Customer Satisfaction or Market Driven Quality
It is clearly very important to establish the customer's perception of the quality of product and service provided. This may be in some part determined from customer complaints or warranty returns, but it is often stated that the customer rarely complains, they just don't come back. When this statement is balanced with - the amount of investment (financial and resource) that is being placed on identifying and gaining new customers, (seen as a means of increasing market share) against the investment on retaining old customers. Then maybe the effort and resource is being placed in the wrong area.
If old customers are being lost, possibly at the same or higher rates as gaining new customers, then a new approach is required. It may be worth considering investing money on retaining existing customers. On this basis customer loyalty is worth ten times the price of a single purchase, as a loyal customer will return to make further purchases.
A Sales Director of one successful organisation believes that if
customers like the service, they will tell three people. If they don t like the
service, they will tell eleven people. This illustrates the effect of a customer
complaint over customer praise and how quickly news of bad information over good
information spreads. (What sells newspapers, is it good or bad news? - I seem to
remember a newspaper that purported to tell only good news quickly failed). Le Boeuf suggested that organisations spent six times more obtaining new customers
than keeping old customers.
Below is a typical approach.
The issues that may need to be considered are:
For further information regarding this article or on measuring, monitoring and improving levels of Customer Satisfaction please contact Alice Lennie.
© 2007 Quality Management & Training Limited updated: 2nd March 2009
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