One of the major aims of Six Sigma is to move beyond customer satisfaction. What is beyond customer satisfaction then? The simple answer is: Customer loyalty.
From customer loyalty we mean that the customers return to the company again and again for further purchases.
When a customer moves away from one company and reaches out some other company, that phenomenon is called Customer Defection.
More Customer Satisfaction Does Not Necessarily Mean High Profits
Most of the companies are under the impression that the customer satisfaction leads to more profits. But if we look at closely, even the satisfied customers move away from the companies to make further purchases from somewhere else. That said means that customers may be satisfied to some extent but they could not be retained by the company. Reason behind this is that customer does not feel valued. But if its possible to build relationships with the customers, then certainly most of the customers come back to the company for the simple reason that they feel valued. That is where the concept of Six Sigma takes us.
What If Satisfied Customers are Turned to Loyal Customers
Here is what happens if the satisfied customers are turned to loyal customers:
- The companies generate sustained profits from loyal customers.
- The loyal customers provide repeated business for company.
- The cost of finding new customers is very high. If companies have loyal customers then the need of finding new customers is reduced to greater extent and hence more savings.
- Operational costs of companies reduce to greater extent because now they work on reduced but better customer base.
What To Do To Retain Customers
Here is what companies can do to turn the satisfied customers to loyal customers:
- Companies should reduce the customers base, so that they have only profit providing customers. 5 platinum level customers are worth more than 20 bronze level customers.
- Measure and control the reasons of customers defection.
- Companies should access the customers needs.
- Build close personal relations with customers.
- Companies can tie senior management incentives to customer retention.
For those who want to learn more about Six Sigma for implementation, I have collected some books on Six Sigma, chosen from amazon. You can view the list for purchasing.