As firms search for ways to achieve profitable growth, it is natural for them to consider seeking more business with the customers they presently serve. Customer management pundits often propose that it is easier and less costly for firms to gain incremental sales from existing customers than to prospect for, and develop, customers with whom they currently do not do business. Yet, as Anderson and Narus (2003) argue, most firms struggle to devise or implement anything but the most sales-oriented growth strategies and tactics.

A particular challenge is how to link resource investments, especially those deployed at the customer or segment level (versus market level), with customer-level sales and profitability (Libai, Narayandas, & Humby, 2002). Profit chain-of-effects or cascading frameworks represent an intuitively appealing way to achieve this objective. They link resource inputs under the control of managers to customer-level sales and profitability. Consider, for example, Heskett, Jones, Loveman, Sasser, and Schlesinger's (1994) Service–Profit Chain (SPC). Working backwards, customer profitability is largely based on customer loyalty. Supporting arguments that have been advanced include loyal customers being less costly to serve, less price-sensitive and hence willing to pay higher prices, and more likely to be advocates who generate sales via positive word-of-mouth, to name a few. Further, the widespread adoption of loyalty programs can only be assumed to be due in part to their (assumed) positive impact on profits.

Customer loyalty, in turn, is driven by customer satisfaction.