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Customer Loyalty |
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Description of Customer Loyalty. Explanation. |
Definition Customer Loyalty. Description.
Customer Loyalty in general is the behavior which clients exhibit when they make frequent repeat purchases of a brand.
In strategic marketing, customer loyalty is a business model in which company resources are employed so as to increase the loyalty of customers and other stakeholders in the expectation that corporate objectives will be met or surpassed. A typical example of this type of model is: quality of product or service leads to customer satisfaction, which leads to customer loyalty, which leads to profitability.
A fundamental assumption of loyalty models is that keeping existing customers is less expensive than acquiring new ones. According to Buchanan and Gilles (1990), the increased profitability associated with customer retention efforts occurs because:
Customer Loyalty Forum
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| Eleanya Eze Bonaventure - Nigeria | When to Establish a Business Relationship? | "Under what conditions is it even appropriate for a company to consider establishing relationships with customers? What are the characteristics of situations which might be suitable for the establishment of relatio |
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| Vijeshh - UK | Customer Loyalty is Created via Total Value Chain | "Customer loyalty is not only related to the service offered. It starts with the process of manufacturing the product to distribution to after services to delivery on time. The value added on each and every stage when rec |
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| Mrs. Josephine Idele - Nigeria | Customer Loyalty is Individual | "Customer loyalty is all about individual feelings. One person may feel good about a product or service, another may be offended by the attitude of the front desk personnel. Some other persons may prefer a product |
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| George Amissah - Nigeria | Customer Loyalty in a Monopoly | "In monopoly, there is no true customer loyalty. This is because the customer has no alternative even if the customer is not satisfied with the service/product. What may be termed loyalty because of repeat purchases is be |
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| George Amissah - Nigeria | Attitudinal and Behavioral Loyalty | "Customer loyalty can be classified into attitudinal and behavioral loyalty. Have changes (advancement) in technology changed attitudes and behaviors? What of the increased competition in the economy? Customers are now we |
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| Sergio Leite - Brazil | Paradigm Shift - Consumers | "Customers are increasingly demanding, less loyal and ephemeral. I am convinced that the speed and mass of information also generated the speed with which consumers began to change habits, brands and preferences, i |
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| Heins - Netherlands | Calculating the Benefits of Keeping Customers | "Hello all, I have a question which repeatedly pops up: where to invest your money: keeping customers or buying customers. Measuring buying customer is easy. But how do we measure the benefit of customer retention |
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| Maryellen Lindemann - USA | Customer Satisfaction = Customer Loyalty? | "Having been on the "front lines" of customer service/management for many years, it has been my experience that although a satisfied customer can become a loyal customer, many times that situation has more to do with how |
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| Emmanuel Osafo Gyane - Ghana | Customer Loyalty in Monopoly | "The issues raised are quite relevant for present day businesses in a perfect/competitive market setting. What about if a business is a sort of monopoly?" |
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| Uwa. Omoregha - Nigeria | What is Customer Loyalty? | "Customer loyalty is when a customer can ignore competition because of his trust and belief in your products/services." |
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| Massimo Annaratone - Italy | Loyalty Situation May Change Quickly! | "Sometimes a change of purchasing manager can change the scenario drastically, so the seller should keep transversal contact in the company to always keep a feeling of the situation." |
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| Pankaj Patel - India | Customer Loyalty by Providing a Complete Integrated Solution | "I work in a support organization of a well-known IT company. We believe customer loyalty is created by providing what the customer needs and that also should be a complete package. Customers will stick with a company whi |
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| Hakim Benz - Morocco | Keep Customer Loyalty During a Long Period | "When a company offers a good product adapted to customer needs and with a better quality/ price ratio, I think the company will be able to satisfy its customer for a long time." |
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| Alpin McGregor - UK | No Idea What is Meant by Customer Loyalty | "In recent months I have had several experiences when dealing with businesses, in particular financial institutions, where I am beginning to question whether senior management has any idea what is meant by customer loyalt |
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| George Amissah - Nigeria | Service Loyalty Versus Product Loyalty | "Can we differentiate loyalty for services and loyalty for products? Has there been any research to differentiate them?" |
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| Oloko Mununi Afolabi - Nigeria | Customer Loyalty is the Life Blood of Organization | "Customer loyalty should be a factor every firm out there is striving to achieve. Customer loyalty is what blood is to humans. It is the primary objective of every business to satisfy its customers by providing the |
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| John Nash - UK | CLV - Customer Lifetime Value | "Does anyone know a reference to the fist (or seminal) paper where CLV was defined - (MBA dissertation!). Also if anyone has a list of the main academics in this area it would help my literature review. Thanks." |
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| John Nobel - Australia | Customer Loyalty is Hard to Earn | "I reckon the best thing you can hope for is a regular refresh of your product/ services, and repeat purchase because of good customer satisfaction... Loyalty must be earned." |
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| Bernadette - Kenya | Customer Loyalty = Customer Retention | "Most firms believe that customer satisfaction is customer loyalty. Customer loyalty helps a firm to retain its customers. The cost of a retained customer is less than the cost of attracting a new one. I believe that any |
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| Bernadette - Kenya | Don't Assume your Customers are Loyal | "For customer loyalty to be successful, there is need for marketing/customer oriented executives who knows what customer retention is all about. From my current study, very few research papers have been done on customer r |
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| Bulisa Nazo - South Africa | Customer Retention Profile and Skill Set | "Do you have any ideas on recruitment and selection of the correct profile for retention in a Call Centre? What set of skills or training programs should one be looking at?
Do you have a set of KPIs to measure the indivi |
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Compare with: Customer Loyalty Program | Customer Relationship Management | Customer Satisfaction Model | SERVQUAL | Relationship Marketing | Relational Capital | Analytical CRM | Permission Marketing
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End of description Customer Loyalty. An explanation. |
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| └► Thabo Motsoasele (South Africa) | Customer Loyalty Starts at Shop Floor | "Customer loyalty is driven by what we say, do and the reaction time to their needs not their problems. Loyalty should begin in our shop floor staff since they are the real touch point of the customer, from then on |
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| └► Sergio Leite (Brazil) | Satisfaction Post-purchase | "I agree to Thabo Motsoasele, although there are products that do not require support services or do not depend on how friendly they were sold. Internally we all search for a reason able to justify our new purchase |
| └► Yasir Ali Khan (Pakistan) | Customer Loyalty is Personal | "Loyalty has a link with the nature of a person. If a person naturally shows loyalty in their behavior then definitely (s)he will show loyalty for buying and selling of goods or services. It is based on recent rese |
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| └► Adebolu Obawole (Nigeria) | Customer Loyalty Depends on Education of Customer | "For me, customer loyalty can be correlated with customer education in respect of the product as well as the customer education in respect of his/her literacy level generally. In a highly literate society, I b |
| └► D P Babu (India) | Customer Loyalty in a Monopoly | "Customer loyal in monopoly can get a break through by way of sensitization of supremacy of customer retention. |
| └► Edwin A. Ortiz Mundo (Puerto Rico) | The Impact of Technology on Customer Loyalty | "Technology, especially information technology, can certainly be a game changer for many companies. As both production and supply become globally distributed and more people go online, procurement practices are bou |
| └► Adam Sheikh (Kenya) | New vs Repeat Business | "A cardinal rule of any rational business person is to study the habits / preferences of the plethora of new customers out there who do not buy your product (non-repeat business) (Drucker). |
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| └► Charles Daley (Japan) | Customer Loyalty | "Loyalty is important however depending upon your market it is also important to grow your business. The two goals, improve loyalty and agressively seek to expand market share, are actually complementary< |
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| └► Firstep Eapl Astimen (Indonesia) | Customer Value Driven | "The essential thing dealing with customer loyalty is delivering product and service with dynamic aesthetic value for customer. It will create driving objectives to create continuous improvement and innovation in c |
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| └► Dr Sanjeev Sood (India) | Customer Loyalty | "Customer loyalty is more important than the first visit for any organization. This is even more true for healthcare organizations. |
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| └► Aleksandra Lah Steblaj (Slovenia) | Changing Customer Loyalty - How to Retain the Customer? | "It is very difficult to retain customer nowadays because there are so many offers on the market. Maybe the right strategy is to dose new parts of product or new services slowly enough to the customer so tha |
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| └► Emiel Veenstra (Netherlands) | Changing Customer Loyalty | "It is correct and I hear that from my customers more and more, that their customers are becoming less and less loyal. On the other hand though, I also have customers with a very strong binding element. Obviously because |
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| └► Faiz Laulloo (Mauritius) | Customers Became More Price Sensitive | "In the present economic context, it is extremely challenging to maintain repeat business. Customers tend to be more price sensitive. On the other hand, it would be a shame not to benefit from the downturn and use |
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| └► D P Babu (India) | Factors Leading to Customer Loyalty Changes | "Marketing insights provide us guidance how to consolidate the factors leading to (changes in) customer loyalty. Various demographic, psychographic and geographic factors shape customer tastes and preferences |
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| └► Etienne Chacon (Benin Republic) | Customer Care | "I think the most important now when we want our customer to be loyal is to enhance customer care service. That is, beside the product we sell and the service we provide, we have to create and sustain a good rel |
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| └► Edwin A. Ortiz Mundo (Puerto Rico) | Learning to Listen Will Make All the Difference | "More than loyalty, the issue is information. Customers today are much better informed about their options and feel more empowered to make their own decisions, rather than let us marketers chose for them. The one-s |
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| └► Gospel U Osadebe (Nigeria) | Paradigm Shift - Consumer | "The effect of the economic downturn actually forces consumers to demand increasingly value for their hard earned money on non-essential goods and services because they have to. The reverse is the case on essential |
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| └► Samson Chikaviro (Zimbabwe) | Fast Changing Customer Loyalty Places Strong Demands on the Marketing Wing | "I believe the marketing wing of an organisation has a tall order in maintaining customer loyalty. Marketing people need to be hands on and in sync with the rapidly changing tastes of the customers. This rapid chan |
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| └► Josh Hammermeister (Canada) | True Customer Loyalty vs Control | "I agree with Gospel Osadebe as well as Ahmed al-Kindi in the words "Seek first to understand, then to be understood" - Many consumers in western/north America have been brainwashed into loyalty by both corpo |
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| └► Sergio Leite (Brazil) | Paradigm Shift - Consumer II | "Plenty of information can generate rapid changes in the motivations of people. It is clear that preferences will always exist. They are a result of our decision-making power. Marketing is interested in knowing what |
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| └► Sergio Leite (Brazil) | Paradigm Shift - Consumers III | "Many times and without noticing it, we are reviewing our values due to the contact with information directly related to any of them. Information generates power and freedom. The freedom to analyze and choose. |
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| └► Peter (Kenya) | Customer Loyalty in Service Industry | "From experience while working in an education sector, I have noticed that customer loyalty is not easy to achieve, especially in a highly competitive market like the one we are operating in. Clients in most cases may com |
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| └► Harold J. Monger (Liberia) | Paradigm Shift in Customer Loyalty | "Consumers constantly go through paradigm shifts as they experience life changes in age, income, friends and more. Maintaining customers is best associated with lifestyles< |
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| └► Meriam Allias (Malaysia) | Customer Loyalty May Involve Religious Belief | "In my country, religion plays a very important role in customer loyalty. Products or services have to adhere to religious principles to be widely and continuously being accepted. |
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| └► Edwin A. Ortiz Mundo (Puerto Rico) | Is Loyalty an Illusion? The Empowered Customer | "The concept of customer loyalty itself was always a stretch to begin with. Customers were "loyal" when they perceived they had no other choice but the ones offered to them. What has not changed is the fact that cu |
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| └► Kenneth H. Casola (USA) | Customer Loyalty in Regards to Our Own Views of Loyalty | "I completely agree with Charles Daley of Japan in regards to "raving fans" being our best marketing tool. If we all consider that each of us is also a customer and consider our rationale for being loyal to a certa |
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| └► Peter (Kenya) | Customer Loyalty Changed over Time | "Perfect competitive market conditions obviously offer many product offerings that customers can choose from. Therefore customer loyalty is lower. In my country our culture has played a role in enhancing loyalty in the |
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| └► Ahidalgo0038@hotmail. Com (Ecuador) | Customer Loyalty Vs. Exponentially Production Capacity | "The current economy is very volatile, the low economic alti make consumers consider other possibilities. This creates loyalty factors pro-and anti-loyalty. Consider also that more and more countries of previously margina |
| └► Ahmed N. Qeshta (Palestine) | Customers Keeping or Buying | "I invest my money in keeping my customers because the cost of buying customer are 25 times higher than keeping a customer. |
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| └► Larry S King (USA) | My Customers Do Not Need Me | "It has been my experience that companies and/or company executives oft times forget who made them successful in their respective businesses. Customer loyalty goes hand in hand with customer service. Sad to say this |
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| └► Ethan Durda (USA) | Not All Customers are Worth Keeping | "In general keeping customers (and happy ones at that) should be a primary focus of any organization, but that is not an absolute. In my consulting I have more than once suggested that a company drop a customer or |
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| └► Andy Mellor (United Kingdoom) | Measuring the Benefit of Customer Retention | "I work in a small co. Providing technical industrial services. We take the retention of term contracts very seriously. Calculating the value of retention is easy knowing the amount of new business generated per unit c |
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| └► Prashant Choudhari (UAE) | Calculating the Benefits: Lifetime Value | "It's been proven across industries that acquiring new customers takes as much as 5-7 times more efforts and cost than retaining existing one. There are enough case studies available on this. Regarding calculating the ben |
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| └► Niraj Kumbhat (India) | Difficult to Measure the Benefits of Loyalty | "Customers are having many options available nowadays. The days of monopoly have gone. Particularly in India, customers are price sensitive and are looking for cut-throat prices. But yes, if the delivery is good and a rel |
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| └► Editor (Netherlands) | Customer Lifetime Value / Lifetime Value | "I think Prashant is pointing in a valuable direction. In the Customer Lifetime Value (CLV) concept, if a new (type of) customer costs €500 to acquire, and the CLV is €600, then the new (type of) custom |
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| └► Mrinal Ghosh (1) | Calculating Loyalty | "Loyalty can be calculated based on 3 metrics: - Intention to continue - Recommend the brand - Continue using the brand. The intersection of these will give you the % loyal |
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| └► Marcel Wiedenbrugge (NL) | Calculating CLV: Recommended Reading | "To Heins: finding a right balance is always the trick. As a company you need to focus on both keeping your (profitable) customers, growing & keeping smaller - but potentially big - customers and - unavoidably - getting n |
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| └► Joseph (Malta) | Loyalty Cards May Help | "Such measurements are never easy because they are never on a ceteris paribus basis since, inter alia, they deal with changing moods and competitor strategies to redirect loy |
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| └► Magesh Kumar (India) | Losing an Customer is Losing Double | "To editor, I don't exactly know how to calculate CLV in absolute terms, but just want to share with you a thought that struck me with respect to the cost of losing an existing customer. I feel it involves economic |
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| └► S Guin (India) | Calculating Customer Loyalty | "I completely agree with mr. Ghosh on this, assuming I am looking at service-industry, considering the fact that it is more or less oligopolistic with some exceptions (like, the hotel industry in Hawaii). However in the p |
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| └► Sindiso Coleman Dumulomo Tshuma (Zimbabwe) | Customer Loyalty helps to Survive Hars Times | "Customer loyalty is very important to the well being and livelihood of the company. This is particularly true especially in the service industry such as hotels or consultancy business where repeat business keeps you aflo |
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| └► Joseph (Malta) | Customer Loyalty | "One must not forget to mention the importance of interpersonal relationship; if there isn't one it must be created. Once created it must be nurtured continuously. This might sound a bit philosophical, but isn't it |
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| └► Nagaraj. B. R (India) | Customer Value or Loyalty | "The contents are good and very responsive. But there is no specific method to measure customer loyalty or value. |
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| └► Marcel Wiedenbrugge (Netherlands) | Customer Loyalty Measurement | "To Nagaraj: I think that the answer to this question is too complicated to answer in just a few lines. About calculating CLV: 1) We need to define the lifecycle of a customer in terms of: - How ma |
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| └► Md Hafeez Ahmed (India) | Customer Retention is Most Important to Make New Customer | "I am working on a special project of customer retention where I found keeping customer is very important. If a client switches to competive products, this doesn't mean he is not a loyal customer, the difference is you |
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| └► Tleli Makhetha (South Africa) | Definition of Customer Loyalty | "Marcel is correct, the answer is a little more involved. 1. A business has to first understand the critical success factors relevant to profitability and growth. 2. The next step is to calculate compa |
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| └► Rajesh Sharma (Nepal) | Customer is Always Loyal | "It like believing the enemy. I.e. the customer will always be loyal towards us. To keep the loyalty, companies must regularly survey the customer needs and act on that. |
| └► Kishore Singh (Oman) | Consistent Service + Product Quality = Customer Loyalty | "Consistent Service + Product Quality = Customer Loyalty Customer' intent for repurchase or repeat visits is a step / zone. Just before converting that specific customer base in loyalty are high quality service (i |
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| └► Emiel Veenstra (Netherlands) | Customer Satisfaction | "I like the customer satisfaction model from Kano very much. What you describe as taking for granted is Kano's basic factors. The customer expects a certain mini |
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| └► Nor Haziah (Malaysia) | Retaining Customer Loyalty | "Customer loyalty is a product of customer satisfaction, as mentioned. It must be earned. Honesty in advertising any new product is a must, in which the customer is told the advantages and disadvantages of the product. If |
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| └► Tim Boone (USA) | Customer Loyalty is NOT a Result of Customer Satisfaction | "Customer loyalty results from the margin between what customers expect and what they perceive they have received. Satisfaction is getting what you expect. In the case of satisfaction there is no positive margin, therefor |
| └► Rick McPherson (USA) | Customer Loyalty - Monopolies | "It is irrelevant that a firm is a monopoly in the long term... In our current environment customers get choices sooner or later... Different technologies, other services, or monopolies are busted (think railroads, |
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| └► Rajan Mani (India) | Customer Loyalty - Monopolies | "Rick McPerson is absolutely right. The Indian environment in the last two decades with the advent of liberalisation in the economy is replete with such examples of entities who have had their monopoly up-ended virtual |
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| └► Godfred Owusu Jnr (Ghana) | Customer Loyalty and Monopoly | "You might think that customer loyalty is not important for a company that has monopolised the market, but you are not always capable of knowing when a competitor is entering the market and what strategy the competitor wi |
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| └► D P Babu (India) | Customer Loyalty in Monopoly | "In a perfect monopoly there is no such thing as customer loyalty because customers are left with no choice. Unless a customer withdraws himself from the desire to acquire such product or service as a consequence o |
| └► Georges van Cauwenbergh (Ireland) | Customer Loyalty is About Emotions | "Trust and believe in your products and services is partially true. The customer is happy to purchase over and over again because he/she believes that the experience in doing so will satisfy the need(s) but more |
| └► John Troughton (Australia) | Providing What the Customer Needs | "In the old days, providing what the customer needs was enough (that includes the complete package). In 2010, the company has to ensure the wellbeing of the customer; that the product or service satisfies the healt |
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| └► Avinash Tavares (India) | Customer Loyalty = Employee Loyalty | "Customers will only be loyal to an organisation if they are satisfied with the quality of the product, obviously, and the way they are treated by the representatives of the firm, whether in sales or post-purchase |
| └► Belinda Paul (Australia) | Long Term Loyal Clients | "Long term loyal clients often expect / deserve incentives, rewards and/or bonuses for their loyalty. |
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| └► D P Babu (India) | Longterm Customers | "Long term customer loyalty is to manage customer segments with changing and extended utilities of product and service on competitive prices. |
| └► Balachandran Nair (India) | Senior Managers and Customer Loyalty | "When senior management or the CEO of a company is provoked into addressing customer complaints directly, it's time to call it a day. Customer dissatisfaction can increase when dedicated and assertive employees of the org |
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| └► Ann Maree Sathasivam (Australia) | Customer Loyalty | "How does the "appropriate" way of dealing with customers translated by executives to those working on the front line. People in high place who choose not to communicate their expectations and organizational standards are |
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| └► Laurie Vogt (South Africa) | Middle Layer of Management Removed | "The drive for profits has resulted in the removal of the middle layer of management in most companies. It looks great on the operating statements, but... Unfortunately, because senior management don't take the time |
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| └► Bala Subramanian (UK) | Understanding of Customer Loyalty | "I fully agree with Alpin McGregor. In his comment senior management is not having any idea of what customer loyalty means and increase the customer resentment rather than loyalty. The phrase that is used more and more is |
| └► Susan Kates (Canada) | Customer Loyality is About Building Relationships | "In the service business customer loyalty is about building relationships. That is how to convert potential buyers to loyal customers. |
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| └► George Amissah (Nigeria) | Service Loyalty Versus Product Loyalty | "Yes. Service loyalty is about building a relationship as the characters of inseperability and intangibility of services make thew relationship very relevant in the marketing of services. What of products and good |
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| └► D P Babu (India) | Difference Between Loyal for Services and Products | "Loyalty is the degree of satisfaction at which customers continue to consume products or services. However, the human element of loyalty should rather be seen from excellent after sales services than merely from h |
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| └► Ika Sari (Indonesia) | Good Loyalty for Products | "I think when customers are loyal to a product, it's only because they feel a 'click' to the product quality. So that even though they don't like the place, store, or the service, they will still come for the produ |
| └► Ford Thindwa (Zimbabwe) | Corporate Commitment | "Businesses should commit themselves to the creation and maintenance of true partnership with their customers in order to satisfy the mutual desire for wealth creation, based on the implementation of innovative, pr |
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| └► Alfred Osei-Frimpong (Ghana) | Customer Loyalty: a Success Story to Firms | "It cost more dollars to win new customers than to retain customers. Customers drive the business of the firm and are seen as the pivot of business success. It is prudent for firms to invest and improve on customer |
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| └► Rafael Reyes (Colombia) | Maximum Efforts for Customer Loyalty | "I'm agreeing with this note about customer loyalty. I think any firm needs to do maximum efforts to assure customers can come back to buy its product/service. Maximum efforts means a lot of things! |
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| └► Wambugu Ngatiah Wambugu (Kenya) | Customer Loyalty is Foundation | "Customer loyalty is not only a life blood to an organisation but also customer loyalty can be viewed as the foundation upon which any organisation is built. A foundation supports the entire building. It is tidious |
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| └► Godfred Owusu Jnr (Ghana) | Without Customer Loyalty There is no Business Growth | "You might think of having smart and productive marketers who bring in more clients to increase the company's productivity, but has the company thought of the cost incurred in acquiring new clients as compared to the c |
| └► Arslan (Pakistan) | Customer Life Time Value | "I need a description of customer life time value also. Thanks. |
| └► Luis Morales (Mexico) | How to Earn the Loyalty? | "Loyalty must be earned... Of course, but how can that be done? Maybe surprising the customer continuously with the best service or giving them an added value they never hope for? |
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| └► Vijeshh (UK) | Customer Loyalty can not be Guarenteed | "Customer loyalty is something which no company can guarantee. Even after exceeding their expectations, this no where guarantees that the customer will be loyal. I believe, it's the rapport, the relationship y |