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As the world economy expands customers have more choices for where they get their products and services Satisfying customers is no longer enough Even satisfies customers have many options that can easily attract them away from their current supplier Retaining customers requires building loyalty which not only includes customer satisfaction but also and emotional response that keeps customers coming back for more which is customer loyalty This paper will discuss what customer satisfaction and loyalty is their differences and how to create customer loyalty The first thing to look at is the distinction between satisfied customers and loyal customers When customers were asked in a survey about their previous supplier 60 to 70 percent of them responded that they were satisfied or very satisfied yet they still switched suppliersLenz 2000 p1 Most businesses think their customers are satisfied and they very well maybe Unfortunately customer satisfaction does not lead to customer loyalty These days even if customers are completely satisfied with the product or service 40 percent of them will leave and start doing business with a competitor Michaud 2000 On the surface 40 percent may not seem like that much after all over half of all satisfied customers are coming back However in dollars and cents 40 percent is costing companies more than they may think because attracting new customers can cost nearly double the amount it takes to attract repeat business from existing customer base Michaud 2000 Cost associated with creating loyal customers are minimal compared to the cost of marketing and advertising to reach new customers Loyal customers cost less to support allow companies to take more profit and are their greatest source of referral business Unhappy customers will tell ten people yet a happy satisfied one will tell only five the impact on the bottom line becomes very measurable very real and very powerful Larsen 1997 p1 So ultimately business want loyal customer but the question of what are
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