While over 90 percent had an ongoing process for measuring and improving customer satisfaction scores, only 2 percent were able to show increases in sales or profit resulting from documented increases in customer satisfaction. That's why more and more organizations are redirecting their efforts toward optimizing customer loyalty and value. Such a move is consistent with trends in Total Quality Management. Customer-based reorganization and customer value models both derive from focusing all company processes on customers. Customer satisfaction, as a concept, is benign and passive.
Customer retention is proactive.
Just as generating customer loyalty requires new cultural, relationship, and value-creation approaches to succeed, retention measurement and information systems must be similarly innovative. Perhaps the most important stage is Attrition. Once the reasons for loyalty breakdown are uncovered and understood, they often become the Rosetta Stone for getting, keeping, or reacquiring customers. Performance information on competitive suppliers should be obtained whenever possible and advisable. For example, a retail discount hardware chain relied on in-store customer service desks to identify and monitor complaints.