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 opportunities to enhance their customers' experience by integrating solutions related to troubleshooting on the one hand and optimizing performance on the other hand. Smart technology is attractive for ...
  Using Multi-Item Measurement Scales in Marketing Research
If you really want to say something (quantitatively) about things like customer attitude, customer behavior, brand loyalty or commitment towards a brand, product or an organization you need reliable measurement scales. These are often used in marketi...
  Customer Loyalty in Business-To-Business Context
Understanding what makes business-to-business (B2B) relationships lasting and stable is one of the main areas of academic interest in the study of organizational relations. To retain the organizationís current customers and to make them loyal is a cr...
  How can Employee Retention Help to Build Customer Loyalty?
Hi, I'm wondering in what ways retaining employees may help to build customer loyalty? Thanks for your ideas... Any journals for more info?...
  Customer Loyalty in Consumer Durable Products
Being an MBA student, I'm doing a project on "customer loyalty related to consumer durable products".
So I want to ask you which parameters I should focus on and other tips? Plz suggest me.. Thanks.....
  Marketing and Customer Loyality
What kind of relationship exist between marketing and customer loyality?...
  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 relationships?...
  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 recognised by the customer that b...
  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 or service due to advertisemen...
  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 best a false loyalty....
  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 well informed about the attribut...
  Service Loyalty Versus Product Loyalty
Can we differentiate loyalty for services and loyalty for products? Has there been any research to differentiate them?...
  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?...
  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 them with quality products and se...
  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....
  What is Customer Lifetime Value (CLV)?
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....
  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 happy the customer is with the...
  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....
  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 retention and most business ten...

Customer Loyalty Special Interest Group

Special Interest Group


Best Practices - Customer Loyalty Premium
  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, in turn directly related to the...
  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 (not just the save desk)?...

Expert Tips - Customer Loyalty Premium

Customer Centricity: Success Factors for Customer Intimacy

Customer / Consumer Centricity (CC) is a frequently used concept used by companies to achieve competitive advantages. It is often believed that CC can...
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 cross-buying (buying goods from various categories) is the consequence of customer loyalty or if lo...
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 establish switching costs in order to reduce the probability that customers will switch to a competit...
Usage (application): Consumer Loyalty, Customer Loyalty, Consumer Behavior

Customer Relationship TYPES

Next time you're using the term "CRM", remember there's an R in it... The R of "Relationship".
Actually, customers (want to) have many different ...
Usage (application): CRM, Relation Marketing, Branding

A Closer Look Into Customer Value

It is often argued that customer value is required for staying competitive and successful as organization. But in what ways can customer value be a cr...
Usage (application): Customer Value Analysis, Strategic Marketing, Innovation Strategy

The Customer Value Scorecard

According to Behram Hansotia, the Customer Value Scorecard (CVS) is a valuable tool to help prioritize CRM opportunities. The CVS shows ...
Usage (application): Prioritizing CRM Opportunities

Extreme Customer Trust as a Source of Competitive Advantage

Many companies are already highlighting the importance of trustworthiness by setting and sustaining honest prices and providing reasonable services. A...
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 make the customer the focal point of a company's strategy, Behram Hansotia argues in the art...
Usage (application): Holistic CRM

Implementing Customer Equity Management

Customer equity can be seen as the lifetime value of a companiesí existing customer base plus the expected future lifetime value of newly ac...
Usage (application): Step-by-step Guide

Strategies for Strategic Philanthropy (Norton)

A lot of companies are trying to use philanthropic activities to improve factors as customer loyalty and brand awareness and thereby increasing sales....
Usage (application): Strategic Philanthropy, Corporate Philanthropy, Corporate Social Responsibility, Customer Loyalty

Resources - Customer Loyalty Premium

Service Quality Models

This presentation elaborates on service quality, especially focusing on perceptions and expectations of consumers and the ways in which efficiently ca...
Usage (application): SERVQUAL, Service Quality Management, CRM, CEM, Customer Loyalty, Customer Satisfaction

Introduction to Customer/Consumer Satisfaction

1. What is satisfaction?
2. Satisfaction focuses on fulfillment in varieties
3. What is dissatisfaction?
4. Managerial concern with sat...
Usage (application): Consumer Satisfaction, Customer Satisfaction

How to Deliver Exceptional Customer Service and Client Satisfaction

This presentation elaborates briefly on customer service delivery for customer experience management. The presentation includes the following sections...
Usage (application): Customer Experience Management, Customer Satisfaction, Customer Service, CRM

Customer Value Management

Preesentation about Customer Value Management (CVM) by J. Blanc. It includes the following sections:
1. Definition of Customer Value
2. Stag...
Usage (application): Organizational Management, Value Creation

Consumer Behavior in the Service Sector

Presentation about consumer behavior in services. The presentation includes the following files:
1. Consumer Problems
2. Search, Experience ...
Usage (application): Decision Making, Behavioral Economics

The Internet / Social Media Revolution

Video shows how fast social media is growing. And gives a clear status of the position of social media by 2014.
Great starter for a discussion, p...
Usage (application): Social Media, Internet Strategy, Internet Impact, Digital Revolution

Customer Loyalty: Retaining Customers And Solving Customer Complaints

Presentation about loyalty that also include strategies to retain consumers and the identification and management of conflicts with customers. The fol...
Usage (application): Customer Loyalty, Customer Retention, Brand Loyalty

The Importance of Noncustomers

Even the biggest enterprises (other than a government monopoly) has many more noncustomers than it has customers". Peter Drucker in "Management Challe...
Usage (application): Market Research, Customer Strategy, Innovation Strategy, Customer Loyalty Pitfalls

Customer Value, Satisfaction and Loyalty

Simple presentation about Customer Value, Satisfaction and Loyalty. The presentation includes the following:
1. Managerial Paradigm
2. Amazo...
Usage (application): Customer Retention, Consumer Managment


Customer Loyalty


Customer Loyalty


Customer Loyalty


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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