Even if satisfaction does not automatically lead to loyalty why might it be important to nevertheless aim to achieve well-satisfied clients?
Satisfied customers buy more as the company introduces new products and upgrades existing products, they talk in favour of the company and its products, they pay less attention to competing brands and are less sensitive to price. The link between customer satisfaction and customer loyalty however is not proportional. Suppose customer satisfaction is rated on a scale from one to five. At a very low level of customer satisfaction (level one), customers are likely to abandon the company and even bad-mouth it. At levels two to four, customers are fairly satisfied but still find it easy to switch when a better offer comes along. At level five, the customer is very likely to repurchase and even spread good word of mouth about the company.
Companies regularly lose some percentage of their satisfied customers. Even if customer satisfaction does not automatically lead lo loyalty, it should still be considered as both a goal and a marketing tool. The company is able to gauge the effects of its marketing strategies on sales and profits and to identify areas where improvements in performance can lead to improved quantitative results. Most companies pay more attention to their market share than to their customers’ satisfaction, which is not correct. Market share is a backward looking metric; customer satisfaction is a forward-looking metric. If customer satisfaction starts slipping, then market share erosion can soon follow. Companies need to monitor and improve the level of customer satisfaction. By constantly monitoring customer satisfaction, it ensures that growth strategy never compromises service and satisfaction levels.
Product and service quality, customer satisfaction, and company profitability are intimately connected. Higher levels of quality result in higher levels of customer satisfaction, which support higher...