Volume 15, Number 3 Article by Ramesh Venkateswaran September, 2003
A Customer Satisfied is Not a Customer Retained :
Customer satisfaction is perceived as the key to competitive strategy and profitability. However, today, even satisfied customers migrate to other products and services. In a market that is cluttered with brands and where consumer expectations, needs and attitudes are constantly changing, how does one retain customers and build loyalty? The focus, Ramesh Venkateswaran says, must shift from measuring customer satisfaction to customer retention equity by understanding the dynamics of customer loyalty, migration and defection.
Customers tend to remain loyal to a brand because of the emotional bond, objective assessment or inertia. On the other hand, customers may migrate because of changing needs and lifestyles or dissatisfaction with the existing product or service.
Customer retention programmes should aim at maximising the likelihood that the customer will return for the next purchase, maximise size of future purchases, and minimise the chances of defection through communication, relationship management, and constant updating of products and services to meet changing needs.
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