The importance of maintaining customers

Relying on reputation in offering products and services is the most important in the operational processes in any organization, moreover the achievement of customer satisfaction is very important because customers are the real source of profit [1] and the guarantor of the continuation of organizational operations; and by neglecting customers, the justifications of the establishment of an organization vanish. The assets of an organization from the marketing standpoint is not represented only in its premises or its productivity tools; the most expensive asset of the organization in the market is the customers with whom it deals. The destruction of fixed assets is a problem that should be solved by creating new assets, but the organization cannot run its business when customers abandon it, which means that customers' satisfaction is the main objective of the organizational operations. [2]Perhaps one of the most important aspects of change witnessed by administrative thought in the last century was the so-called (oriented marketing philosophy of the organization) i.e., focusing all its activities to serve the market. [3]It is also important to clarify that the customer is the pivot of the entire business. [4]In giant organizations, which adopt the concept of contemporary marketing, one cannot distinguish between those who work in the marketing department and those who work in other departments because in such organizations all the people work to serve the customer. [5]Each department manager looks at the organizational operation from the customers' point of view [6]which means: They realize that maintaining customers keeps the organizational process going. [7]In deeper meaning, the modern trend is talking about the concept of "Relationships Marketing," which emphasizes a set of concepts, perhaps the most important from our point of view is the shift from the acquisition of new customers to the concept of retaining existing customers. [8]Hart pointed out in his study which was conducted in 1988 on the service provider companies that when customers' satisfaction increase by 1%, it leads to 5% increase of the revenue on proprietary rights. Thereafter, Reichheld conducted a study on the company which sells credit cards in the United States and found that 5% increase in efforts to retain customers led to increase in profits by 60% during five years. The same happened in the study of Reichheld Sasser in 1990 which explained that the cost of retaining current customers is five times less than the cost of attracting new customers[9].

Satisfaction Profit Chain

As known, customer satisfaction is the main foundation for the survival of any organization. Some people say that the main goal of most organizations in the eighties of the last century was to achieve customer satisfaction which was their main concern. However in 1990, goals changed and the main concern became how to retain customers, market relationships, and companies focus on satisfaction profit chain rather than focusing on customer satisfaction only: (Outstanding performance - customer satisfaction - customer retention - profit).

The logical conception, which lies behind the notion of satisfaction profit chain, is improving the performance characteristics * because the customer satisfaction is supposed to increase the rate of customers' retention which will lead to high profits.[10]

Customer Satisfaction and its impact on organization's revenues

This impact has been shown clearly and was confirmed by a number of studies in this field:

(Hanan, 1989; Lash, 1989; Horovitz, 1989; Reichheld & Sasser, 1990; Band, 1991; Rust & Zahorik, 1993; Rust, Zahorik, & Keiningham; 1995; Heskett et al, 1997; Anderson, 1998; and so forth).

Hirschman says that in 1970: The abandonment of some customers to an organization implies that customers do not purchase the services of the organization. As for the customers' expression to their complains, it indicates their dissatisfaction with the organization. The abandonment of customers to an organization will affect the revenues of the organization in the long run because it results from the rate of retaining customers. A light increase or decrease in the rate of retaining customers will affect the revenues in the future.[11]

Retention and customer value proposition

Customer retention is based on the harmony between the value which a customer searches for and what the organization offers. Steven Brown, the Professor of Marketing at the University of Houston, says: "When harmony takes place, there is no essential need for using special incentives for purchase" [12] The value proposition is determined through what customers need as a result of the following variables: (price, quality, the amount of innovation in the item which makes it satisfy the customers' needs rather than their alternatives available in the market, and finally the distribution place i.e., stores which are near customers). These variables are not financial but rather quantitative which is one of the most important measures of organizational strategies. [13]A customer may like the organization because there is no reason to hate it or because he or she does not have the alternative or because he or she satisfies the products and services of the organization and wants to continue that relationship; organizations tend to take into account the customers' satisfaction as a vital strategy.[14]