Customer Loyalty

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What is Customer Loyalty? Meaning.

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 (79 members)

Forum about Customer Loyalty  

The most recent topics about: Customer Loyalty.

How Manufacturers can create Smart Products to Enhance Customer Loyalty
Smart technology can provide manufacturers with opportunities to enhance their customers' experience by integrating solu (...)
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🔥 NEW Keeping Existing Customers is NOT Always Better than Acquiring New Ones!
A fundamental assumption of customer loyalty models is that keeping existing customers is less expensive than acquiring (...)
1 reactions
Using Multi-Item Measurement Scales in Marketing Research
If you really want to say something (quantitatively) about things like customer attitude, customer behavior, brand loyal (...)
0 reactions
Best Practices about Customer Loyalty

Here you will find the most valuable ideas and practical suggestions.

🥇 Paradigm Shift - Consumers
Customers are increasingly demanding, less loyal and ephemeral. I am convinced that the speed and mass of information al (...)
23 reactions

🥈 Marketing and Customer Loyality
What kind of relationship exist between marketing and customer loyality? (...)
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🥉 When to Establish a Business Relationship?
Under what conditions is it even appropriate for a company to consider establishing relationships with customers? What a (...)
0 reactions

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 (...)
2 reactions

Customer Loyalty in Monopoly
The issues raised are quite relevant for present day businesses in a perfect/competitive market setting. What about if a (...)
4 reactions

What is Customer Loyalty?
Customer loyalty is when a customer can ignore competition because of his trust and belief in your products/services. (...)
2 reactions

Customer Satisfaction = Customer Loyalty?
Having been on the "front lines" of customer service/management for many years, it has been my experience that although (...)
4 reactions

Calculating the Benefits of Keeping Customers
Hello all, I have a question which repeatedly pops up: where to invest your money: in keeping customers or in new buying (...)
19 reactions

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 jour (...)
1 reactions

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 (...)
2 reactions

Loyalty Situation May Change Quickly!
Sometimes a change of purchasing manager can change the scenario drastically, so the seller should keep transversal cont (...)
0 reactions

What is a Typical Skill Set or Profile of Customer Retention (Call Center) Reps?
Do you have any ideas on recruitment and selection of the correct profile for retention in a call centre? What set of sk (...)
1 reactions

Attitudinal and Behavioral Loyalty
Customer loyalty can be classified into attitudinal and behavioral loyalty. Have changes (advancement) in technology cha (...)
1 reactions

Compulsory Customer Loyalty in a Monopoly
In monopoly, there is usually no true customer loyalty. This is because the customer has no alternative, even if the cus (...)
2 reactions

Don't Assume your Customers are Loyal
For customer loyalty to be successful, marketing/customer oriented executives are needed who know what customer retentio (...)
1 reactions

Customer Loyalty is Individual
Customer loyalty is all about individual feelings. One person may feel good about a product or service, another may be o (...)
2 reactions

Customer Loyalty by Providing a Complete Integrated Solution
I work in a support organization of a well-known IT company. We believe customer loyalty is created by providing what th (...)
2 reactions

The Value of Customer Retention
Most firms believe that customer satisfaction and customer loyalty helps them to retain their customers. The cost of a (...)
2 reactions

Service Loyalty Versus Product Loyalty
Can we differentiate loyalty for services and loyalty for products? Has there been any research to differentiate them? (...)
4 reactions

No Idea What is Meant by Customer Loyalty
In recent months I have had several experiences when dealing with businesses, in particular financial institutions, wher (...)
4 reactions

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 (...)
2 reactions

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 hu (...)
5 reactions

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 compa (...)
2 reactions

Expert Tips about Customer Loyalty

Here you will find professional advices by experts.

The Relationship Between Loyalty and Satisfaction

Customer Loyalty, Brand Loyalty, Customer Satisfaction, CRM (...)

Customer Centricity: Success Factors for Customer Intimacy

Value Disciplines, Customer Strategy, Customer Intimacy, Customer-oriented, CRM (...)

The Actual Relationship Between Cross-buying and Consumer Loyalty

Customer Loyalty, Consumer Loyalty, Cross-Selling, Cross-Buying, Sales Management, Account Management (...)

The Influence of Switching Costs on Consumer Loyalty

Consumer Loyalty, Customer Loyalty, Consumer Behavior (...)

Customer Relationship TYPES

CRM, Relation Marketing, Branding (...)

A Closer Look Into Customer Value

Customer Value Analysis, Strategic Marketing, Innovation Strategy (...)

The Customer Value Scorecard

Prioritizing CRM Opportunities (...)

Extreme Customer Trust as a Source of Competitive Advantage

Competitive Advantage, CRM, Customer Loyalty, Customer Intimacy (...)

How to Build Customer-Centric Organizations

Holistic CRM (...)

Implementing Customer Equity Management

Step-by-step Guide (...)

Strategies for Strategic Philanthropy (Norton)

Strategic Philanthropy, Corporate Philanthropy, Corporate Social Responsibility, Customer Loyalty (...)
Information Sources about Customer Loyalty

Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops.

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Introduction to Customer/Consumer Satisfaction

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How to Deliver Exceptional Customer Service and Client Satisfaction

Customer Experience Management, Customer Satisfaction, Customer Service, CRM (...)

Customer Value Management

Organizational Management, Value Creation (...)

Consumer Behavior in the Service Sector

Decision Making, Behavioral Economics (...)

The Internet / Social Media Revolution

Social Media, Internet Strategy, Internet Impact, Digital Revolution (...)

Customer Loyalty: Retaining Customers And Solving Customer Complaints

Customer Loyalty, Customer Retention, Brand Loyalty (...)

Customer Value, Satisfaction and 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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