What is the importance of customer satisfaction in relation to customer loyalty and retention?

This argument could be described on light of literature review.

Bowen and Chen (2001) said that having satisfied customers is not enough, there has to be extremely satisfied customers. This is because customer satisfaction must lead to customer loyalty and retention.

 “Building customer loyalty is not a choice any longer with businesses: it’s the only way of building sustainable competitive advantage. Building loyalty with key customers has become a core marketing objective shared by key players in all industries catering to business customers (Bansal and Gupta ,2001):

The strategic imperatives for building a loyal customer base are as:

• Focus on key customers

• Proactively generate high level of customer satisfaction with every interaction

• Anticipate customer needs and respond to them before the competition does

• Build closer ties with customers

• Create a value perception”.

Sivadas and Baker-Prewitt (2000) said “there is an increasing recognition that the ultimate objective of customer satisfaction measurement should be customer loyalty”.

Fornell (1992) said “high customer satisfaction will result in increased loyalty for the firm and that customers will be less prone to overtures from competition”.

This view was also shared by Anton (1996) who said that “satisfaction is positively associated with repurchase intentions, likelihood of recommending a product or service, loyalty and profitability”. Loyal customers would purchase from the firm over an extended time (Evans and Berman, 1997).

Guiltinan, Paul and Madden (1997) said that satisfied customers are more likely to be repeat (and even become loyal) customers.

Clarke (2001) said, “a business that focuses exclusively on customer satisfaction runs the risk of becoming an undifferentiated brand whose customers believe only that it meets the minimum performance criteria for the category. Long-term customer retention in competitive markets requires the supplier to go beyond mere basic satisfaction and to look for ways of establishing ties of loyalty that will help ward off competitor attack”.

Thus customers satisfaction transformed into loyalty which translated into retention.

(Harkiranpal Singh , 2006)

Customer satisfaction plays an important role within your business. Not only is it the leading indicator to measure customer loyalty, identify unhappy customers, reduce churn and increase revenue; it is also a key point of differentiation that helps you to attract new customers in competitive business environments.

to save him and he will make marketing for ur service and bring his frinds to buy ur items

Thanks

Totally agree with answer given by Mrs. Ghada

Satisfied customers are mostly likely to share their experiences with other people

Many customers will not come to complain about a product hence they will differ from one industry sector to another,increased customer satisfaction reduces operating because of familiarity with your service system

Customer satisfaction influences repurchase intentions

Increased customer loyalty increases purchases of the existing product

Satisfied customers has a positive word of mouth in terms of referring other customers to your company

Great answers by the colleagues. nothing more to add

I agree with the rest answer

Customer satisfaction ensures customer loyalty and retention.