Using Customer Perceptions of the Competition to Improve the Prediction of Loyalty: A look at the U.S. and India

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Abstract:

Most traditional customer satisfaction surveys measure aspects of organisational performance, but satisfaction and loyalty may also be influenced by customers' perceptions of the competition. We describe two studies that looked at the value of collecting customer ratings of the competition in addition to traditional customer satisfaction data in order to predict customer loyalty. In both studies overall satisfaction with the organisation predicted intent to renew. Only in the first study did adding competition ratings significantly improve that prediction. Furthermore, competitive data contributed value-added information to help target specific interventions aimed at improving satisfaction and loyalty. In sum, collecting ratings of the competition can help focus organisational interventions aimed at increasing customer satisfaction and loyalty.

Document Type: Research Article

DOI: http://dx.doi.org/10.1362/1475392054797278

Publication date: July 1, 2005

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