Customer satisfaction study via a latent segment model

The aim of this study is to apply a new conceptual model, and a new technique as an approach to the modelling of customers’ satisfaction, and to develop an overall satisfaction index (OSI). This study evaluates customers’ satisfaction of a certain public organization service, and argues that in order to estimate the global customers’ satisfaction measure we must appeal to methodologies recognizing that satisfaction must be understood as a latent variable, quantified through multiple indicators. Thus, it is natural that we consider the latent segment models (LSM) approach to proceed to the evaluation of customer's service satisfaction. As a result of these models estimation, we selected a three latent segment model, that is to say, the latent variable customer satisfaction has three classes: segment 1, with 50.4 percent of the customers, that represents “The Very Satisfied†, for those to whom everything is very well in the organization service; a segment 2, with 33.4 percent of the customers, representative of the “The Well Satisfied†, not totally satisfied with the quality of the organization, and a segment 3, with 16.2 percent of the customers, “Satisfaction Demanders†, thinking that organizational quality can be improved. Finally, we developed an overall satisfaction index which is important to show how the company as a whole is performing.