Arguably, the world of business today has become very dynamic in nature. For many years, traditional businesses and healthcare organization have faced a lot of frustrations based on the fact that high customer satisfaction scores do not necessary lead to increased sales or high profit level. It is evident that there is inconsistency between the profitability and customer satisfaction. It is worth noting that customer satisfaction is not a guarantee to improved sales and increased profitability (Helgesen, 2006). The inconsistency tends to exist based on the fact that there are various factors aspect from customer’s satisfaction that increases profitability and sales in the traditional business and healthcare organizations.
Customer satisfaction does not guarantee profitability in healthcare organization because of the fact that satisfied customers still have a chance to choose from competing organization. The presence of competition tends to make satisfied customers purchase from companies that are competing (Helgesen, 2006). Based on this reason, when customers satisfaction moves to customers loyalty this is when the customers will remain loyal to the organization regardless of competing organizations.
There are occasions whereby the healthcare organizations and traditional business focus on customer satisfaction at an extra cost. Trying to make every customer happy will drain the revenue from the organization. For example, satisfied customers are always conscious of price, and will always focus on convincing traditional businesses and healthcare organizations to reduce prices. In order to maintain customers’ satisfaction, the business will reduce prices to make the customer happy leading to decrease of profits (Timothy et al, 2005). The customers do not care if the business is losing from the sales or not. If the company will raise prices the satisfied customer will go away due to the fact that they were doing business with them based on low price. The healthcare organizations depend mostly on the physicians decisions. Hence, the customers’ satisfaction change affects profitability since it depends on a third party. It is worth noting that customers’ satisfaction always puts pressure to traditional business and healthcare organization to be relaxant in handling consumers (Timothy et al, 2005). The essence of maintaining customer satisfaction is what derives always the profitability aspect.
References
Helgesen, Ø. (2006). Are Loyal Customers Profitable? Customer Satisfaction, Customer (Action) Loyalty and Customer Profitability at the Individual Level. Journal Of Marketing Management, 22(3/4), 245-266.
Timothy L. Keiningham, Tiffany Perkins-Munn, Lerzan Aksoy, Demitry Estrin, (2005) "Does customer satisfaction lead to profitability?: The mediating role of share-of-wallet", Managing Service Quality, Vol. 15 Iss: 2, pp.172 - 181
