Customer Loyalty

Knowledge Center

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.

Forum Forum about Customer Loyalty. Below you can ask a question about this topic, share your experiences, report a new development, or explain something. Start a new topic about Customer Loyalty Share your knowledge here (or ask a question)   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 t... 8   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?... 8   1 comments 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 ... 8   2 comments 🔥 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 new ones. Buchanan and Gilles (1990) provided several reasons why increased prof... 6   1 comments 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 m... 6   Loyalty Situation May Change Quickly! Sometimes a change of purchasing manager can change the scenario drastically, so the seller should keep transversal contact in the company to always keep a feeling of the situation.... 5   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 skills or training programs should one be looking at? Do you know of a set of KPI... 5   1 comments 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? ... 5   1 comments 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 customer is not satisfied with the service/product. What is termed "loyalty" becau... 5   2 comments Don't Assume your Customers are Loyal For customer loyalty to be successful, marketing/customer oriented executives are needed who know what customer retention is all about. From my current study, very few research papers have been done ... 4   1 comments 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 pref... 3   2 comments 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 the customer needs and that also should be a complete package. Customers will stic... 2   2 comments The Value of Customer Retention Most firms believe that customer satisfaction and customer loyalty helps them to retain their customers. The cost of a retained customer is less than the cost of attracting a new one. I believe that... 2   2 comments Service Loyalty Versus Product Loyalty Can we differentiate loyalty for services and loyalty for products? Has there been any research to differentiate them?... 2   4 comments No Idea What is Meant by Customer Loyalty In recent months I have had several experiences when dealing with businesses, in particular financial institutions, where I am beginning to question whether senior management has any idea what is mean... 1   4 comments 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.... 1   2 comments 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 ... 1   5 comments 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.... 1   2 comments

Best Practices The best, top-rated topics 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 also generated the speed with which consumers began to change habits, brands and p... 54   23 comments 🥈 Marketing and Customer Loyality What kind of relationship exist between marketing and customer loyality?... 48   🥉 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 establishme... 46   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..... 40   2 comments 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?... 30   4 comments What is Customer Loyalty? Customer loyalty is when a customer can ignore competition because of his trust and belief in your products/services.... 21   2 comments 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 ... 11   4 comments 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 customers. Measuring buying customer is easy. But how do we measure the benefi... 11   19 comments

Expert Tips Advanced insights about Customer Loyalty. Here you will find professional advices by experts. A Closer Look Into Customer Value Customer Value Analysis, Strategic Marketing, Innovation Strategy It is often argued that customer value is required for staying competitive and successful as organization. But in what w... The Relationship Between Loyalty and Satisfaction Customer Loyalty, Brand Loyalty, Customer Satisfaction, CRM Of course there is a relationship between Satisfaction and Loyalty. Satisfaction can be seen as consistency between prio... Customer Centricity: Success Factors for Customer Intimacy Value Disciplines, Customer Strategy, Customer Intimacy, Customer-oriented, CRM Customer / Consumer Centricity (CC) is a frequently used concept used by companies to achieve competitive advantages. It... The Actual Relationship Between Cross-buying and Consumer Loyalty Customer Loyalty, Consumer Loyalty, Cross-Selling, Cross-Buying, Sales Management, Account Management There has been an ongoing discussion as to whether cross-buying (buying goods from various categories) is the consequenc... The Influence of Switching Costs on Consumer Loyalty Consumer Loyalty, Customer Loyalty, Consumer Behavior Many companies invest a lot of money and time to establish switching costs in order to reduce the probability that custo... Customer Relationship TYPES CRM, Relation Marketing, Branding Next time you're using the term "CRM", remember there's an R in it... The R of "Relationship". Actually, customers (wan... The Customer Value Scorecard Prioritizing CRM Opportunities According to Behram Hansotia, the Customer Value Scorecard (CVS) is a valuable tool to help prioritize CRM opportunities... The Three Stage Model of Service Consumption (Service Encounter) Consumption Behavior, Service Marketing, Strategic Marketing Management According to the three-stage model of service consumption, consumers go through 3 stages of service encounter namely; th... Extreme Customer Trust as a Source of Competitive Advantage Competitive Advantage, CRM, Customer Loyalty, Customer Intimacy Many companies are already highlighting the importance of trustworthiness by setting and sustaining honest prices and pr... How to Build Customer-Centric Organizations Holistic CRM In order to implement CRM in a holistic way and to make the customer the focal point of a company's strategy, Behram Han... Implementing Customer Equity Management Step-by-step Guide Customer equity can be seen as the lifetime value of a companies’ existing customer base plus the expected future lifeti... Strategies for Strategic Philanthropy (Norton) Strategic Philanthropy, Corporate Philanthropy, Corporate Social Responsibility, Customer Loyalty A lot of companies are trying to use philanthropic activities to improve factors as customer loyalty and brand awareness...

Information Sources Various sources of information regarding Customer Loyalty. Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops. Service Quality Models SERVQUAL, Service Quality Management, CRM, CEM, Customer Loyalty, Customer Satisfaction This presentation elaborates on service quality, especially focusing on perceptions and expectations of consumers and th... Introduction to Customer/Consumer Satisfaction Consumer Satisfaction, Customer Satisfaction 1. What is satisfaction? 2. Satisfaction focuses on fulfillment in varieties 3. What is dissatisfaction? 4. Manageria... How to Deliver Exceptional Customer Service and Client Satisfaction Customer Experience Management, Customer Satisfaction, Customer Service, CRM This presentation elaborates briefly on customer service delivery for customer experience management. The presentation i... Customer Value Management Organizational Management, Value Creation Preesentation about Customer Value Management (CVM) by J. Blanc. It includes the following sections: 1. Definition of C... Consumer Behavior in the Service Sector Decision Making, Behavioral Economics Presentation about consumer behavior in services. The presentation includes the following files: 1. Consumer Problems ... The Internet / Social Media Revolution Social Media, Internet Strategy, Internet Impact, Digital Revolution Video shows how fast social media is growing. And gives a clear status of the position of social media by 2014. Great s... Customer Loyalty: Retaining Customers And Solving Customer Complaints Customer Loyalty, Customer Retention, Brand Loyalty Presentation about loyalty that also include strategies to retain consumers and the identification and management of con... Customer Value, Satisfaction and Loyalty Customer Retention, Consumer Managment Simple presentation about Customer Value, Satisfaction and Loyalty. The presentation includes the following: 1. Manager...

Research Links Jump to further research sources regarding Customer Loyalty. News Videos Presentations   Books Academic More

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

Return to Management Hub: Marketing & Sales  |  Strategy & Innovation

More on Management  |  Return to Management Dictionary

This ends our Customer Loyalty summary and forum.