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In addition to the direct link between loyalty
from increased retention (repeat business) and
referrals (new business from Word of Mouth)
described by Heskett’s Service-Profit Chain*:
“...the
statistical relationship between customer satisfaction and
market valuation is very strong... measurements of customer
satisfaction tell us what the company has done to its customers
and what the customers are likely to do to the company... (in
fact) 1% more satisfaction can equal 3% market capitalization
increase...”
This observation linking satisfaction to financial results was made by Professor Claes Fornell,
director of the National Quality Research Center,
at the Stephen M. Ross Business School at the University of Michigan in
the Harvard Business Review.**
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