Why Satisfied Customer Defect

9193 WordsFeb 28, 201337 Pages
ARTICLE www.hbr.org Why Satisfied Customers Defect by Thomas O. Jones and W. Earl Sasser, Jr. Included with this full-text Harvard Business Review article: 1 Article Summary The Idea in Brief— the core idea The Idea in Practice— putting the idea to work 2 Why Satisfied Customers Defect 14 Further Reading A list of related materials, with annotations to guide further exploration of the article’s ideas and applications Product 6838 Why Satisfied Customers Defect The Idea in Brief The Idea in Practice Satisfied customers—a sure sign of your company’s success? Actually not, as Xerox Corporation discovered. Its merely s atisfied customers were six times less likely to buy again from Xerox than its totally satisfied customers. To secure…show more content…
The company’s eight divisions operate in diverse markets, including light manufacturing, wholesale distribution, and consumer services. All are feeling pressure from strong competitors, and the corporation has created a customer-satisfaction survey as one method of measuring the impact of its quality-improvement process. After dispensing with several items on the agenda, the group turns to the third-quarter customer-satisfaction indices, and a transparency is placed on the overhead projector. (See the graph “Third Quarter Satisfaction Index.”) The CEO proudly points out that 82% of the customers surveyed responded with an overall satisfaction rating of either 4 (satisfied) or 5 (completely satisfied). Everyone in the meeting agrees that the company must be doing pretty well because only 18% of its customers were less than satisfied. There are three divisions with average rat- harvard business review • november–december 1995 ings of 4.5 or higher. There is general consensus that they have reached the point of diminishing returns and that further investing to increase customer satisfaction will not make good financial sense. The group next examines the results of the division with the lowest average rating, a 2.7. This business unit manufactures bulk lubricants and sells to companies that repackage the product for sale to the retail channel. It is a
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