IMPACT OF CO-CREATION OF CUSTOMERS/CONSUMER RETENTION AND SATISFACTION

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND TO THE STUDY

It is an obvious fact that every organization tends to move to a position where customer satisfaction is given a favourable consideration. In other words, customer satisfaction is a construct that must be met optimally for efficient and effective achievement of stated objectives, and for smooth continuation of business. Customer satisfaction is an integral part of organizational objectives that must be fulfilled for an organization to maintain its customers. Customers are valuable asset that must be properly kept satisfied (Day, 1994). The existence of any business oriented organization is the performance of business activities that will flow from the organization to identified target customers through the provision of need satisfying packages in order to satisfy the needs of the customers, and achieve the stated objectives set by the organization. The satisfaction of the needs of the respective customers thereby gives room for an opportunity to retain the customer and co-create customer for continuous patronage. In a similar manner, customer retention and consumer co-creation are strong indicators of organizational objectives. The level of customer retention and co-creation dictates to some extent the level of achievement of organizational, objectives (Day, 1994). In other words, if customers fail to patronize or repeat the purchase of the products of the organization, definitely sales and profitability of the organization will drop which will adversely affects the entire performance of the firm. In a nut shell, the degree at which organization retain and co-create their customers depends to a large extent the degree of satisfaction derived from the products of the organizations. Co-creation is a management initiative, or form of economic strategy, that brings different parties together (for instance, a company and a group of customers), in order to jointly produce a mutually valued outcome.
Importance of customer satisfaction in today’s dynamic corporate environment is obvious as it greatly influences customers repurchase intentions whereas dissatisfaction has been seen as a primary factor for customer’s intention to switch (Faiza, NAwaz and Khan 2001). It is therefore obvious for business organization to create and maintain favourable relationship with their customers in order to not only give room for repeat purchase but also create room for customer co-creation and retention. When there is a favourable relationship between the organization and the customers, customers tend to repeat purchase and continue patronizing the organization, thereby telling their favourable experiences with other members of the society which can have positive effect on the organization. More so, dissatisfied customers are more likely to tell people about their unfortunate experiences which will negatively affect the performance of the organization (Olajide and Israel, 2012). In other to achieve customer satisfaction, organization must be able to build and maintain long lasting relationship with customers through satisfying various customers needs and demand which resultantly motivates them to continue to do business with the organization on on-going basis. (Ibojo, 2014). Ibojo (2014) was of the view that, for an organization to constantly co-create and retain its numerous customers in this competitive global village, there is the need to strategically constantly satisfying the needs of the customers. He was of the opinion that a satisfied and retained customer will give room for repeat purchase while unsatisfied customer may decide to switch to other brands or competitive brands of other organizations.