Depending on whether the customer is satisfied or dissatisfied, different behavior reactions can be derived. From dissatisfaction there arises, for the customer, the following possibilities for action:
Rejection In the case of a rejection (also known as a defectionOpens in new window), the customer has the option of either a change of business, brand, or product, or he may opt to entirely relinquish the product, but they get that product from another provider. An unhappy Mercedes driver, for example, may stay with their brand, but the customer will get a new car from a different car dealer.
In the case of a brand change, dissatisfied consumers decide to give their business to a competing brand. This would be in the case where the above-mentioned Mercedes driver would opt to buy an Audi instead.
In a prouduct change, the customers decide in favor of a different product category. The customer remains true to their service provider, but they opt for another product. The last possibility open to a customer is to relinquish the current product altogether.
Negative Word of Mouth Advertising Negative word of mouth advertising entails dissatisfied customers disclosing negative opinions concerning the product or company.
According to a well-established marketing literature rule of thumb—that negative word of mouth propaganda is ten times as effective as positive customer feedback—the ramifications of this form of negative advertising are considerable. Bad news travels faster than good news.
Complaints This is the individual form of rejection. The consumer encounters the company directly and complains about a defective product or faulty service.
Satisfied customers have the following possibilities for action:
Cross-Selling Cross-selling means that satisfied customers will be prepared to buy other products from a provider. Why should a customer who is happy with the quality of a company’s product and services opt for another provider?
Customer Commitment Customer commitment describes the constancy of a customer’s contact with a company, which is understood as a special bond, and which is based on voluntary choice and satisfaction (Fest, 1999, p. 106).
Decreasing Price Sensitivity The introduction of higher prices is easier with satisfied customers than it is with unsatisfied customers. Consumers who can trust in a company’s quality and service are as a rule also prepared to pay more.
Positive Word of Mouth Advertising Positive word of mouth advertising entails satisfied consumers telling other people positive things about the company or product. The customer will actively recommend the product or service.
It will become apparent to the reader that these three options of exiting the firm, voicing concern for the organization decline, or remaining loyal to the firm are in the main determined by whether a customer is satisfied with the overall performance of the firm.
In Hirschman’s view, the more disenchanted an individual was with the organization, the more likely they were to exit. Hirschman’s work set the stage for subsequent studies on customer satisfaction as have been discussed in this literature.
Nigel Hill, Jim Alexander and Woodcock, N. (1999). The Handbook of Customer Satisfaction and Loyalty.
Evans, M., O’Malley, L. and Patterson, M. (2004). Exploring direct and customer relationship marketing. London: Thomson.
Buttle, F. (2004). Customer relationship management: concepts and tools. Oxford: Elsevier Butterworth-Heinemann.
Payne, A. and Frow, P. (2013). Strategic customer management: integrating CRM and relationship marketing. Cambridge: Cambridge University Press, P. 211. See also Payne, A. (2005). Handbook of CRM: achieving excellence through customer management. Oxford: Elsevier Butterworth-Heinemann; Payne, A. and Frow, P. (2005). A strategic framework for customer relationship management. Journal of Marketing, 69 (October), 167 – 76.
