Why Satisfied Customer Defect - 9193 Words

ARTICLE www.hbr.org Why Satisfied Customers Defect by Thomas O. Jones and W. Earl Sasser, Jr. Included with this full-text Harvard Business Review article: 1 Article Summary The Idea in Brief— the core idea The Idea in Practice— putting the idea to work 2 Why Satisfied Customers Defect 14 Further Reading A list of related materials, with annotations to guide further exploration of the article’s ideas and applications Product 6838 Why Satisfied Customers Defect The Idea in Brief The Idea in Practice Satisfied customers—a sure sign of your company’s success? Actually not, as Xerox Corporation discovered. Its merely s atisfied customers were six times less likely to buy again from Xerox than its totally satisfied customers. To secure†¦show more content†¦The company’s eight divisions operate in diverse markets, including light manufacturing, wholesale distribution, and consumer services. All are feeling pressure from strong competitors, and the corporation has created a customer-satisfaction survey as one method of measuring the impact of its quality-improvement process. After dispensing with several items on the agenda, the group turns to the third-quarter customer-satisfaction indices, and a transparency is placed on the overhead projector. (See the graph â€Å"Third Quarter Satisfaction Index.†) The CEO proudly points out that 82% of the customers surveyed responded with an overall satisfaction rating of either 4 (satisfied) or 5 (completely satisfied). Everyone in the meeting agrees that the company must be doing pretty well because only 18% of its customers were less than satisfied. There are three divisions with average rat- harvard business review †¢ november–december 1995 ings of 4.5 or higher. There is general consensus that they have reached the point of diminishing returns and that further investing to increase customer satisfaction will not make good financial sense. The group next examines the results of the division with the lowest average rating, a 2.7. This business unit manufactures bulk lubricants and sells to companies that repackage the product for sale to the retail channel. It is aShow MoreRelatedTotal Quality Management1287 Words   |  6 Pagesevery function and every employee in satisfying customers needs, both internal and external. TQM works by continuously improving all aspect of work through structured control, improvement and planning activities that are carried out in concern with guiding ideology that focuses on Quality and Customer Satisfaction as the top priorities. There has been many arguments that TQM succeeds only by incorporating a concern about quality for the customers throughout the organisation. The truth of thisRead More500 Furnitures995 Words   |  4 Pagesis always something that can be improved. They are never totally satisfied with the present level of quality. This commitment to the pursuit of excellence is passed down to every employee. The franchisors quality motto is Excellence and quality are not destinations; they are journeys.† maker. Quality efforts are made in all areas of the business in an attempt to achieve Zero Unsatisfied Customers. The first thing a customer notices at each franchise store is its curb appeal. The parkingRead MoreGeneral Motors’ Ignition Failure Hearing829 Words   |  3 PagesOfficer Mary Barra testified in front of a panel of senators regarding the company’s late delay in addressing a defect in ignition switches, causing cars to lose power and injuring or killing the drivers. 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There rude deposition, unethical guidelines and disgracefulRead MoreHaier Logistics1650 Words   |  7 Pageshave to meet the individual needs of customers, we must achieve the aim of zero-defect quality, zero occupancy, and zero distance service. 2〠The formation of corporate strategy In the period of restructuring, the company s CEO Zhang Ruimin said that In the information age we should be user-centric to get customer’s satisfaction as the biggest target, otherwise corporate profits is impossible in this era the value chain is not suitable . How we can improve customer satisfaction is therefore a majorRead MoreWhy Software Testing With Real Users1099 Words   |  5 PagesWeek6 Hand in Assignment There are a number of reasons why software testing with real users views are important, even if the software is still being developed. One of the main reasons is that testing can bring value to the end product. 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