In terms of customer loyalty, what is the definition of 'customer defection'?

Customer defection refers specifically to the phenomenon where existing customers stop buying from a particular company and instead choose to purchase from its competitors. This shift indicates a loss of loyalty and suggests that the company may not be meeting the needs or expectations of its customers. Understanding customer defection is crucial for businesses because it highlights areas that may require improvement to retain customers and foster loyalty. Companies often analyze the reasons behind defection to improve their offerings and customer experience, making it a key focus area in efforts to enhance overall customer retention strategies.

The other options do not accurately capture the concept of customer defection. Retention of existing customers describes the opposite scenario of defection, while an increase in the customer base refers to gaining new customers rather than losing existing ones. Improvement of service quality, while relevant to customer experience, is not a direct definition of defection itself.