Archives For Exit Voice Loyalty

Albert O. Hirschman’s Exit, Voice, and Loyalty is an excellent book. Hirschman looks at decline in organizations and how members/customers react to decline. He merges theories from two fields, economics and politics, to explain the decisions that members/customers make regarding whether to stay or go.

It has long been thought that exit is the best barometer of the quality of a product. If the quality of a given product by a particular company declines too much, customers will stop purchasing it and move on to a competitor. Seems pretty straight forward, but as Hirschman points out, it is much more complicated than that. Customers don’t act in one unified way. Some have a greater tolerance for decline in quality than others. That is often linked to their mobility in the market, the availablity of alternatives, and the cost (perceived or real) of making a change. These factors combine to present a strata of customers, unequally distributed, that will react to decline in very different ways.  Continue Reading…