
Keeping and developing relationships with current customers is a key business strategy.1 Yet problems and complaints are bound to occur over the lifetime of customer relationships. Handling these effectively is vital to maintaining customer satisfaction and loyalty, as the example of Saturn illustrates. When faced with the need to repair a problem on 350,000 of its vehicles, the company chose to do whatever was necessary to satisfy customers: it set up an 800 number, went directly to some owners’ homes, and opened its checkbook to dealers. According to Joseph Kennedy, Saturn’s vice president of sales, service, and marketing, the goal was “to fix both the car and the customer.
We want Saturn to be a 100-year car company.” Saturn has achieved high levels of customer loyalty and in 1996 was rated number one in sales and dealer satisfaction in its class.
The impact of recovery strategies on a company’s revenue and profitability is dramatic. Hampton Inn hotels, for example, realized $11 million in additional revenue from the implementation of its service guarantee and scored the highest customer retention rate in the industry.2 General Electric has found that, on average, customers buy fifteen major appliances in their lifetimes. Committed to maintaining customer loyalty, the company has invested heavily in the GE Answer Center... To read the complete article, login or sign-up using the form below.
Get a premium subscription today to read this and all MIT Sloan Managmeent Review articles.
More Info.
Buy this article. Purchase one or more copies of this article as a PDF.
Subscribe today to read the most recent articles and the current issue of MIT Sloan Management Review.
Upgrade to premium
Current Subscribers: Do you subscribe to MIT Sloan Management Review? Register for online access.
- Register for free access to recent articles and the current issue of MIT Sloan Management Review.
- Subscribe and read articles from the past three years online.
- Premium subscription—access to the entire archive of articles.