Customer Loyalty

Knowledge Center


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:

  • 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 Special Interest Group

Special Interest Group (84 members)

Customer Loyalty Forum  

Recent topics

  Using Multi-Item Measurement Scales in Marketing Research      
  Is Keeping Existing Customers Always Better than Acquiring New Ones?      
  How Manufacturers can create Smart Products to Enhance Customer Loyalty      

Best Practices - Customer Loyalty
  Paradigm Shift - Consumers
  Marketing and Customer Loyality
  When to Establish a Business Relationship?
  Customer Loyalty in Consumer Durable Products
  Customer Loyalty in Monopoly
  What is Customer Loyalty?

All you need to know about management

  Customer Satisfaction = Customer Loyalty?
  Calculating the Benefits of Keeping Customers
  How can Employee Retention Help to Build Customer Loyalty?
  Customer Loyalty is Created via Total Value Chain
  Attitudinal and Behavioral Loyalty
  Loyalty Situation May Change Quickly!
  Customer Loyalty is Individual
  Customer Loyalty by Providing a Complete Integrated Solution
  Service Loyalty Versus Product Loyalty
  Customer Loyalty in a Monopoly
  No Idea What is Meant by Customer Loyalty
  Customer Loyalty is Hard to Earn
  Customer Loyalty is the Life Blood of Organization
  Keep Customer Loyalty During a Long Period
  Customer Loyalty = Customer Retention
  What is Customer Lifetime Value (CLV)?
  Customer Loyalty in Business-To-Business Context
  Don't Assume your Customers are Loyal
  Customer Retention Profile and Skill Set

Expert Tips - Customer Loyalty

Customer Centricity: Success Factors for Customer Intimacy


The Actual Relationship Between Cross-buying and Consumer Loyalty


The Influence of Switching Costs on Consumer Loyalty


Customer Relationship TYPES


A Closer Look Into Customer Value


The Customer Value Scorecard


Extreme Customer Trust as a Source of Competitive Advantage


How to Build Customer-Centric Organizations


Implementing Customer Equity Management


Strategies for Strategic Philanthropy (Norton)


Advance yourself in business administration and management

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


More about Customer Loyalty


Accelerate your management career

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

Special Interest Group Leader


Return to Management Hub: Marketing  |  Strategy

More on Management  |  Return to Management Dictionary  | 


This ends our Customer Loyalty summary and forum.

About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
2018 12manage - The Executive Fast Track. V14.1 - Last updated: 16-10-2018. All names of their owners.