why satisfied customers defect ??

By:Krupanshu Hemani(16)Shreyansh Kejriwal (26)Ambarish Kulkarni(27)Devashree Kumar(28)

Vishesh Saran(58)

The gulf between satisfied customers and completely satisfied customers can swallow

a business……HOW???

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Complete customer satisfaction is the key to securing customer loyalty and generating superior long-term financial performance

Even in markets with relatively little competition, providing customers with outstanding value may be the only reliable way to achieve sustained customer satisfaction and loyalty

Very poor service or products are not the only cause- and may not even be the main cause – of high dissatisfaction

Different satisfaction levels reflect different issues and therefore, require different actions

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There are 2 types of loyalty : true long-term loyalty and false loyalty

Customers will remain rock-solid if they are completely satisfied

It is absolutely critical for a company to excel in both defining its target customers and delivering a product or service that completely meets their needs

Totally satisfying the members of the targeted customer group should be a top priority

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The Satisfaction Loyalty linkOnly completely satisfied customers are the truly

loyal customersSatisfied customers tend to switch much often in a

competitive market than completely satisfied customers

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The Satisfaction Loyalty link continued...

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How to Listen to CustomersCustomer – Satisfaction Indices

Feedback

Market Research

Frontline Personnel

Strategic Activities

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Measures of Loyalty

Intent to Repurchase

Primary Behaviour -recency, frequency, amount, retention, and longevity.

Secondary Behaviour -referrals, spreading the word

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Apostles and Terrorists4 categories of customers:

LoyalistsDefectorsMercenariesHostages

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Individual Customer Satisfaction, Loyalty, and Behaviour

Satisfaction Loyalty Behaviour

Loyalist/Apostle High High Staying and Supportive

Defector/Terrorist

Low to Medium Low to Medium Leaving or having left and unhappy

Mercenary High Low to Medium Coming and going; low commitment

Hostage Low to Medium High Unable to switch; trapped

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Using Customer Satisfaction Information

Critical barometer – how well the company is serving its customersShows a company what it needs to do to increase its consumer satisfaction level

Understanding what the customers are saying when they provide various responses

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Steps for measuring Customer Satisfaction 1. Make the measurements of customer satisfaction

and loyalty a priority and to ensure the process is unbiased, consistent, broadly applied, and be able to capture and store information.

2. Create a curve by plotting individual customer responses.

3. Determine the most appropriate strategies for raising customer satisfaction.

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Analyzing the customer curvePlotting individual customer responses on a curve. Assessing the satisfaction levels of the customersAssessing the factors (good/bad) that caused the

curveComparing the curve with the competitorsCross check for false positives, if present.

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Determining strategies for improvementScale Level of

SatisfactionRemark

2-3 DissatisfiedProvide basic product or basic elements expected from any in industry

3-4 NeutralHappy with product. Challenge lies in ensuring that he does not fall below this scale

4-5 SatisfiedBelieves all needs, preference & values are addressed.TO maintain them, company must listen to customers & interpret their say.

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Implications of 3 step model & Analysis1. Different actions are required to raise satisfaction

levels 2. Order of steps is important.

For long term survival and flourishing it is imperative for a firm to understand the relationship between satisfaction and loyalty for each of its customers.

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