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.


Customer Loyalty Forum
  How Manufacturers can create Smart Products to Enhance Customer Loyalty
Smart technology can provide manufacturers with op...
     
 
  Using Multi-Item Measurement Scales in Marketing Research
If you really want to say something (quantitativel...
     
 
  Customer Loyalty in Business-To-Business Context
Understanding what makes business-to-business (B2B...
     
 
  How can Employee Retention Help to Build Customer Loyalty?
Hi, I'm wondering in what ways retaining employees...
     
 
  Customer Loyalty in Consumer Durable Products
Being an MBA student, I'm doing a project on "cust...
     
 
  Marketing and Customer Loyality
What kind of relationship exist between marketing ...
     
 
  When to Establish a Business Relationship?
Under what conditions is it even appropriat...
     
 
  Customer Loyalty is Created via Total Value Chain
Customer loyalty is not only related to the servic...
     
 
  Customer Loyalty is Individual
Customer loyalty is all about individual feelin...
     
 
  Customer Loyalty in a Monopoly
In monopoly, there is no true customer loyalty. Th...
     
 
  Attitudinal and Behavioral Loyalty
Customer loyalty can be classified into attitudina...
     
 
  Service Loyalty Versus Product Loyalty
Can we differentiate loyalty for services and loya...
     
 
  Customer Loyalty in Monopoly
The issues raised are quite relevant for present d...
     
 
  Customer Loyalty is the Life Blood of Organization
Customer loyalty should be a factor every firm out...
     
 
  Keep Customer Loyalty During a Long Period
When a company offers a good product adapted to cu...
     
 
  What is Customer Lifetime Value (CLV)?
Does anyone know a reference to the fist (or semin...
     
 
  Customer Satisfaction = Customer Loyalty?
Having been on the "front lines" of customer servi...
     
 
  Customer Loyalty is Hard to Earn
I reckon the best thing you can hope for is a regu...
     
 
  Don't Assume your Customers are Loyal
For customer loyalty to be successful, there is ne...
     
 

Customer Loyalty Special Interest Group


Special Interest Group

 

Best Practices - Customer Loyalty Premium
  Paradigm Shift - Consumers
Customers are increasingly demanding, less loya...
     
 
  Calculating the Benefits of Keeping Customers
Hello all, I have a question which repeatedly pops...
     
 

Expert Tips - Customer Loyalty Premium
 

Customer Centricity: Success Factors for Customer Intimacy

Customer / Consumer Centricity (CC) is a frequentl...
Usage (application): Value Disciplines, Customer Strategy, Customer Intimacy, Customer-oriented, CRM
 
 
 

The Actual Relationship Between Cross-buying and Consumer Loyalty

There has been an ongoing discussion as to whether...
Usage (application): Customer Loyalty, Consumer Loyalty, Cross-Selling, Cross-Buying, Sales Management, Account Management
 
 
 

The Influence of Switching Costs on Consumer Loyalty

Many companies invest a lot of money and time to e...
Usage (application): Consumer Loyalty, Customer Loyalty, Consumer Behavior
 
 
 

Customer Relationship TYPES

Next time you're using the term "CRM", remember th...
Usage (application): CRM, Relation Marketing, Branding
 
 
 

A Closer Look Into Customer Value

It is often argued that customer value is required...
Usage (application): Customer Value Analysis, Strategic Marketing, Innovation Strategy
 
 
 

The Customer Value Scorecard

According to Behram Hansotia, the Customer Valu...
Usage (application): Prioritizing CRM Opportunities
 
 
 

Extreme Customer Trust as a Source of Competitive Advantage

Many companies are already highlighting the import...
Usage (application): Competitive Advantage, CRM, Customer Loyalty, Customer Intimacy
 
 
 

How to Build Customer-Centric Organizations

In order to implement CRM in a holistic way and to...
Usage (application): Holistic CRM
 
 
 

Implementing Customer Equity Management

Customer equity can be seen as the lifet...
Usage (application): Step-by-step Guide
 
 
 

Strategies for Strategic Philanthropy (Norton)

A lot of companies are trying to use philanthropic...
Usage (application): Strategic Philanthropy, Corporate Philanthropy, Corporate Social Responsibility, Customer Loyalty
 
 

Resources - Customer Loyalty Premium

Service Quality Models

This presentation elaborates on service quality, e...
Usage (application): SERVQUAL, Service Quality Management, CRM, CEM, Customer Loyalty, Customer Satisfaction
 

Introduction to Customer/Consumer Satisfaction

1. What is satisfaction?
2. Satisfaction focu...
Usage (application): Consumer Satisfaction, Customer Satisfaction
 

How to Deliver Exceptional Customer Service and Client Satisfaction

This presentation elaborates briefly on customer s...
Usage (application): Customer Experience Management, Customer Satisfaction, Customer Service, CRM
 

Customer Value Management

Preesentation about Customer Value Management (CVM...
Usage (application): Organizational Management, Value Creation
 

Consumer Behavior in the Service Sector

Presentation about consumer behavior in services. ...
Usage (application): Decision Making, Behavioral Economics
 

The Internet / Social Media Revolution

Video shows how fast social media is growing. And ...
Usage (application): Social Media, Internet Strategy, Internet Impact, Digital Revolution
 

Customer Loyalty: Retaining Customers And Solving Customer Complaints

Presentation about loyalty that also include strat...
Usage (application): Customer Loyalty, Customer Retention, Brand Loyalty
 

The Importance of Noncustomers

Even the biggest enterprises (other than a governm...
Usage (application): Market Research, Customer Strategy, Innovation Strategy, Customer Loyalty Pitfalls
 

Customer Value, Satisfaction and Loyalty

Simple presentation about Customer Value, Satisfac...
Usage (application): Customer Retention, Consumer Managment
 
 

News about Customer Loyalty


     
 

Videos about Customer Loyalty


     
 

Presentations about Customer Loyalty


     
 

Books about Customer Loyalty


     
 

More about Customer Loyalty


     

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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