Those getting started with a customer retention strategy might initially assume that retention rate is based on customer satisfaction. However, several studies have indicated that there is little correlation between customer satisfaction and retention or future purchases, according to customer experience expert Lior Arussy, founder of Strativity Group Inc. In one case, only 17% of satisfied customers of financial institutions claimed that they would not entertain a competing offer.

The real indication for customer retention is not customer satisfaction, but customers' actions, Arussy said. Repeat business, purchasing ancillary services, recommendations to others, willingness to pay premium price and frequency of purchasing are the indicators of customer retention. These factors can be easily quantified and measured by the dollar value of each action.

Sometimes organizations need to understand that the closest touch point to the customer can help improve customer retention.......

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Title: Student
Approximate Word Count: 364
Approximate Pages: 2 (250 words per double-spaced page)

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