Customer satisfaction and loyalty in supply chain: The role of communication

Communication between buyers and sellers is central to the supply chain philosophy. Further, the trend toward more detailed customer demands has made it even more important for firms to solicit input and feedback from their customers in order to better tailor their offerings to customer needs. Previous research suggests a strong linkage between customer satisfaction and customer loyalty. Highly satisfied customers are more loyal than less satisfied customers. Thus, it was hypothesized that firms proactively seeking information from customers should realize a ‘pay off’ in terms of more satisfied and, subsequently, more loyal customers. A survey of buyers in the personal products industry was used to examine three methods of listening to customers. Frequency of vendor meetings with customers, formalized contact through the solicitation of feedback and/or conducting surveys, and personal visits by senior vendor managers were found to be related to customer satisfaction as well as customer loyalty.