The many “truisms” of customer loyalty lore are mostly a set of mythologies to deceive the gullible and exploit the innocent. Let us explore these mythologies and then talk about best practices for customer satisfaction and customer loyalty research.

The mythologies

Rising customer satisfaction scores are positively correlated with increases in sales.
Sometimes this is true, but just as often rising satisfaction scores are inversely correlated to actual sales. For example, as sales go down, stores are less crowded and store employees have more time to spend with customers, and often retail prices fall as sales go down. All of these factors can result in rising satisfaction scores—while sales are falling. Retailers, in particular, can “happily” go out of business amid a rising tide of customer satisfaction scores.

It costs less to keep your current customers than to attract new customers.
This is usually true, but not universally true. Keeping existing customers can become very expensive at times. Some customers are too costly to keep. The key is to focus on attracting and keeping the strategically profitable customers.

 …