The consequences of not satisfying customers can be severe. According toHoyer and MacInnis, dissatisfied consumers can decide to: -• discontinue purchasing the good or service,• complain to the company or to a third-party and perhaps return the item, or • engage in negative word-of-mouth communication.Customer satisfaction is important because, according to La Barbera andMazursky, “satisfaction influences repurchase intentions whereasdissatisfaction has been seen as a primary reason for customer defection or discontinuation of purchase”.
EFFECT OF CUSTOMER SATISFACTION ON CUSTOMER LOYALTY AND RETENTION
However, Bowen and Chen said that having satisfied customers is not enough,there has to be extremely satisfied customers. This is because customer satisfaction must lead to customer loyalty.
Bansal and Gupta: “Building customer loyalty is not a choice any longer with businesses: it’s the only way of building sustainable competitive advantage.Building loyalty with key customers has become a core marketing objectiveshared by key players in all industries catering to business customers. Thestrategic imperatives for building a loyal customer base are as:• Focus on key customers• Proactively generate high level of customer satisfaction with everyinteraction• Anticipate customer needs and respond to them before the competition does• Build closer ties with customers• Create a value perception”.Sivadas and Baker-Prewitt said “there’s an increasing recognition that theultimate objective of customer satisfaction measurement should be customer loyalty”.Fornell said “high customer satisfaction will result in increased loyalty for thefirm and that customers will be less prone to overtures from competition”.This view was also shared by Anton who said that “satisfaction is positivelyassociated with repurchase intentions, likelihood of recommending a productor service, loyalty and profitability”. Loyal