The High Price of Customer Satisfaction Harvard Case Solution & Analysis

"Satisfaction guaranteed or your money back" is a small business guarantee made to consumers since 1875, when Montgomery Ward used it to identify his mail order catalogue. It is now a vow many businesses make. But, the correlation between increasing customer satisfaction and increasing customer spending together with your business is hardly strong, as stated by the authors. To discover, the authors investigated the relationship between customer satisfaction and company results, gathering data from more than 100,000 consumers covering more than 300 brands. Although high customer satisfaction evaluations are ordinarily treated by managers as being universally good for company, the author’s findings indicate that the gains usually are not nearly so clear-cut.

There's a drawback to continuously allocating resources to increase customer satisfaction levels. It turns out the return on these investments is often insignificant as well as negative. Knowing a customer's satisfaction amount tells you little about how he/she will break up his or her spending on the list of different brands used. Because of this, changes in customer satisfaction levels are unlikely to truly have a significant effect on the share of class spending customers allocate along with your brand. Why? Single-brand devotion, that has been common in our parents' and grandparents' generations, continues to be replaced with devotion to several variant brands in a section in several sectors. As a consequence, ameliorating customers ‘share of spending with your brand tends to signify a far greater opportunity than attempts to improve customer retention. K The measure that really matters, according to the authors, isn't your percentage of promoters or thrilled customers. What issues is the comparative "rank" that your brand's satisfaction amount represents vis-a- vis your adversaries.

The High Price of Customer Satisfaction case study solution

PUBLICATION DATE: April 01, 2014 PRODUCT #: SMR480-HCB-ENG

This is just an excerpt. This case is about SALES & MARKETING

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