assessing the Service-Profit Chain,” Marketing Science, 2002, 21(3), 294-317 Mittal, Vikas. “Satisfaction, Repurchase Intent, and Repurchase Behavior: Investigating the Moderating Effect of Customer Characteristics,” Journal of Marketing Research, 2001. 38 (1), 131-142. Useful Websites Free Management Library. http://managementhelp.org/customer/satisfy.htm Emerald Academic Journal. http://www.emeraldinsight.com Quantifying Customer Satisfaction. www.webperformanceinc.com/library/files/UKTT17.pdf Time Scale & Plan It is very imperative that one should write dissertation with great care. In this regard, period is very significant, as a quick completion of dissertation may result in ineffective and inaccurate thesis, which may not be a contributing factor in academia. As mentioned in the proposal that both primary, as well as, secondary research will be carried out by the researcher, a minimum period of three to four months is required to carry out mentioned research methodologies and gather required data and information. This period may include detailed analysis of the information, which is necessary for presenting a critically written thesis paper. During this period, researcher will appreciate suggestions and advices from instructor, in order to make it a beneficial and valuable item in the academic world. Read More