Essay on The Link Between Customer 's Satisfaction And Loyalty

863 Words Oct 11th, 2016 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 cost by not recruiting more customers and rely on getting more referrals. However, if the customers are not staying with the company, how were they going to refer more customers? This leads to the next main takeaway from his lecture: customer retention.
The CEO realized that retention was key to the success of his business. 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…

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