Approaches to ensure comparability of the results of assessment of customer Loyalty to a Pharmacy
Olena Piven1, Elena Shuvanova1, Irina Tkachenko1, Aleksandr Xrenov2
1The Department of Pharmaceutical Marketing and Management,
National University of Pharmacy, Kharkiv, Ukraine.
2The Department of Applied Mathematics and Information Technologies,
O.M. Beketov National University of Urban Economy, Kharkiv, Ukraine.
When assessing complex indicators, the problem of comparability of the results often arises. This fully applies to determining the customer pharmacy loyalty. The aim of the research was to determine approaches to ensure comparability of the results of assessing customer pharmacy loyalty and to determine the range of loyalty. The following NPS methods were used to assess customer loyalty to a pharmacy: customer satisfaction, customer segmentation, and Servqual method. In order to collect primary information, a survey of pharmacy clients was conducted using the method of standardized f2f interviews, where 256 respondents were interviewed. To conduct a study of customer loyalty to a pharmacy, a questionnaire was developed to assess the types of loyalty and another questionnaire to determine loyalty based on an assessment of the quality of service. The questions presented in the questionnaire made it possible to take into account the specifics of pharmaceutical activities. The conditions were determined to ensure the comparability of the results obtained, which included the choice of a single scale in points for the survey and the determination of a single base for calculating relative indicators. Application of the Servquаl method showed that 16.5% of the total number of respondents can be considered loyal; the NPS value was 20%; according to customer satisfaction scores, 24% of fully satisfied customers can be considered loyal. Taking into account the selected research methods, customer loyalty ranges from 16.5% to 24%. Thus, the possibility and feasibility of using a set of methods for assessing customer loyalty to a pharmacy is shown, which makes it possible to obtain comparable results and assess loyalty range.
Pharmaceutical marketing operates with many complex concepts in its activities, such as marketing potential, loyalty, competitiveness, quality, satisfaction, market conditions and market attractiveness, etc. Each of these concepts can be defined by a set of indicators in different combinations.
Obtaining a quantitative assessment of such concepts in the form of complex indicators characterizing their main components allows them to be analyzed in dynamics and in comparison with competitors. However, the assessment of complex indicators, which are characterized by significant diversity, faces the problem of comparability of the results. This is due to the fact that complex indicators reflect different aspects of the object under study, which causes difficulties in comparing the results obtained.
Customer loyalty is one of such complex and multifaceted concepts. There are different approaches to its classification in the works of scientists who have studied consumer loyalty1,2,3,etc.. The most commonly distinguished is behavioral (or transactional) loyalty. It considers changes in customer behavior, manifested in repeat purchases, an increase in the share of a brand in the volume of purchases, etc. and is perceived (perceptual, attitude-related), focusing on the subjective opinions of customers about the organization, trademark, brand following the satisfaction, interest, trust, sense of pride, etc. In addition, complex loyalty is considered, which is a combination of the two types mentioned above4. Within the framework of complex loyalty, several subtypes are distinguished, depending on the degree and form of its manifestation. They indicate true loyalty, latent and false, in this case, the attachment and positive attitude to the brand or company are assessed4. Another approach to the classification of complex loyalty allows us to distinguish four subtypes: active, cognitive, affective and conative5.
Given the variety of types of loyalty, the issue of their diagnosis and assessment of the level of customer loyalty is relevant, for which a number of methods have been proposed. To assess customer satisfaction, which is closely related to loyalty, the J.-J. Lamben method is used. It includes: an assessment of the importance/ degree of performance of attributes in a given company and in a competing company and the calculation of the "efficiency/importance" indicator6. The regularity of purchases is assessed using the Golubkov method, calculating the percentage of repeat purchases7. To assess the profitability of a client for a company, the client segmentation Ipsos Loyalty C3 model8 is used. As a result of tracking customer purchases, an RFM analysis is carried out, the purpose of which is to identify segments of the most valuable, permanent, developing, prone to outflow, leaving customers9,10.
The following indicators are established by the survey method: insensitivity to competitors, intention to recommend - NSP (Net Promoter Score))11,12, emotional involvement, CSI (Customer Satisfaction Index); method of needs’ segmentation13,14, Secure Customer Index2, the RAPID model allows to assess the consumer's willingness to continue to buy and recommend it to others, etc.
One of the most popular methods for measuring quality in the service sector is the Servqual method (service quality) based on comparing customer expectations related to service quality with the perception of actual services to customers15, as well as its modification - the Servperf method16.
The described methods are widely used in modern studies of consumer loyalty8,9,17,18,19,20,21,22, etc.
Considering that while studying loyalty, its different kinds (types) and aspects are considered, as well as the research toolkit is characterized by a significant variety of existing methods of its assessment, the problem of comparability of the results obtained also occurs. The solution to this problem, according to the authors, lies within determining the approaches that make it possible to move from the point values of its assessment to determining the range of customer loyalty.
The aim of the research is to determine approaches to ensure comparability of the results of assessing customer loyalty to a pharmacy and to determine the range of loyalty.
MATERIALS AND METHODS OF RESEARCH:
Given the multifaceted nature of customer loyalty (CL), which is characterized by various manifestations, and a large number of factors that affect it, as well as the various methods of its assessment, which reflect its most important aspects, it was necessary to assess the CL using adequate assessment methods of the perceived value and satisfaction with the pharmacy service.
To conduct research on the main aspects of CL to the pharmacy and to ensure the comparability of the results obtained, a research design was developed, in accordance with which the main stages of research were carried out:
· The choice of methods for assessing the CL;
· Selection of a single scale in points for the survey;
· Development of questions for the questionnaire;
· Development of a questionnaire, determination of the sample size and conducting a survey;
· Determination of a unified base for calculating relative indicators (in percent);
· Processing and analysis of survey results;
· CL assessment based on the results of the questionnaire;
· Determination of the CL range to the pharmacy.
The following methods were used to assess customer loyalty to the pharmacy: Net Promoter Score (NPS), customer satisfaction, customer segmentation method, and Servqual (service quality) method. However, the assessment of complex indicators, which are characterized by significant diversity, faces the problem of comparability of the results obtained. NPS allows you to establish the intentions (readiness) of clients to recommend the pharmacy in question to their environment on a 10-point scale.
Promoters are those respondents whose readiness to recommend is 9-10 points, critics - from 0 to 6 points. The Net Promoter Index (NPS) is calculated as the difference between the percentage of promoters and critics. In the method of assessing the degree of customer satisfaction, a 10-point scale was used with the allocation of five categories of satisfaction: 1-2 points - completely dissatisfied, 3-4 points - not satisfied, 5-6 points - neutral perception, 7-8 points - satisfied, 9-10 points - completely satisfied. The customer segmentation method was used to identify fully satisfied (loyal) customers among regular pharmacy customers and to determine their characteristics. The Servqual method was used to determine customer loyalty to a pharmacy based on their assessment of the quality of service. For this, the client's Perception-Expectation clause was used. Loyal customers are those whose perception of service quality exceeds expectations. Such clients are completely satisfied, as they perceive the service as being of high quality. The percentage of customers completely satisfied with the quality of service out of the total number of respondents shows the proportion of loyal customers to the pharmacy. This method (Servqual) made it possible to take into account the main components of the quality of service in a pharmacy, which affect customer loyalty, as well as the specifics of the industry.
To determine the sample size, we used an arbitrary method, in which a survey of 5-10% of the general population is sufficient. Considering the fact that there are on average about 2 thousand inhabitants per one pharmacy in Ukraine, a sufficient sample size is 200 respondents.
To conduct a study of CL to a pharmacy, a questionnaire was developed to assess the types of loyalty and another questionnaire to determine customer loyalty based on an assessment of the quality of service. The questionnaire for assessing types of loyalty included questions to get an idea of behavioral loyalty and emotional commitment, taking into account the selected research methods. To control the reliability of the respondents' answers, filter questions were used. The questionnaire for determining customer loyalty, taking into account the quality of service, includes questions reflecting groups of indicators in accordance with the Servqual method. The questions presented in the questionnaire made it possible to take into account the specifics of pharmaceutical activities. Due to the fact that the influence of factors on the perception of the pharmacy's customer service is not the same, the respondents were asked to rank both the groups of indicators themselves and all indicators for each group.
For the comparability of the results obtained for assessing customer loyalty, a 10-point scale was chosen as a single scale. The total number of respondents was taken as the basis for determining the percentage for all the resulting relative indicators, measured in percent, studied in this work, in order to ensure comparability of the results.
A survey of the pharmacy's clients was conducted, according to the developed questionnaires. Each respondent answered two questionnaires. The study was conducted by interviewing (f2f interviews) with the help of specifically trained interviewers. Visitors of the pharmacy in the trading floor were offered to answer the questions of the questionnaires during the work of the pharmacy in the presence of a free interviewer. The interview took place exclusively with the consent of the respondent. The survey covered all strata of visitors to the surveyed pharmacy by gender, age group and social status. Based on the results of the survey, 256 survey forms of each of the questionnaires were processed.
RESULTS AND DISCUSSION:
We have assessed the CL to the pharmacy. To determine customer loyalty, we focused on regular pharmacy visitors.
Let's analyze the category of regular customers of the studied pharmacy and determine the degree of their satisfaction from visiting the pharmacy. The analysis showed that the pharmacy in which the survey was conducted is constantly used by 43% of respondents. The average portrait of this group is working women between the ages of 25 and 60, with a family and children or grandchildren under the age of 12. Studies have shown that 35% of regular customers will not shift to another pharmacy if prices increase in the surveyed pharmacy, 34% of respondents will not go to a different pharmacy for purchasing necessary medicine if it is cheaper there. The foregoing indicates that practically the same answers were received on filter questions about the behavior of visitors in the event of an increase in prices in the surveyed pharmacy or a decrease in prices in other pharmacies. Among regular customers, 94% said that they plan to use this pharmacy in the future, 87% answered that they are always satisfied with purchases at this pharmacy, while 26% said that they rarely or never feel dissatisfied with the service. 78% of regular customers prefer the surveyed pharmacy over other pharmacies. It should be noted that only 22% of regular customers of the surveyed pharmacy do not visit other pharmacies.
Customer loyalty to the pharmacy depends on the level of their satisfaction with the service. It is not enough just to be satisfied with the service in order to be a loyal customer. Fully satisfied customers are the foundation of loyalty and long-term success in the pharmacy's operations. To determine the degree of satisfaction with the service in the studied pharmacy (with the allocation of five categories of satisfaction), the respondents were asked to conduct an assessment on a 10-point scale (Fig. 1).
The research results showed that among the regular customers the largest share falls on those who consider themselves completely satisfied with the service in this pharmacy - 56% (24% of the total number of respondents), they can be considered loyal. The share of simply satisfied among the regular customers of the pharmacy is 33% (13%), the share of other segments is insignificant.
Figure: 1. The degree of satisfaction of regular customers with the service in the pharmacy
Studies have shown that the majority of regular customers intend to recommend the pharmacy to their friends and acquaintances. 13% of regular customers (6% of the total number of respondents) were not inclined to recommendation (regular customers who gave an answer of 1-6 points). They belong to critics who are dissatisfied with the activities of the pharmacy and will not recommend it to their community, and may also give negative feedback (Fig. 2). The respondents who rated their willingness to recommend a pharmacy to their environment at 9-10 points belong to the category of promoters. The number of promoters among regular customers was 60% (26% of the total number of respondents).
Figure: 2. The willingness of regular customers to recommend the studied pharmacy to their community
Studies have shown that, compared with all respondents where promoters make up 50%, the willingness to recommend a pharmacy to their friends and acquaintances is significantly higher among regular customers (60%), which is one of the signs of their commitment and loyalty.
Among promoters in the segment of regular customers, 45% use only one pharmacy, two pharmacies are used by 40%, three or more - 15%; 40% of the promoters in the same segment will not shift to another pharmacy if prices increase in this pharmacy and will not go to buy the necessary medicine at another pharmacy if it is cheaper there. This indicator exceeds the similar indicator for the entire sample by 14%.
97% of promoters intend to use the pharmacy in question in the future, 94% of them are always satisfied with the purchase, 88% prefer the studied pharmacy over others located in the same area, the same percentage of promoters visit other pharmacies, while 77% of them seek to find out the price level or see the range of pharmacy products. All of the above indicators indicating customer loyalty are higher for promoters than for the segment of regular customers as a whole. Figure: 3
Figure: 3. Comparison of loyalty indicators of regular pharmacy visitors with promoters among them
Based on this research, the results of which are presented in Fig. 2, the index of willingness to recommend (NPS) a pharmacy by regular customers was calculated, which was 47% (20% of the total number of respondents). Thus, among the regular customers, 20% of the total number of respondents are loyal to the surveyed pharmacy.
Fully satisfied customers represent the greatest interest among the regular customers of the pharmacy in terms of assessing their loyalty, since they are loyal to this pharmacy. We have segmented the pharmacy visitors in order to identify loyal ones and determine their characteristics, taking into account the types of loyalty. Fig. 4 shows the segmentation of regular customers of a pharmacy who are completely satisfied with its service, who rated their satisfaction at 9 or 10 points on a 10-point scale. Such customers can be seen as loyal to the pharmacy.
The analysis of the segmentation of regular customers of the pharmacy showed that completely satisfied customers are ready to recommend the pharmacy to their environment and are ready to use its services in the future, and are always satisfied with the purchase in 97% of cases. All fully satisfied customers make repeat purchases. Among them, 71% have been using this pharmacy for more than 3 years.
Thus, the segmentation showed that completely satisfied regular customers (24% of the total number of respondents) almost all recommend the pharmacy to their environment, and are also ready to use its services in the future, and also make repeat purchases, which indicates their loyalty.
Given the different categories of customers in terms of the degree of loyalty to the pharmacy, each segment of customers requires a differentiated approach concerning them, and the activity of pharmacies should focus on the most attractive segments in terms of loyalty to form long-term relationships. In our research, these are fully satisfied regular customers.
To assess loyal customers using the Servqual method, an analysis of the Servqual-gap between perception and expectations of the quality of customer service in a pharmacy was carried out. Research has shown that the Servqual-gap in the quality of customer service in a pharmacy ranges from -5.15 to +2.68. Customers whose perception of the quality of service at the pharmacy equals or exceeds expectations (≥0) account for 16.5%. The level of satisfaction with the service of these customers can be interpreted as complete satisfaction, as their perception exceeds expectations. Customers who are completely satisfied with the service are loyal to the pharmacy. Thus, the conducted studies have shown that the number of customers loyal to the pharmacy, calculated on the basis of the Servqual method, is 16.5% of the total number of respondents.
To ensure comparability of the results of studies carried out on the basis of the three methods, the total number of respondents was taken as the basis for determining the percentage. A generalization of the results of the assessment of CL for the studied pharmacy is shown in Fig. 5.
To sum up, it should be said that fully satisfied regular customers make up 24% of the total number of respondents; NPS - 20%; according to the Servqual method, 16.5% of clients demonstrate loyalty to the pharmacy.
Figure: 4. Segmentation of regular customers of a pharmacy who are completely satisfied with its service (he percentage of all respondents is indicated in parentheses)
Figure: 5. Generalization of the results of the study of the customer loyalty to the pharmacy, obtained using the selected methods
Since the obtained research results are comparable, this allows us to speak about the range of customer loyalty to the pharmacy, which, taking into account the selected research methods, ranges from 16.5% to 24%.
The article shows the possibility and feasibility of using a set of methods for assessing customer loyalty to a pharmacy, which reflect its individual components or a list of them and allow obtaining comparable results and assessing its range. The conditions for ensuring the comparability of the results are determined These include the choice of a single scale in points for conducting a survey (in our case, a 10-point scale) and the determination of a single base for calculating relative indicators (the total number of respondents). To assess customer loyalty to a pharmacy, three methods were used to assess its main aspects. The use of the Servquаl method showed that 16.5% of customers from the total number of respondents can be considered loyal. Based on the Net Promoter Score, 20% of customers show loyalty. Based on customer satisfaction scores, 24% of fully satisfied customers can be considered loyal. Ensuring the comparability of the results obtained allowed us to determine the range of customer loyalty to the pharmacy, which, taking into account the selected research methods, ranges from 16.5% to 24%.
1. Day G. S. A two-dimensional concept of brand loyalty. Journal of Advertising Research. 1969; 9(3): 29-35.
2. Guest L. A study of brand loyalty. Journal of Applied Psychology. 1944; 28(1): 16–27.
3. Reichheld F. F. The one number you need to grow. Harvard Business Review. 2003; 81(12): 46-55.
4. Dick A. S., Basu K. Customer loyalty: Toward an integrated conceptual framework. Journal of the academy of Marketing Science. 1994; 22 (2): 99-113.
5. Oliver R. L. Whence consumer loyalty? Journal of Marketing. 1999; 63 (4): 33-44.
6. Lambin J.-J. Market oriented management / Per. from English ed. V.B. Kolchanov. Saint Petersburg: Peter, 2004: 800.
7. Golubkov E.P. Marketing research: theory, methodology and practice. M .: Finpress, 2000: 365.
8. Luneva EA, Gorbunova AV Comprehensive Assessment of consumer loyalty (on the example of a company in the fast food market) // Bulletin of OmSU. Series: Economics. 2006; 4. Available from: URL: https://cyberleninka.ru/article/n/kompleksnaya-otsenka-potrebitelskoy-loyalnosti-na-primere-kompanii-na-rynke-bystrogo-pitaniya
9. Prasojo Pribadi, Susi Ari Kristina , Suci Paramitasari Syahlani, Satibi. The empirical test of pharmacist-patient relationship model in hospital pharmacy practice: Indonesia context. Research J. Pharm. and Tech. 2019; 12(10):4623-4627. doi: 10.5958/0974-360X.2019.00795.9
10. Guest L. Brand loyalty—twelve years later. Journal of Applied Psychology. 1955; 39 (6): 405–408.
11. Reichheld F. F., Schefter P. E-loyalty: your secret weapon on the web. Harvard Business Review. 2000; 78 (4): 105-113.
12. Sudhahar J., Israel D., Britto A., Selvam M. Service. Loyalty Measurement Scale: A Reliability Assessment / American Journal of Applied Sciences. 2006; 3(4): 1814-1818. Available from: URL: http://thescipub.com/PDF/ajassp.2006.1814.1818.pdf
13. Hofmeyr J., Rice B. Commitment-Led Marketing. The Key to Brand Profits is in the Customer's Mind. N-Y. : John Wiley & Sons. 2000; 320.
14. Coussement K., Bossche V., Bock K. Data accuracy’s impact on segmentation performance: Benchmarking RFM analysis, logistic regression, and decision trees. Journal of Business Research. 2014; 67 (1): 2751-2758.
15. Parasuraman А. et al. A Conceptual Model of Service Quality and Its Implications for Future Research The Journal of Marketing. 1985; 49(4): 41-50
16. Cronin Jr, J. J., & Taylor, S. A. (1994). SERVPERF versus SERVQUAL: reconciling performance-based and perceptions-minus-expectations measurement of service quality. The Journal of Marketing. 1994; 58. (1): 125-131.
17. Howieson B. Quis Auditoret Ipsos Auditores? Can Auditors Be Trusted? Australian Accounting Review. 2013; 23(4): 295-306.
18. Kuronen M., Takala J. Measuring and Developing Customer Satisfaction with the Balanced Critical Factor Index Method. Available from: URL: http://www.toknowpress.net/ISBN/978-961-6914-07-9/papers/S4_236-244.pdf
19. Muravskaya SA, et al. Approaches to managing consumer loyalty: perspective "3D" // Bulletin of St. Petersburg University. Management. 2019; 1. Available from: URL: https://cyberleninka.ru/article/n/podhody-k-upravleniyu-potrebitelskoy-loyalnostyu-perspektiva-3d
20. Pestun I. V., Mnushko Z. M., Ievtushenko O. M.. Marketing research of the Pharmaceutical market in Ukraine: Peculiarities, Trends, Problems, Tendencies. Research J. Pharm. and Tech. 2019; 12(4):2049-2054. doi: 10.5958/0974-360X.2019.00339.1
21. Rejikumar. G, Aswathy Asokan. A, Gopi Kumar. V. Pharmaceutical Marketing: Directions for Customer Orientation. Research J. Pharm. and Tech 2018; 11(8): 3283-3289. doi: 10.5958/0974-360X.2018.00604.2
22. Verhoef P. C., Lemon K. N., Parasuraman A., Roggeveen A., Tsiros M., Schlesinger L. A. Customer experience creation: Determinants, dynamics and management strategies. Journal of Retailing 2009; 85(1): 31-41.
Accepted on 28.12.2021 © RJPT All right reserved
Research J. Pharm.and Tech 2022; 15(4):1527-1532.