The satisfaction and profit disconnect

“Customer satisfaction is not a surrogate for customer retention. While it may seem intuitive that increasing customer satisfaction will increase retention and therefore profits, the facts are contrary. Between 65% and 85% of customers who defect say they were satisfied or very satisfied with their former
supplier.”

–Frederick Reichheld

Questions asked at listening posts must be designed to find out whether products and services bought by satisfied customers are continuing to meet their needs.

Should existing products be adapted to respond to new needs? Should new services be added to respond to changing lifestyles?

For example, when a leading provider of baked goods saw sales begin to level off, they decided to find out why. By asking questions, they learned that most loyal customers were growing older, and becoming more concerned about fat and cholesterol in their diets. These customers were not dissatisfied with the company's products or delivery. They stopped buying the company's baked goods because the product line did not meet their needs anymore. They discovered that if the firm offered low-fat products, the loyal customers would be happy to buy them. By listening to their most loyal customers, the company determined that they should offer new products, which have become very successful.

Listening posts must be designed and used to measure satisfaction, of course, but they must also be used to measure factors that will gauge the possible defection of satisfied customers.