Customer Loyalty

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Description of Customer Loyalty. Explanation.

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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:

  • The cost of acquisition occurs only at the beginning of a relationship: the longer the relationship, the lower the amortized cost.

  • Account maintenance costs decline as a percentage of total costs (or as a percentage of revenue).

  • Long term customers tend to be less inclined to switch and also tend to be less price sensitive. This can result in stable unit sales volume and increases in dollar-sales volume.

  • Long term customers may initiate free Word of Mouth promotions and referrals.

  • Long term customers are more likely to purchase ancillary products and high-margin supplemental products.

  • Long term customers tend to be satisfied with their relationship with the company and are less likely to switch to competitors, making market entry or competitors' market share gains difficult.

  • Regular customers tend to be less expensive to service because they are familiar with the processes involved, require less "education," and are consistent in their order placement.

  • Increased customer retention and loyalty makes the employees' jobs easier and more satisfying. In turn, happy employees feed back into higher customer satisfaction in a virtuous circle.


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  Customer Satisfaction = Customer Loyalty?
     
 
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  Customer Loyalty is Created via Total Value Chain
     
 
  Attitudinal and Behavioral Loyalty
     
 
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  Customer Loyalty in Business-To-Business Context
     
 
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Expert Tips - Customer Loyalty
 

Customer Centricity: Success Factors for Customer Intimacy

 
 
 

The Actual Relationship Between Cross-buying and Consumer Loyalty

 
 
 

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A Closer Look Into Customer Value

 
 
 

The Customer Value Scorecard

 
 
 

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How to Build Customer-Centric Organizations

 
 
 

Implementing Customer Equity Management

 
 
 

Strategies for Strategic Philanthropy (Norton)

 
 



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Resources - Customer Loyalty

Service Quality Models

 

Introduction to Customer/Consumer Satisfaction

 

How to Deliver Exceptional Customer Service and Client Satisfaction

 

Customer Value Management

 

Consumer Behavior in the Service Sector

 

The Internet / Social Media Revolution

 

Customer Loyalty: Retaining Customers And Solving Customer Complaints

 

The Importance of Noncustomers

 

Customer Value, Satisfaction and Loyalty

 
 

News about Customer Loyalty


     
 

Videos about Customer Loyalty


     
 

Presentations about Customer Loyalty


     
 

Books about Customer Loyalty


     
 

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Compare with: Customer Loyalty Program  |  Customer Relationship Management  |  Customer Satisfaction Model  |  Hospitality Management  |  SERVQUAL  |  Relationship Marketing  |  Relational Capital  |  Analytical CRM  |  Permission Marketing

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