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Globalized markets and borderless flow of information have resulted in intense competitive pressures and increased customer expectations. Productivity, quality, customer satisfaction are the buzz-words in today’s business scenario that demand considerable efforts on the part of the company.

Hotels who understand the importance of customer retention, do not underestimate customer service and satisfaction as a strong starting point in gaining competitive advantage. Palmer et al. (2000); Knox and Walker (2001); Rowley (2005) proposed that the development of customer loyalty involves different stages and the customers who are at different stages require differentiated strategies.

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Customer satisfaction influences loyalty; the higher the level of customer satisfaction, the higher the level of loyalty. Customer retention refers to the ability of a company or product to retain its customers over some specified period. High customer retention means customers of the product or business tend to return to, continue to buy or in some other way not defect to another product or business, or to non-use entirely.

Selling organizations generally attempt to reduce customer defections. Customer retention starts with the first contact an organization has with a customer and continues throughout the entire lifetime of a relationship and successful retention efforts take this entire lifecycle into account. A company’s ability to attract and retain new customers is related not only to its product or services, but also to the way it services its existing customers, the value the customers actually generate as a result of utilizing the solutions, and the reputation it creates within and across the marketplace. Successful customer retention involves more than giving the customer what they expect. Generating loyal advocates of the brand might mean exceeding customer expectations. Creating customer loyalty puts ‘customer value rather than maximizing profits and shareholder value at the center of business strategy’. Reicheld, Frederick (1996).
The key differentiation in a competitive environment is often the delivery of a consistently high standard of customer service. Furthermore, in the emerging world of Customer Success Retention is a major objective that drives the activities of business (Mehta, etal, 2000)

Customer retention has a direct impact on profitability. A business can in no point function without its customers and the financial losses and loss in reputation can be devastating for it when losing customers. When assessing the financial value of a life-long customer one can gain an insight in why every customer matter.

Customer satisfaction is not an element that businesses can put only semi-focus on. Once customers are satisfied with the services that the service provider is giving, then the possibility of the customers patronizing again from the company is very high.
The hospitality industry is a highly specialized industry where the satisfaction, retention and loyalty of customers depends on the quality of service received from the hotel,, it is not enough to run promotional campaigns like discounts, gift cards and loyalty schemes to entice customers but also the hotels need to focus on developing a sustainable service

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Kylie Garcia

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