Evaluating the customer satisfaction of Ethiopian Airlines based

Evaluating the customer satisfaction of Ethiopian Airlines based on the American Customer Satisfaction Index (ACSI)

Purpose and objectives of the research

The purpose of this thesis is to use the American Customer Satisfaction Index to determine the customer satisfaction level of the studied company; Ethiopian Airlines and to be able to find reasons for the customers’ expectations and their actual perception of the services.

The thesis consists of theoretical and empirical work. In the theoretical part, we focused on the theory of service quality, the importance and impact of customer satisfaction on company performance, and described the American Customer Satisfaction Index.

In the second, empirical part, we focused on evaluating the customer satisfaction level of Ethiopian Airlines. We used the ACSI survey questionnaire, which we adapted to the specifics of the observed company. Based on the obtained results, we sought to find reasons for the gap between expectations and perceptions and suggested possible solutions and improvements.

Our goals in the theoretical part are:

-Review of relevant literature in the subject area

-theoretical definition of service quality, importance of customer satisfaction and the ACSI model

For the empirical part, our goals are:

-preparation and distribution of the questionnaire among customers of the studied company

-examination of the results obtained on the basis of a survey questionnaire

-identifying the causes of the gaps between customer expectation and service if any

-propose improvement methods

Research Methods Used

In the theoretical part, we mainly described the studied facts regarding the chosen topic, as well as the theory about the quality of services and the impact of customer satisfaction on the company’s performance.

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We used a descriptive research method.

In the practical part, we used a quantitative technique to collect the data, namely a questionnaire. The result was then analyzed using SPSS.

Research assumptions and limitations

Assumptions

During the making of this thesis, we assumed the availability of relevant literature and data pertaining to the subject of the research. We also assumed that the theoretical frameworks used were useful and transferable to practice. In the empirical part, we assumed that we would obtain relevant information through a survey questionnaire and that customers would answer the questions truthfully and in the way they actually perceive the company’s services.

Limits

The limitations of the survey came primarily from the exploration of data from a financial point of view, as some data are a trade secret. Due to the large number of employees, we interviewed only the part of the employees in the analyzed company with whom we actually communicate. So mainly with the dispatchers responsible for arranging the transportation.

Chapter 1: Introduction

The success of an organization depends largely on its customers and their satisfaction. Customer satisfaction is achieved with the right quality of service. Customers’ needs and expectations are constantly changing, thus customer satisfaction should be monitored regularly. This will make it easier and more efficient to adjust supply to demand. Responsiveness to change will be much faster and, as a result, the level of service will always be in the range of high quality expected by customers.

Maintaining the expected quality for a longer period means that the company will retain existing customers and attract new customers through them. This ensures the long-term success of the company.

Satisfaction is one of the most desired outcome of a company-customer relationship. Satisfied consumers are likely candidates for re-purchase. From the customer’s point of view, such an attitude means that the company is suitable for him and that he can return to it safely (Musek Le?nik, 2007, p. 20).

Companies pay a lot of attention to designing, managing and executing processes that affect consumer satisfaction. Customer satisfaction is one of the most common refrain in discussing business success factors. It is known that customers who are satisfied with either a brand, product or service are more likely to come back and tell others about their positive experiences (and vice versa). Dissatisfied customers are more likely to go elsewhere, seek satisfaction elsewhere, and spread negative experiences to others, which in turn has a negative effect on the business (Musek Le?nik, 2007, p. 20).

According to Lesnik, the positive consequences of consumer satisfaction are:

-developing customer loyalty

-recommending and sharing positive experiences to others

-enhancing the reputation of the company

-reducing the cost of acquiring new customers

-willingness to buy and pay more

-Increased customer resilience to the pressures and lures of competition

– less number of complaints

These positive consequences directly affect the profit of the company. Every company’s goal is to make profit, thus, companies need to do a lot in order to strive in this dynamic and competitive world.

Satisfaction is an emotional response to a consumer’s experience. It develops as a result of a comparison of previous expectations and experiences (Musek Le?nik, 2007, p. 21).

Whether or not the customer will be satisfied after the service is rendered depends on the relationship between the perceived offer and the expectations of the buyer. If the quality of service is worse than expected, the customer is dissatisfied. If the quality meets the expectations, the customer is satisfied. However, if the quality exceeds all expectations, the customer is very satisfied (Kotler, 2003, p. 61).

In order to satisfy customers, the company must meet or exceed their expectations. The first condition for realizing customer satisfaction is recognizing their expectations. The more the company manages to understand the customer’s expectations and needs, the easier it is to respond to them. Every company must strive to find the optimal balance between the needs, expectations and wishes of the customer and the company’s ability to satisfy them (Musek Le?nik, 2007, p. 23).

However, customers and their needs change over time. They have become more demanding and spoiled. The options at their disposal are becoming wider and more choices are being made. There are more and more providers on the market to choose from. Competition is relentlessly fighting for every customer. Therefore, it is crucial for businesses today to achieve the satisfaction of their customers, to nurture, maintain, encourage, promote and, above all, maintain that satisfaction. Only in this way can the company ensure a successful and long-term existence. Buyers are ultimately the ones who evaluate which offer is sending them the highest value. They are looking for the best value within the constraints of search costs, limited knowledge, mobility and income. They create an expectation of the value they take into account in their behavior. Whether or not the offer really comes close to the expected value of the buyer affects both satisfaction and the likelihood of repurchase (Kotler, 2003, p. 60).

Customer Expectations

A key factor in satisfaction with an individual purchase or service is the customer’s anticipation. Expectations are feelings about the likelihood of an event based on past experience. So it is a customer’s subjective projections about what will happen in a relationship with a particular company. Customers shape their expectations based on past experiences, the advice of friends and acquaintances, and the information and promises of the company and competitors. It is important for companies to choose the right measure of promises and information. This means that they do not increase expectations too much, as customers will expect too much and the satisfaction level will be set very high. On the other hand, the company should not lower its expectations too much because it will not be able to attract enough customers as it will give a bad first impression (Musek Le?nik, 2007, p. 24).

The comparison between the experience experienced and the anticipation anticipated is therefore the basis for creating a sense of satisfaction.

The results of the comparison are usually as follows :

-experience does not reach expectations – there is a feeling of dissatisfaction

-experience exceeds expectation – followed by a feeling of high satisfaction

-experience reaches expectations – a feeling of satisfaction follows

Determining customer satisfaction

Strategic plans are of no importance if they do not allow you to create satisfied customers who are willing to pay for the services of the company. Striving for long – term good relationships with customers, identifying their needs, expectations and satisfaction with products or services has become a universal awareness and activity to keep up with the competition and quickly adapt to customer desires and expectations (Pompe & Vidic, 2008, p. 31).

Regular customer satisfaction reviews provide companies with important information about customers’ perceptions of the quality of their products. Based on this information, companies can create strategies to further improve the quality of their products or services. Also, regular customer satisfaction monitoring enables faster response to potential dissatisfied customers. They can also spread their negative experiences to satisfied customers, thus breaking the system of creating loyal customers.

Achieving customer satisfaction

The more companies understand their customers, the better, easier and more successful they will be to their satisfaction. Focusing on customer satisfaction has become one of the key segments of every successful business over the years. Companies focus on the following three main types of customers (Musek Le?nik, 2007, p. 15):

-satisfied customers;

-dissatisfied customers and

-loyal customers.

Satisfied customers

They are a very deceptive group of customers. The mere satisfaction of the customer is not a guarantee that the customer will return again. It’s kind of taken for granted that a satisfied customer is coming back, but that’s not always the case. A satisfied customer is not yet a loyal customer. This is often the case with illogical discrepancies, as companies have satisfied customers, but the results are still falling. Satisfaction alone is not enough for the buyer’s total affection and trust.