Assessing the Impact of Customer Satisfaction on Customer Retention

Abstract

This article proposes an alternative model for measuring customers’ overall satisfaction. Rather than relying on a single measure of overall satisfaction, a customer’s overall satisfaction score is developed on the basis of a weighted average of the gap between a customer’s importance rating and actual experience for each attribute. The relative importance weight determined based on customer base surveyed during a certain period will play an important role in calculating the overall satisfaction score. The proposed approach should be able to determine customers’ overall satisfaction objectively, and provide valuable information in assessing companies’ continuous quality improvement efforts toward customer satisfaction.