Customer Loyalty

Knowledge Center

12manage is looking for students / contributors...


Description of Customer Loyalty. Explanation.


  1. Summary
  2. Forum
  3. Best Practices
  4. Expert Tips
  5. Resources
  6. Print

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
  Is Keeping Existing Customers Always Better than Acquiring New Ones?
A fundamental assumption of customer loyalty model...
  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...

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 IntimacySign up

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 LoyaltySign up

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 LoyaltySign up

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

Customer Relationship TYPESSign up

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

A Closer Look Into Customer ValueSign up

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

The Customer Value ScorecardSign up

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

Extreme Customer Trust as a Source of Competitive AdvantageSign up

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

How to Build Customer-Centric OrganizationsSign up

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

Implementing Customer Equity ManagementSign up

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

Strategies for Strategic Philanthropy (Norton)Sign up

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 ModelsSign up

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

Introduction to Customer/Consumer SatisfactionSign up

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

How to Deliver Exceptional Customer Service and Client SatisfactionSign up

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

Customer Value ManagementSign up

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

Consumer Behavior in the Service SectorSign up

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

The Internet / Social Media RevolutionSign up

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 ComplaintsSign up

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

The Importance of NoncustomersSign up

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

Customer Value, Satisfaction and LoyaltySign up

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

News about Customer LoyaltySign up


Videos about Customer LoyaltySign up


Presentations about Customer LoyaltySign up


Books about Customer LoyaltySign up


More about Customer LoyaltySign up


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

You here


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: 14-8-2018. All names of their owners.