Sasser Case Summary

863 Words 4 Pages
One of the main takeaways from Professor Sasser’s lecture on customer care is the link between customer’s satisfaction and loyalty to profit. He discusses an example with MBNA, a credit card company associated with Maryland National Bank. The CEO was worried about his business because they were not growing profitably. They attracted customers, but the more they attracted, the more profit they lost. The CEO calculated the lifetime value of a customer and found that it was taking them five years to break even; however, his customers were only staying with him for four. High acquisition costs were not allowing them to be profitable and the retention of his customers was an issue. One way to fix the profitability is to decrease the acquisition …show more content…
Professor Sasser outlines a retention cycle as: retention (satisfied customers will stay) leads to related sales (satisfied customers buy more), which leads to customer referrals and the business will gain “like customers”. Sasser provides links to his main takeaway that as a company moves the customer satisfaction levels they obtain the behaviors that lead to profitability. Its not about the scores themselves, it’s the behavior changes that come along with those scores (the retention cycle). The correlation here is that very high customer satisfaction levels are directly related to referrals, which is directly related to profit.
Sasser’s key points in this lecture are (1) acquire the customer with the products, (2) retain the customer with service, and (3) create Apostles with solutions to customers. He stresses to examine the customer base and narrow down the customers and the behaviors that you want. Spend energy on investing in those customers you want to retain and drop the costly customers because not all customers are good for you (costly customers).
Professor Sasser divides customers into 4 broad
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Defectors are completely dissatisfied customers and will walk right out of the door. Recently, I’ve made the choice to be a Defector to State Farm Insurance; however, I was not always a dissatisfied customer with my foot out the door. After a flood totaled my vehicle, I was an Apostle to State Farm. The customer service was great, I received a settlement check that was enough for a down payment on another car, and I received the check rather quickly. After everything had settled down, I began to look into my monthly rates and noticed that for the prior 5 months, my rates had gone up significantly. A phone call stating State Farm increased their rates throughout the company confirmed my move to a Defector. There was no warning to the rate increase, and no explanation as to why. A good driver title did not matter any more. Because there is competition in this market, I was able to find a company to defect to that was much cheaper, for the same

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