Increasing Customer Satisfaction: Strategies For Computer R Us

Investigation into Customer Satisfaction

The present assignment is an investigation into the customer satisfaction of Computer R Us and to present strategies to increase the level of customer satisfaction. Computer R Us is a manufacturer and retailer of different types of portable computers. It has recently launched a computer repair division – CompleteCare. The computer repair division is facing problems in three fronts –

1. Shortage of computer repair parts
2. Problems in distribution
3. Less number of technically trained staff for telephonic repair

To investigate the management of Computer R Us undertook a research. The research showed that the core issue for CompleteCare was customer satisfaction. To this end Computer R Us took some initiatives so that the minimum level of customer satisfaction rose to 60%. The intention of initiatives taken by the management of Computer R Us was –

1. Reduce the time of response taken by the staff of CompleteCare
2. An increase in the customer communication between the customer and Computer R Us
3. Providing better advice by CompleteCare staff
4. Introduction of Loyalty rewards program

To analyse the extent of the effectiveness of the initiatives a survey questionnaire was prepared. The survey questionnaire was distributed amongst 500 customers of Computer R Us. 420 customers responded to the survey.

The present assignment analysis the survey response and provides Computer R Us with strategies on increasing the customer satisfaction to CompleteCare division.  

To understand the problem regarding CompleteCare division of Computer R Us a survey was done amongst the customers of the firm. Simple random sampling technique was used to collect the information. With the help of the simple random technique each customer of Computer R Us had an equal opportunity of being surveyed. This is the simplest survey methods which can be used to appraise a large number of customers. The advantage of this technique is it does not require information about the customer’s population. It also is free from bias and prejudice. However, the sampling technique has lower precision than probability sampling technique. Another disadvantage of simple random sampling is that it is difficult to collect samples spread over a large geographical area (Malhotra, Baalbaki & Bechwati, 2013, p. 256).

To get the responses of the customers a 10 point rating scale was used, with 1 being strongly disagree and 10 having strongly agree. The itemised rating scales are easy to understand for the respondents. For the researcher an itemised rating scale does not need any coding (Clow & James, 2013, p. 297)

In addition to the above sampling technique the survey question was also designed with the ethics of marketing research being kept in mind. The survey questions were closed ended. Thus care was taken that the survey questions were not overtly biased. Care was also taken that the questions were not long (Malhotra, Baalbaki & Bechwati, 2013, p. 257).

• Question 1. Does the current level of customer satisfaction differ from management’s goal of 6 out of 10?

Strategies for Improvement

Null Hypothesis: The proportion of Satisfied customers is equal to 0.6

Alternate Hypothesis:  The proportion of Satisfied customers is not equal to 0.6

• Question 2. Is there any difference between the satisfaction of male and female customers with the new loyalty rewards program at Computers R Us?

Null hypothesis: There is no difference between the average satisfaction of male and female customers with the new loyalty rewards program at Computers R Us.

Alternate hypothesis: There is difference between the average satisfaction of male and female customers with the new loyalty rewards program at Computers R Us.

Where and are the average level of satisfaction of male and female customers with the new loyalty rewards program at Computers R Us respectively.

• Question 3. Are there any differences in the overall customer satisfaction across the following age groups: 1, 2, 3, 4 and 5?

Null Hypothesis: There is no difference in average customer satisfaction across the age groups.

Alternate Hypothesis: There is difference in average customer satisfaction across the age groups.

Where , , , and is the average customer satisfaction across the age groups 1, 2, 3, 4 and 5 respectively.   

• Question 4. Is there any difference in customer satisfaction between responses to the initiatives of ‘increasing the level of advice CompleteCare staff provide on Computers R Us products and services’ and ‘the loyalty rewards program at Computers R Us’?

Null Hypothesis: There is no difference between the average customer satisfaction between “the level of advice, CompleteCare staff provide on Computer R Us products” and “the loyalty rewards program at Computer R Us”

Alternate Hypothesis: There are differences between the average customer satisfaction between “the level of advice, CompleteCare staff provide on Computer R Us products” and “the loyalty rewards program at Computer R Us”

Where  and  are the average level of customer satisfaction for the level of advice, CompleteCare staff provide on Computer R Us products and loyalty rewards program at Computer R Us respectively.  

• Question 5. Do any of the initiatives of ‘decreasing response times in the CompleteCare division’, ‘the level of advice CompleteCare staff provide on Computers R Us products and services’, ‘the level of communication with staff and management’ and ‘new loyalty rewards program’ influence the overall satisfaction of Computers R Us customers?

Null Hypothesis: The coefficients of ‘decreasing response times in the CompleteCare division’, ‘the level of advice CompleteCare staff provide on Computers R Us products and services’, ‘the level of communication with staff and management’ and ‘new loyalty rewards program’ are zero.

Alternate Hypothesis: The coefficients of ‘decreasing response times in the CompleteCare division’, ‘the level of advice CompleteCare staff provide on Computers R Us products and services’, ‘the level of communication with staff and management’ and ‘new loyalty rewards program’ are not equal to zero.

Where , ,  and are the coefficients of ‘decreasing response times in the CompleteCare division’, ‘the level of advice CompleteCare staff provide on Computers R Us products and services’, ‘the level of communication with staff and management’ and ‘new loyalty rewards program’ respectively.

Statistical Technique and Justification

To test hypothesis 1 one sample t-test is used. This test can be taken as the appropriate test to compare the difference between two proportions (Zikmund, Babin, Carr, & Griffin, 2012, p. 520).

Surveying Customer Satisfaction

 In the testing of hypothesis 2 independent sample t-test is used. The independent sample t-test is the appropriate test to compare the means of two independent samples (Anderson, Sweeney & Williams, 2017, p. 411).

To test hypothesis 3 one-way ANOVA is used. One-way ANOVA is the appropriate test to compare the means of more than two groups (Zikmund, Babin, Carr & Griffin, 2013, p.542).

In the testing of hypothesis 4 independent sample t-test is used. The independent sample t-test is the appropriate test to compare the means of two independent samples (Anderson, Sweeney & Williams, 2017, p. 411).

To test hypothesis 5 multiple regression is used as the appropriate test. Multiple regression analysis is used to study the relation between a single dependent variable and more than one independent variables (Zikmund, Babin, Carr & Griffin, 2013, p. 586).  

• Answer 1.

An analysis of the sample of 420 customers shows that 318 customers are satisfied with the services of Computer R Us.

Thus the proportion of satisfied customers ‘P’ =  

The standard deviation of customer satisfaction s =

Where n = number of customers surveyed = 420

Thus the test statistics ‘z’ =  

From the normal distribution table we find that the probability of the test statistics less than -7.62 is P-value > 0.000

Thus at 0.05 level of significance since P-value < 0.05 we reject Null Hypothesis.  

Thus the proportion of customer satisfaction is 0.76 which is more than the managements goal of 0.6.

• Answer 2.

In order to investigate the level of customer satisfaction between male and female customers towards the New loyalty programs of Computer R Us the independent sample t-test is used. 

Table 1: t-Test: Two-Sample Assuming Equal Variances
	Male	Female
Mean	3.945	5.709
Variance	4.656	3.436
Observations	183	237
Pooled Variance	3.967
Hypothesized Mean Difference	0
df	418
t Stat	-8.997
P(T<=t) one-tail	0.000
t Critical one-tail	1.649
P(T<=t) two-tail	0.000
t Critical two-tail	1.966

From table 1 we find that for the independent sample t-test p-value < 0.000 at 0.05 level of significance. Thus we reject the null hypothesis.

The average level of customer satisfaction of females (5.709) is more than the average level of customer satisfaction of males (3.945). 

• Answer 3.

In order to investigate the overall level of customer satisfaction across the five age groups the one-way ANOVA is used

Decision Rule: Accept Null Hypothesis if F-value < F-Crit or P-value > 0.05, else reject Null Hypothesis

Table 2: ANOVA
Source of Variation	SS	df	MS	F	P-value	F crit
Between Groups	11.24	4	2.810	1.036	0.388	2.393
Within Groups	1125.99	415	2.713
Total	1137.23	419

From table 2 we find F(4,415) = 1.036, < 2.393 value of F-crit, Similarly, p-value = 0.388 > 0.05 level of significance. Thus we accept the null hypothesis. Hence, there is no difference in the average level of customer satisfaction of Computer R Us across age groups.  

Testing Hypotheses

Table 3: SUMMARY
Groups	Count	Sum	Average	Variance
1	100	601	6.01	3.99
2	108	675	6.25	2.38
3	112	721	6.44	2.05
4	64	394	6.16	2.45
5	36	231	6.42	2.71

From table 3 we find that the average level customer satisfaction level ranges from 6.01 for age 1 to 6.44 for age group 3. Thus the average level of customer satisfaction are equal. 

• Answer 4.

In order to investigate the level of customer satisfaction between the level of Advice provided by CompleteCare Staff and loyalty rewards program independent sample t-test is used.

Decision Rule: Accept Null Hypothesis for p-value > 0.05, else reject Null hypothesis 

Table 4: t-Test: Two-Sample Assuming Equal Variances
	Level of Advice	Loyalty Rewards program
Mean	6.790	4.940
Variance	4.443	4.724
Observations	420	420
Pooled Variance	4.584
Hypothesized Mean Difference	0
df	838
t Stat	12.522
P(T<=t) one-tail	0.000
t Critical one-tail	1.647
P(T<=t) two-tail	0.000
t Critical two-tail	1.963

From table 4 we find that at 0.05 level of significance p-value < 0.001. Hence we reject the Null Hypothesis. Thus the average level of customer satisfaction with the level of advice given by CompleteCare (6.790) is not equal to the average level of customer satisfaction with the loyalty rewards program of Computer R Us (4.940).

Hence it can be said that the average customer satisfaction with the level of advice provided by CompleteCare (6.790) is more than the average satisfaction of the customers with loyalty rewards program (4.940).

• Answer 5.

In order to investigate if any of the initiatives taken by the management of Computer R Us has an impact on the overall satisfaction of customers a multiple regression analysis is done.

Table 5: Coefficients for Regression

	Coefficients	Standard Error	t Stat	P-value
Intercept	5.441	0.360	15.116	0.000
Decreasing Response Time (Question 5)	0.083	0.057	1.474	0.141
Level of Advice (Question 6)	0.131	0.055	2.409	0.016
Level of Communication (Question 7)	0.113	0.061	1.844	0.066
Loyalty Program (Question 8)	-0.245	0.034	-7.322	0.000

Table 5 presents the coefficients of the regression analysis. From table 5 the influence of different initiatives of the management on customer’s satisfaction can be seen as:

When all other variables are constant then Level of Advice has the strongest influence on customer satisfaction (0.131). In addition the impact is statistically significant (p-value = 0.16, less than 0.05, level of significance).

When all other variables are constant then Loyalty rewards program has negative influence on customer satisfaction (-0.245). In addition the impact is statistically significant (p-value < 0.001, less than 0.05, level of significance). 

For question 1 it can be said that the level of customer satisfaction is higher at 7 out of 10 than the management’s goal of 6 out of 10.

With the present level of customer loyalty rewards program the average satisfaction of female customers (5.709) is more than the average satisfaction of male customers (3.945).

There is no variation in the average level of customer satisfaction across ages.

The analysis of the survey responses shows that the average level of satisfaction with advice provided by CompleteCare staff on behalf of Computer R Us (6.790) is more than the satisfaction with the loyalty rewards program (4.940).

The analysis of the survey responses shows that customer satisfaction with level of advice has the strongest influence (0.131). The analysis also shows that the loyalty program of Computer R Us has a negative influence on overall customer satisfaction (-0.245).  

The analysis of the survey by Computer R Us shows that the level of customer satisfaction is higher than the goal set by the management. In addition, we find that female customers are more satisfied than male customers with the services provided by Computer R Us. Moreover the satisfaction with level of advice provided by CompleteCare division of Computer R Us is higher than the satisfaction with loyalty rewards program. Additionally, it is also seen that the level of customer satisfaction is equal across all ages. The analysis of the survey data also shows that level of advice of CompleteCare has a positive and very strong influence on customer satisfaction. On the other hand it can be seen that the loyalty rewards program has a negative influence on customer satisfaction.   

From the analysis of the survey data the following recommendations can be provided:

1. The current degree of customer satisfaction is more than the goal of the management. The management should try to bank on this higher level of satisfaction as well as still try to improve the level of customer satisfaction more.
2. The level of satisfaction of males is less than those of female customers. Hence, the management of Computer R Us should look into the specific requirements of male customers and thus provide better services.
3. It is seen that the level of customer satisfaction is equal across all ages. A second survey should be conducted to verify level of customer satisfaction across ages.  
4. The level of satisfaction with the loyalty rewards program is lower than with the Level of Advice provided by CompleteCare. Thus, the management of Computer R Us should try to get better rewards program.
5. It is seen that the loyalty rewards program has a negative influence on customer satisfaction. A better loyalty rewards program is necessary to create a positive impact on customer satisfaction. In addition the impact of level of communication and decreasing response time on customer satisfaction has to be improved.

References

Anderson, D., Sweeney, D., & Williams, T. (2017). Essentials Of Modern Business Statistics With Microsoft Excel (7th ed.). Cengage Learning.

Clow, K., & James, K. (2013). Essentials of marketing research. Sage Publications.

Malhotra, N., Baalbaki, I., & Bechwati, N. (2013). Marketing Research: An Applied Orientation. Pearson Education.

Zikmund, W., Babin, B., Carr, J., & Griffin, M. (2013). Business research methods (9th ed.). Cengage Learning.