EXPERT RESPONSE
The question is based on the assumption that customer retention equals customer satisfaction and complaint handling. I disagree with this assumption. In fact, several studies have indicated that there is little correlation between customer satisfaction and retention or future purchases. In one case, only 17% of satisfied customers of financial institutions claimed that they would not entertain a competing offer.
The real indication for retention is not customers' perceptions (e.g., satisfaction) but customers' actions. Repeat business, purchasing ancillary services, recommendations to others, willingness to pay premium price and frequency of purchasing are the indicators of customer retention. These factors can be easily quantified and measured by the dollar value of each action.
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