The Relationship Between Customer Loyalty and Satisfaction

Topics: Customer service, Customer relationship management, Marketing Pages: 6 (2229 words) Published: April 4, 2013
The Relationship between Customer Loyalty and Satisfaction

In the past decades, there was a controversial issue about the relationship between customer loyalty and satisfaction. Actually, it is still a heated debate nowadays. Some people said that customer satisfaction bring customer loyalty, while some people believed that customer loyalty affect customer satisfaction. Interestingly, very few executives and managers understand the critical difference. The purpose of this paper is to find the relationship between customer loyalty and satisfaction and how should companies do to build loyalty. According to some previous researches, we found that customer satisfaction is just one of the factors of affect customer loyalty. There are some components that may develop or lessen loyalty. Customer Satisfaction

Satisfaction is a person’s feelings of pleasure or disappointment resulting from comparing a product’s perceived performance in relation to his or her expectations. Customer satisfaction is influenced not only by the overall performance of a brand, company, or experience, but also by how well the actual performance meets or exceeds expectations. 1)If the performance falls short of expectations, the customer is dissatisfied. 2)If the performance matches the expectations, the customer is satisfied. 3)If the performance exceeds expectations, the customer is highly satisfied or delighted. The importance of customer satisfaction is that it maintains client loyalty through exceptional customer service, which, in turn, can lead to growth in market share and profitability. Customer satisfaction also generates a positive company image. Clients who are pleased by positive employee attitudes and efforts will keep coming back and likely will inform others of their positive experiences. Overall, perhaps the greatest importance of customer satisfaction is that it can make someone's day to receive exceptional customer service. Customer Loyalty

The term customer loyalty is used to describe the behavior of repeat customers, as well as those that offer good ratings, reviews, or testimonials. Some customers do a particular company a great service by offering favorable word of mouth publicity regarding a product, telling friends and family, thus adding them to the number of loyal customers. However, customer loyalty includes much more. It is a process, a program, or a group of programs geared toward keeping a client happy so he or she will provide more business. Customer loyalty can be achieved in some cases by offering a quality production with a firm guarantee. Customer loyalty is also achieved through free offers, coupons, low interest rates on financing, high value trade-ins, extended warranties, rebates, and other rewards and incentive programs. The ultimate goal of customer loyalty programs is happy customers who will return to purchase again and persuade others to use that company's products or services. This equates to profitability, as well as happy stakeholders. Customer Satisfaction versus Customer Loyalty

Customer satisfaction is very different from customer loyalty. Customer satisfaction is a measure of expectations being exceeded, met or not met. When thinking of customer satisfaction measurement, we want to know that we are meeting or exceeding customer expectations. We want to believe that we have satisfied customers and that this will lead to their loyalty and improve revenues. Unfortunately, customer satisfaction has little to do with customer loyalty. Loyalty comes primarily from a customer’s emotional connection and experiences with an organization’s people. Customer loyalty is driven by customer experience with products and processes. Customers’ experiences with people, products, and processes will determine their emotional connection and loyalty to an organization. As for the relationship between customer satisfaction and loyalty, we found some researches about some methods to them, which are as...
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