FORMING CUSTOMER SATISFACTION INDEX BASED ON

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CUSTOMERPERSPECTIVE IN PERFORMANCE MANAGEMENT FOR

TUNEECA, ASTART-UP FASHION ONLINE BUSINESS

Adlina Abtaliana

, Innayah Nurlia Roza

, and Selvia Herlina

abc

Bandung Institute of Technology (ITB),Bandung, Indonesia

Corresponding email: adlina.abtalia[email protected]

Abstract

This research paper aims to form the customer satisfaction index based on customer

perspective in performance management.as organizational result for Tuneeca. The

framework used as basic literature is integrated performance management system (IPMS).

This research focuses only on forming customer satisfaction index asorganisation result from

IPMS framework. The satisfaction will be reviewed based onservqual (service of quality)

attributes such as tangible, reliability, responsiveness, assurance and empathy. Search on the

vision, mission and objectives will help determine the strategy and generate customer

satisfaction index suitable for Tuneeca. Primary data from an interview shows that Tuneeca

mainly focuses in reaching their vision to become fashion Muslim trendsetter in Indonesia,

concerning themselves with customer satisfaction as their non-financial aspect. In fact, since

Tuneeca was established (2008), the company did not know how satisfied customers were

towards the products.Tuneeca needed to measure customer satisfaction index to determine

whether the Tuneeca product is satisfactoryor not for customer.In thisresearch 82 Tuneeca

customers were used as respondents. Based on result, most of respondent are satisfied with

product quality and performance. Then, Tuneeca, according to customers, already has a

unique product and a trendsetter in the fashion Muslim industry. Finally, Tuneeca needs to

perform weighting on each of the indicators that will shape customer satisfaction. Weighting

of indicators can be carried out by top management levels of Tuneeca. This paper presents as

an original and novel approach to designing and benchmarking of IPMS for a manufacturing

environment.

Keywords: Customer Satisfaction, Customer Perspective, Fashion Online Business,

Performance Management, Tuneeca

1. Introduction

At this Time, Performance management in start-up Company is needed for managers and

employees to plan, monitor and review an employee’s work objectives and all contribution to

the organization. Performance management is about a continuous process of identifying,

measuring, and developing performance in organizations by linking each individual’s

performance and objectives to the organization’s overall mission and goal (Aguinus, 2011).

Today, companies are recognizing the important of defining strategic objectives based on

current and future market requirements by developing performance measurement system or

PMS (Wibisono, 2014).

PMS is not only relate to measuring a company’s performance, but also reflects its

organization culture and philosophy (Wibisono, 2014). By using PMS, we can describe how

great the company performs in financial terms by use of non-financial indicators. PMS also

focuses on customer satisfaction, as a company tries hard to keep long life business and

competitiveness. Based onthe customer satisfaction result, the company will know the

product characteristic or services elements necessary to remain competitive. Implementing

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PMS that cover internal-external performances, a company can increase their customer

satisfaction.

Nowadays, Customer satisfaction is considered by many industriesin order to develop,

manage and control their business. Customer satisfaction is about the customer’s evaluation

of a product or service in terms of whether that the product or service has already met their

needs and expectations (Zethaml, 2000).The dissatisfaction with a product or service is the

result from failure’s industry to meet needs and customer’s expectations.

Customer satisfaction is very important, not only for big companies, but also for Start-up

Company. As a start-up company, the products and services being offered still has many

shortcomings. Therefore, customer satisfaction with products and services is needed as the

reference companies to continuously improve their product or service quality. It is important

to monitor customer satisfaction, and correct any problem areas. Customer satisfaction has

high impact with the company profitability. Satisfied customers will have high loyalty, and

these customers will increase repeated purchase, so it will impact towards the company’s

market share.

Many industries especially in the fashion industry try hard to find how much score they have

from customer satisfaction index. Customer satisfaction in the fashion industry influenced

by fashion model, price, colors, quality of raw material and service quality (Jenefa,

2014).Measuring customer satisfaction index provides an indication of how successful the

start-up company to provide products or services to the market place.It is also important for

measuring company’s integrated focus on the end goal (Wibisono, 2014).

Indonesia fashion industries have grown in the 1990’s and has been changed annually

according to the mode. However, clothes distribution, which is usually sold in boutiques,

outlets or department stores, now distributes online with websites and online stores to

display the products. Focusing on visual sensory perception only, online store has to embed

with interaction service to satisfy their customer. Marketing communication through online

ads and online store appearance sometimes become the key to success on fashion online

competition.

Tuneeca is a hijab fashion company with online distribution focusing their store on website.

Tuneeca pricing is categorized as premium product with price ranging from 500-1000 K per

piece. However, with this premium product, Tuneecahopes to be able to consistently

holdtheir position as a trendsetter through online distribution. It is seen from their fast sales

over a time period on every catalogue launched by Tuneeca. This condition brought Tuneeca

as a most awaiting product and the company under PT Bina Fajar Estetika tries to launch

upcoming catalogue teasers through Facebook updates status and Youtube video.

2. Research Problem

Tuneeca is a brand that manufactures Muslim Fashion in Indonesia that had modern and

ethnic models. Tuneecawasfirst established into the Indonesian market in 2008. An

Interview with a key informant revealed that Tuneeca had large market size either in

Indonesia or overseas. To support the growth of the company, Tuneeca started to apply

performance management inside the company in an internal process perspective by

compensation model in 2009. This performance management is unable to conduct in an

internal process based onboth resources availability and non-financial organizational result.

Primary data from interview shows that Tuneeca mainly focuses in reaching their vision to

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become Muslim fashion trendsetters in Indonesia, concerning themselveswithcustomer

satisfaction as their non-financial aspect. (Bafagih, 2015)

However, since Tuneeca was established, they did not know how satisfied customers were

towards the products. There is a big question on how satisfied customer of Tuneeca The

effect might be felt as an excellent progress, but will it last longer and continuously build

brand image, as expected by the company. To answer this question, this research will form

customer satisfaction index by focusing to identify and to analyze the quality of service

consist of TERRA (Tangible, Empathy, Reliability, Responsiveness, and Assurance) and to

explore customer satisfaction index at Tuneeca. This study will be able to show satisfaction

levels in each indicator, analyze relations of each indicator in forming the company vision (in

this case Tuneeca as trendsetter), and perform weighting suggestion for each indicator as

customer satisfaction index guideline while conducting customer satisfaction index

periodically.

3. Literature Review

At this time, framework of performance management systems has been widely adopted by

many companies. Framework that exist today is SMART, Performance Measurement

Questionnaire, Performance for World Class Manufacturing, Quantum Performance

Measurement Models, the Balance Scorecard, and Performance Prism, and Malcolm

Baldrige National Quality Award.All framework does not have a comprehensive performance

measurement (Wibisono, 2012). The performance management system that was developed

in the western world is not appropriate if applied to companies located in Indonesia. It is

because of the differences in government regulations, resources, skills and knowledge

workers who need a detailed guide.In this study, the performance management system

framework used,Integrated Performance Management System(IPMS) wasdeveloped by Prof.

DermawanWibisono Ph.D.

IPMS can translate company vision into a strategy that is used as an objective for every

department of the company's operating level. Thus, the management is able to monitor and

control whether the strategy during this run has been able to achieve the company's vision.

The impact is the company is now able to compete in the business world. IPMS is suitable to

be applied to companies operating in Indonesia, such as manufacturing, services, private

industry and government. IPMS concept can be useful to enhance the competitiveness of

Indonesia in the international world.IPMS’s perspective can seen in table 1.

Table 1: Perspective of performance management system

Source: (Wibisono, 2012)

The IPMS concept that was created by Prof. Dermawan has three perspectives measurement:

organizational result, internal business processes and resource availability.Every perspective

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has different aspects. Organizational result consists of the financial aspect and non-financial

aspect. The internal process consist of innovation aspect, operational aspect, marketing

aspect, and after sales aspect. And the resource capability consist of human resources aspect,

technology resource and infrastructure, and organizational resource aspect.In this research,

the authors focus only on organizational result, especially in non-financial aspect.

While non-financial performance variables are of concern for the customer, society and the

government are concerned with regards to the interests of each (Wibisono, 2012).

Companies must be able to meet the needs and desires of stakeholders, especially customers.

The variable performance related to customers can be classified in several aspects including

customer satisfaction, customer retention, customer acquisition, customer profitability,

market share and account share. Customer satisfaction has been linked to customer

retention and new customers will be acquired through the promotion or advertising.

Through customer retention, companies can increase the share account. Thus, companies

can increase profits.

Customer satisfaction with the service quality of a company can be measured by customer

satisfaction surveys. With a customer satisfaction survey it can be seen the extent to which

companies provide satisfaction products or services that have been offered to customers.

According to Parasuraman et al. (1990,) there are five dimensions of service quality that is

known as servqual (service of quality). The fifth dimension of the quality of these services

include:

1) Reliability, ability to perform service dependably and accurately.

2) Responsiveness, reflect a desire to help customers and provide fast and precise.

3) Assurance, ability of staff to inspire confidence and trust.

4) Empathy, a caring, individualized attention or service for customers.

5) Tangible, a form of physical facilities, equipment, staff appearance, etc.

4. Methodology

Qualitative, quantitative survies and key informant interview were used in the customer

satisfaction Tuneeca study. An interview with Ibrahim Bafagih, as Tuneeca’s director, was

conducted to give a picture of customer position in Tuneeca performance. The survey will

help to analyze which attributes satisfy most and which attributes contributes least. Analyzed

survey result will perform by SPSS to see correlation of each attributes and their contribution

in customer satisfaction. Each attributes will also see by how much it drives to bring Tuneeca

become contemporary fashion Muslim in Indonesia.

In this study, the author used two types of data to collect information about customer

satisfaction against of Tuneeca, primary data and secondary data. Primary data is original

data that has been collected for the first time. Primary data has not been published yet and is

more reliable, authentic and objective. In this study, the primary data was obtained through

questionnaires method. Secondary data is the data has been already collected by and readily

available from other sources. It means that secondary data is being reused. Secondary data

are more quickly obtainable than the primary data. This secondary data can be obtained

from many sources, including literature, study case, journals, books, and university library.

Collecting Data Method

An Online questionnaire was used in this research to collect the primary data. Questionnaire

was distributed through email and google spredsheet to all customer and agent of Tuneeca.

The questionnaire consists of 20 questions based on attributes related to customer

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satisfaction Tuneeca. This question is driven from servqual context and in this research and

the questions focus on which customer satisfaction attributes Tuneeca will achieve.

Total sample filling the questionnaire is 82 respondents, who already made a purchase of

Tuneeca products, such as direct consumer and agent. Since it was online questionnaire,

respondents came from nationwide.

According to Kasmadi and Sunariah, Likert scale is psychometric scale commonly used in

questionnaires, and is the most widely used scale in survey research. When responding to a

questionnaire item, the respondent specified their level of agreement or disagreement from

series of statements. Thus, the scale capture the intensity of their feeling scale for a series of

statements. The author used a Likert scale developed by Rensis Likert to measure the level of

customer satisfaction on Tuneeca’s customer performance. Likert scale is a scale used to

attitudes, opinions and perceptions of a person or group of persons of a particular

phenomenon. This scale is widely used because it is easily made, are free to enter a statement

of relevant, high reliability, and applicable in a variety of applications.

However, the likert scales tend to suffer from acquiescence bias when used for satisfaction

surveys unless around half of the statements are negatively biased, which tends to be

politically unacceptable. In practice, disagreement position tends to be a problem in

customer satisfaction index due to some company very reluctant to use strong negative

statements for example disagreement for restaurant might means the service was very slow

or restaurant was filthy. To reduce this bias, interval scales use numbers should be used to

distinguish the points on the scale. They are suitable for most statistical techniques because

they do permit valid inferences concerning the distance between the scale points (Nigel Hill,

2007). Questions were measured using a Likert Scale of 1-5 presented using interval scales.

As shown in Figure z, respondent will not read each scale meaning and focus on the

numerical scale.

Supplementary Material Strength on Products

Zipper/button/belt not easy to break

Strongly Strongly

Dissatisfied Satisfied

Figure 1: Likert scale presented using interval scales

Likert Scale Calculations

To interpret the value on each Likert scale, number of respondent’s answer divided by total

respondents and present in percentage. Satisfaction index of each attributes is then

measured from each Likert scale percentage multiplied by Likert scale point and divided by 5

as total Likert scale

The Likert scale point:

1 = strongly dissatisfied

2 = dissatisfied

3 = undecided or neutral

4 = satisfied

5 = strongly satisfied

The interval satisfaction index:

0% - ≤ 20% = strongly dissatisfied

20% - ≤ 40% = dissatisfied

40% - ≤ 60% = neutral

60% - ≤ 80% = satisfied

80% - ≤ 100% = strongly satisfied

Validity and Reliability Test

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Before conducting analysis, all data must be valid and reliable proven. Validity test are

conducted using Person’s Product Moment formula. If any of Person formula results in av

number under 0.3, the indicators are categorized as invalid indicators and should not be

analyzed further. Table 2 shows the validity factor analysis test results which have done with

SPSS of each indicator in this questioner and shows that 15 of 20 indicators are valid. The

invalid indicators are product design, product variable, ease of getting updated product and

delivery timeline. This validity test measured by a software, IBM SPSS Statistic 22.

Table 2. Validity Test

Component

Comfortability

.219

.596

.220

Price compare competitor

-.035

.657

.550

Material strength

.428

.431

-.408

Ease of Payment

.737

.223

.305

Stitched quality

.111

.730

-.021

Payment info clarity

.676

.277

.383

Color quality

-.022

.804

.074

Problem service

.775

.119

.053

Fabric quality

.228

.783

.103

Hospitality service

.904

.104

-.072

Product conformity

.215

.245

.690

Product knowledge

.814

.061

-.025

Ease of Getting Product

.543

.175

.376

Service speed

.865

-.010

.059

Price suit quality

.130

.693

.439

The reliability of a questionnaire is largely a function or a result of the aforementioned

issues. On the other hand, reliability is the extent to which a measure or an entire survey

yields the same result on repeated trials, or simply how well the observed satisfaction scores

are related to the true satisfaction score. Since in this study, customer satisfaction surveys

the true level of satisfaction is unknown, it is not possible to calculate the correlation

between the observed and the true scores. Using Cronbach’s alpha, reliability is calculated

using the variance of individual items and covariance’s between the items. It is found that

the researcher is reliable for the value of Cronbach’s alpha reaching more than 0.6 (Kasmadi,

2014). This validity test measured by a software, IBM SPSS Statistic 22.

Table 3: Reliability Statistic

Cronbach’s Alpha

N of Items

0.881

1. Data Analysis

After all data has been validated by validity and reliability test, the survey data now could be

analyzed. The whole questionnaire is divided into three parts. The first part is the

respondent background information. The second part is customer satisfaction based on

Servqual attributes which are tangible, reliability, responsiveness, assurance, and empathy.

Then, the third part is customer perspective of Tuneeca as a brand and their desired brand

image conducted by open question.

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Summary of Customer Satisfaction Survey

Figure 2: Demographic of Respondents

In total, 82 respondents participate in this customer satisfaction survey. Respondents are

dominated with age ranging from 25 years old and above. Whole respondents are women

and most occupations are housewives and employees. Meanwhile, the respondent’s income

dominates between 2 until 5 million rupiahs. Table 4 shows summary Customer satisfaction

survey.

Table 4: Summary of Customer Satisfaction Survey

Criteria of Servqual

Service Quality

Attributes

Strongly

Dissatisfied

Neutral

Satisfied

Strongly

Satisfied

Satisfaction

Index

Tangible

TA1

Comfortability

1.20%

3.70%

17.10%

43.90%

34.10%

81.22%

TA2

Materialstrength

0.00%

2.40%

14.60%

47.56%

35.40%

83.17%

TA3

Stitchedquality

0.00%

1.20%

19.50%

42.70%

36.60%

82.93%

TA4

Colorquality

2.40%

7.30%

41.50%

36.60%

12.20%

69.76%

TA5

Fabricquality

1.20%

29.30%

42.70%

23.20%

76.59%

Reliability

RA1

Productconformity

0.00%

7.30%

52.40%

40.20%

86.59%

RA2

Ease of Getting Product

0.00%

6.10%

24.40%

35.40%

34.10%

79.51%

RA3

Pricesuitquality

2.40%

9.80%

29.30%

40.20%

18.30%

72.44%

RA4

Pricecomparecompetitor

1.20%

8.50%

24.40%

47.60%

18.30%

74.63%

Responsiveness

RS1

Ease of Payment

0.00%

13.40%

35.40%

51.20%

87.56%

RS2

Paymentinfoclarity

0.00%

13.40%

31.70%

54.90%

88.29%

RS3

Problemservice

1.20%

17.10%

31.70%

48.80%

85.12%

RS4

Servicespeed

0.00%

22.00%

28.00%

50.00%

85.61%

Assurance

Hospitalityservice

0.00%

15.90%

32.90%

51.20%

87.07%

21-25

25-30

30%

30-35

38%

Less

than

21 yo

Than 35

22%

AGE

Hous

ewive

40%

Empl

oyee

38%

Colle

Stude

Busin

essm

18%

OCCUPATION

2milio

n IDR

20%

10milli

on IDR

13%

5 million - 10 million

21%

million

- 5

million

46%

INCOME

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Productknowledge

0.00%

13.40%

41.50%

45.10%

86.34%

Empathy

Creativity and

uniqueness as

Trendsetter

0.00%

4.90%

18.30%

76.80%

94.39%

Figure 3: Customer Satisfaction Index in Tuneeca

Summary of Customer’s Consideration

At the end of the questionnaire, respondents are asked to fill improvement consideration in

open question. Table 5 shows summary of customer suggestion for Tuneeca improvement.

Consideration are categorized based on each suggestion topic.

Table 5: Summary of Improvement Consideration from Customer

Topic

N of Respondents

Improvement Consideration

Price

30.49%

Prices are too expensive

Fabric

28.05%

Fabric that is too hot to use, furry clothing material, fade color easily

Design

14.63%

Color matching, various design, wudhu friendly arm, simple but

elegant design

Size

7.32%

Inconsistent size, enlarge bottom stitching fold

Stitched

4.88%

Seam less strong, especially in small stitches

Complaint Handling

4.88%

Responsiveness in reply complaint

Product Lifecycle

3.66%

Time between catalogue launch is very close

Information

2.44%

Cutting information, color clustering in website

Public Relation

1.22%

Communication between agent and headquarter

Payment Type

1.22%

Credit Card payment type

Marketing

1.22%

Brand awareness

Total

100.00%

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Regression Analysis

In order to understand what variables drive Tuneeca to become fashion Muslim trendsetter

in Indonesia, regression analysis was needed to be calculated. Regression analysis will

provide relationship between two or more variables by looks at the statistical dependence

between a dependent variable and one or more independent variables, and tries to forecast

the impact of a change in the independent variables on the dependent variable. (Szwarc,

2005)

Table 6: Model Coefficients

Model

Unstandardized

Coefficient

Standardized Coefficient

Std. Error

Betta

Sig.

(Constant)

4.720

.055

85.999

.000

SERQUAL 1

.094

.055

1.706

.092

SERQUAL 2

.207

.055

3.750

.000

SERQUAL 3

.116

.055

2.106

.038

a. Dependent Variable: Tuneeca

The regression above measured by a software, IBM SPSS Statistic 22. For the model (Table

6), the levels of significance showed that only one variable are not significantly, namely

trendsetter influence with the SERQUAL 1 (Sig >0.05). As can be seen in Table 6, trendsetter

influence with the SERQUAL 2 had the greatest contribution to the final model (B=0,207)

and follow by trendsetter influence with SERQUAL 3 (B=0,116). Thus:

 SERQUAL 1has no significant impact on Tuneeca trendsetter of fashion muslim

 SERQUAL 2 has significant impact on Tuneeca trendsetter of fashion muslim

 SERQUAL 3 has significant impact on Tuneeca trendsetter of fashion muslim

SERQUAL attributes taken from validity test (Table 2), which SERQUAL categorized by

highest score in each attribute. Thus:

Table 7: New Criteria toward Trendsetter Influence

SERVQUAL 1

Service Quality

SERVQUAL 2

ProductQuality

SERVQUAL 3

Performance

 Material strength

 Ease get product

 Ease of payment

 Payment info clarity

 Problem service

 Hospitality service

 Product knowledge

 Service speed

 Comfortability

 Stitched quality

 Color quality

 Fabric quality

 Price suit quality

 Price compare

competitor

 Product conformity

The result of there was no significant in quality servicewith Tuneecaas fashion Muslim

trendsetterbeingvery logically. Additional open question in the questionnaire, namely "what

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do you think about Tuneeca products?" showed that the most mentioned had no answers

linkage to quality service attributes. It is proven that between open question and interval

scales question, they are interconnected. Meanwhile, quality product and performance can

be considered by management to improve Tuneeca product to support the vision as fashion

Muslim trendsetter in Indonesia.

Customer Satisfaction Variable Weighting using AHP

In order to gain customer satisfaction degree as the final score of customer satisfaction,

which will be evaluated periodically, Tuneeca needs to gain weighting of each indicator

which formed customer satisfaction. Indicators weighting could be done by interviewing

experts for ease of change following market changes but the weighting score will be

mentioned subjectively. This subjective result of course will be different if the top level

management changes, unstandardized weights will be questionable for company audit later

(Marr, Schiuma, & Neely, 2004). Furthermore, if managers get it wrong, weighting as the

index would not fully reflect the real indicators of an organization.

This study employed correlation to value the weights of indicators (Szwarc, 2005). As the

result of regression, only categories who has significant impact that will be used as customer

satisfaction index. Quality service criteria Total 7 indicators are studied to gain the weight in

forming Tuneeca customer satisfaction score performed in Figure 4.

Table 8: Inter-item Correlation Matrix

Comfort ability

stitching Quality

Color quality

Fabric Quality

Price suit quality

Price compare

competitor

Product

conformity

Tuneeca as

trendsetter

Comfortability

1.00

Stitching Quality

0.37

1.00

Color quality

0.37

0.43

1.00

Fabric Quality

0.45

0.55

0.62

1.00

Price suit quality

0.50

0.43

0.55

0.56

1.00

Price compare competitor

0.49

0.38

0.52

0.49

0.74

1.00

Product conformity

0.31

0.29

0.32

0.41

1.00

Tuneeca as trendsetter

0.37

0.21

0.33

0.28

0.31

0.49

0.35

1.00

Figure 4 Customer Satisfaction Indicator Weighting

CSI

Quality Product

(85%)

Price compare

competitor

(20.97%)

Comfortability

(15.64%)

Color quality

(14.15%)

Price suit quality

(13.01%)

Fabric quality

(12.13%)

Stitching quality

(9.12%)

Performance

(15%)

Product

Conformity(15%)

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ThTuneeca customer satisfaction degree will be presented in this formulation(Gupta &

Srivastava, 2011):

  







  





Where:CSD - Customer Satisfaction Degree

Wi - weight of indicator i

Xi - Average score of variable I from customer’s evaluation, called as customer

satisfaction index in each variables

Conclusion

This research study shows that Tuneeca customer are 38% of women with 30-35 years old,

40% are housewives, and 46% have an income with range of 2-5 million per month. Mostly,

Tuneeca customers are satisfied with the product quality, service quality, and clarity of

payment information. Based on 30.49% of respondents, price offered by Tuneeca still

considered expensive. This is a reference to Tuneecain providing high quality of product and

services to consumers at an affordable price.Thus, Tuneeca hasthe opportunity to become

cost leadership in the fashion Muslim onlineshop.

Based on the results of SPSS stated that product quality and performance of the company

(product conformity) influence against Tuneeca as a trendsetter of fashion Muslim. These

results are very important for Tuneeca to improve the quality of products and produce

unique products that can be consistent as a trendsetter fashion Muslim. However, the results

of SPSS showed that there was no significance between service quality against Tuneeca as a

trendsetter. It could be argued that less Tuneeca provide the best quality service to its

customers. This becomes a big task for Tuneeca to improve the quality of service to

consumers.

Tuneeca customer satisfaction surveys are to be conducted regularly or periodically to

evaluate the overall performance of Tuneeca. So, formation of the indicators in the survey of

customer satisfaction is very important to do it correctly. In the establishment of indicators,

Tuneeca needs to perform weighting on each of the indicators that will shape customer

satisfaction. Weighting of indicators can be carried out by top management level Tuneeca.

Acknowledgement

This research was financially supported by IndonesiaEducation Fund Management

Institution (LPDP). We thank to Professor Dermawan Wibisono from Institute from

Bandung Institute of Technology (ITB) who provided insight and expertise that greatly

assisted these research study.

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