Voice and Exit
In private companies, Hirschman (1970) notes two different ways the "public"
can indicate dissatisfaction with service quality. They can exit, or withdraw
patronage and seek services or products elsewhere -- this is the typical
economic option. Or they can use their voice and attempt to change the situation
-- this is the typical political option.
Hirschman argues that private firms can benefit from voice more than from
exit, and that publics would benefit from mixed options. Loyalty is a methodology
that allows quality-conscious customers to exercise voice before exit, giving
companies a chance to improve their ways. Focusing on improving customer
needs is an efffective and successful strategy (though it can be difficult
to balance the needs of the various customers of an organization -- users,
suppliers, government regulatory agencies, stockholders, etc.).
But often managers lack appropriate incentives that reward them for organizational
performance. They also may lack the information or control to take advantage
of customer feedback.