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    Why Satisfied Customers Defect - Group 3&4

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    Satyajeet Tripathy
    The document discusses that while customer satisfaction is important, it does not always lead to customer loyalty as there are factors like high switching costs or lack of alternatives that can create "false loyalty". It also examines the relationship between satisfaction and loyalty across different sectors and how ecosystem building and engaging customers can help create true loyalty. The different types of customer behaviors like defectors, mercenaries and hostages are also outlined based on their satisfaction and loyalty levels.

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    Why Satisfied Customers Defect - Group 3&4

    Uploaded by

    Satyajeet Tripathy
    42 views8 pages
    The document discusses that while customer satisfaction is important, it does not always lead to customer loyalty as there are factors like high switching costs or lack of alternatives that can create "false loyalty". It also examines the relationship between satisfaction and loyalty across different sectors and how ecosystem building and engaging customers can help create true loyalty. The different types of customer behaviors like defectors, mercenaries and hostages are also outlined based on their satisfaction and loyalty levels.

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    Why Satisfied Customers Defect_Group 3&4

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    The document discusses that while customer satisfaction is important, it does not always lead to customer loyalty as there are factors like high switching costs or lack of alternatives that can create "false loyalty". It also examines the relationship between satisfaction and loyalty across different sectors and how ecosystem building and engaging customers can help create true loyalty. The different types of customer behaviors like defectors, mercenaries and hostages are also outlined based on their satisfaction and loyalty levels.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    42 views8 pages

    Why Satisfied Customers Defect - Group 3&4

    Uploaded by

    Satyajeet Tripathy
    The document discusses that while customer satisfaction is important, it does not always lead to customer loyalty as there are factors like high switching costs or lack of alternatives that can create "false loyalty". It also examines the relationship between satisfaction and loyalty across different sectors and how ecosystem building and engaging customers can help create true loyalty. The different types of customer behaviors like defectors, mercenaries and hostages are also outlined based on their satisfaction and loyalty levels.

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    You are on page 1of 8

    WHY SATISFIED

    CUSTOMERS
    DEFECT
    GROUP 3 GROUP 4
    ABIJITH PURAVANKARA ANIL REDDYMADDI
    KRITIKA GOEL HARSHITHA BHUVANENDRA
    PRIYAM RAJ LAXMI PRASANNA REDDY
    SHREYA JOSHI SATYAJEET TRIPATHY
    VARUN BELGAMWAR SUKRUTHA BALASUBRAMANYA
    SUMMARY

    • The case deals with customer satisfaction and sheds light on companies
    dealing with customer satisfaction levels.
    • The assumption that customer loyalty and customer satisfaction are
    directly proportional is false.
    • Enhanced customer satisfaction, reduced churn, increased revenue,
    greater employee satisfaction can be attained with a proper
    management of the entire customer journey.
    • Depending on market attributes and the competitive environment the
    customer satisfaction and loyalty curves differ a lot across various
    sectors in the market.

    2
    CUSTOMER LOYALTY

    LONG TERM LOYALTY (TRUE


    FALSE LOYALTY
    LOYALTY)
    • Long term loyalty is easily created through • False Loyalty is when a customer seems to
    ecosystems. be loyal but, is unable to switch.
    • Ecosystems serve as wide nets to capture • A few of the factors are proprietary
    customers' attention for brand loyalty to technology that limits alternatives, high
    develop over time and results in repeat switching costs.
    purchases.
    • Example: High switching costs from one
    • Example: An Apple product is designed to hospital to another usually prevents the
    seamlessly connect and interact with other customer from switching mid treatment.
    Apple products.

    3
    SATISFACTION LOYALTY LINK
    • Satisfied customers are not necessarily truly loyal but, completely satisfied customers are truly loyal.
    • Due to competitiveness in the market and availability of alternatives satisfied customers tend to switch.

    6
    Satisfaction-Loyalty Relationship

    Noncompetitive
    Zone 4
    lOYALTY

    Highly
    2 Competitive
    Zone
    1

    0
    1 2 3 4 5
    Satisfaction
    4
    Local Telephone Airlines Hospitals Personal Computers Automobiles
    LISTENING TO
    CUSTOMERS
    Market Research
    • This will provide data from the customers pre and post sale. It
    is important to know what the customer wants and how
    satisfied is he after receiving the product or service.

    Strategic activities
    • A Higher involvement of customers in multiple levels of the
    companies has proven to better customer relationship.

    Frontline Employees.
    • These are the employees which are the first point of contact
    for most customers. Their main job is to listen to the customers
    carefully and pass on the information.

    Feedback.
    • A customer’s queries , comments, complains lie in this. The
    company utilizes this information to solve the problems.

    Customer Satisfaction indices.


    • These are the quantitative indices which represents the
    customer’s level of satisfaction with various provisions from
    the company.
    5
    MEASURES OF LOYALTY

    Primary Behaviour:
    • This type of behaviour is calculated by RFM Analysis,
    and it measures recency, frequency, monetary values
    of the customer along with retention , longevity.

    Secondary Behaviour:
    • This kind of behaviour essentially changes the
    customer into a marketer. This behaviour also
    indicates a certain level of loyalty amongst the
    customers.

    Intent to Repurchase:
    • This a strong indicator of loyalty. In the customer
    relationship journey, the customer can have
    intentions to repurchase, and a company must
    maintain a strong relationship for this to happen.

    6
    CUSTOMER SATISFACTION, LOYALTY, AND BEHAVIOR

    •Loyalist: These kind of customer is highly loyal and


    satisfied with a high intent to repurchase in the
    future.
    Satisfaction Loyalty Behavior •Defector: Customer with a bad experience falls
    under this category. Such a customer is unlikely to
    Staying and ever be loyal to the company.
    Loyalist/Apostle High High
    supportive
    •Mercenary: Customer who purchases a single item
    Low- Leaving or and is never returns to repurchase a product of the
    Defector/Terrorist Low-medium
    medium unhappy
    same company. This can be seen in various sectors
    Mercenary High Low- Coming and going; like automobiles , telephones.
    medium low commitment
    •Hostage: Even after not being completely satisfied
    Unable to switch; with the company, these customers still choose to be
    Hostage Low-medium High trapped
    loyal and have a high intent to repurchase. The
    customers are unable to switch due to unavailability
    of resources or higher switching costs.

    7
    THANK YOU!

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