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action. They confirm that customers “… who report a high satisfaction rating still possess a predisposition to switch service suppliers.” And we also see that (not surprisingly) dissatisfied customers will definitely switch so you can’t ignore satisfaction. But Mittel and Lassar’s most important finding is that the “type” of quality affecting satisfaction differs from that affecting loyalty. If satisfaction follows from functional quality (empathy, responsiveness, assurance) then loyalty es from technical quality (reliability). Similarly satisfaction derived from technical quality means loyalty results from functional quality. The implications of these findings are enormous. First it tells us that customer satisfaction measures are inadequate on their own and need supplementing by a measure of loyalty (in this study the propensity to switch supplier). And secondly it means that we cannot focus on those elements of quality creating satisfaction because they don’t encourage loyalty. The findings provide clarity – and answer the switching dilemma – but they make service managers’ job harder still. In the spirit of this discovery I intend to set out how managers should respond to Mittel and Lassar’s important discovery. And, in doing so, I shall provide some guidance for service improvements leading to loyalty: (1) The first task of service managers is to understand what kind of service they provide. Is it a “credence” service where functional quality determines satisfaction or an “experience” service where technical quality matters? Any quality strategy must start from this point. (2) Next the service manager must establish the basic requisites of customer satisfaction. W There’s no use focusing on loyalty if you’ve got unhappy customers. We must identify and eliminate the causes of dissatisfaction and stress improvements in areas that drive customer satisfaction. If it’s functional quality then concentrate on customer care, ambience, convenience and responsiveness. If it’s technical petence that matters recruit trained staff and make sure they deliver high quality work. Borrow ideas from product quality improvement such as quality circles, quality checks and “right first time”. (3) When your measures show the vast majority of customers as satisfied the emphasis needs to switch to promoting loyalty. This means concentrating on the opposite quality type – functional quality for some and technical quality for others. The medical centre with caring, responsive reception and nursing staff needs the best medical staff to make satisfied customers loyal. The car repair centre that fixes cars well should focus on staffcustomer interaction, responsiveness, fort and customer care. You will need to use a measure of loyalty alongside established satisfaction measures. (4) The service manager should consider how to use the strength of a loyal, happy customer base as a way of recruiting new customers. Direct mail,qualityreferenced advertising (see Green, this issue of JSM) and “remendafriend” campaigns can all assist is exploiting satisfaction and loyalty. (5) Managers can also begin to develop new services to sell to newly loyal customers. As Mittel and Lassar point out, loyal customers “… progress to buying more of their total requirements from one supplier …”resulting in a greater “… lifetime revenue from that customer.” UK tyre and puncture repair pany, KwikFit, used its reputation for service and a loyal customer base to sell exhaust systems, oil changes, wheels and even car insurance Loyalty represents the aim of a service business. More loyal customers means lower marketing costs,