Measuring and managing the satisfaction-loyalty-performance links at Volvo

Citation

(2002), "Measuring and managing the satisfaction-loyalty-performance links at Volvo", Measuring Business Excellence, Vol. 6 No. 4. https://doi.org/10.1108/mbe.2002.26706dae.001

Measuring and managing the satisfaction-loyalty-performance links at Volvo

Measuring and managing the satisfaction-loyalty-performance links at Volvo

Gustafsson, A. and Johnson, M.D., Journal of Targeting, Measurement and Analysis for Marketing (UK), Vol. 10 No. 3, 2002

Proposes a general framework for measuring the links between quality, satisfaction, loyalty and performance. After outlining the framework, presents a case study of Swedish car company Volvo's survival strategy in the 1990s and then applies the framework to Volvo's various satisfaction data sets, demonstrating the complexity of the links between quality, satisfaction, loyalty and profits. Based on the framework, asserts that Volvo could increase its profits by 4 per cent by improving its sales performance with one-scale point and that it could increase its profits by 10 per cent with a one-scale step improvement on its cars. Adds that a good workshop is vital as it encourages customers to return and strengthens the dealer, which in turn makes customers more likely to return and buy a new car.

Comment: This study of car manufacturer Volvo shows a very clear link between quality, satisfaction and loyalty, reminding any reader that CRM is not about one aspect in particular but a myriad of issues all of which are inextricably linked.