AbstractMarket penetration, sales performance, customer retention, and future market prospects are linked to four fundamental issues: Who are your customers and what do they really need and want? Which product/service attributes are expected and which are perceived as value‐added? In comparison with the competition, bow well is your organization catering to customer requirements? And where should you focus your improvement efforts? Speculation abounds, but reliable answers can be derived from customer‐satisfaction research, which quantifies the tangible and intangible factors that influence a purchasing decision. Using the hotel and other industries as a practical frame of reference, this article examines the mechanics of customer‐satisfaction measurement and management within the broader context of quality improvement.