Customer Loyalty in Monopoly

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Customer Loyalty in Monopoly
Emmanuel Osafo Gyane, Member
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 - Monopolies
Rick McPherson, Member
It is irrelevant that a firm is a monopoly in the long term... In our current environment customers get choices sooner or later... Different technologies, other services, or monopolies are busted (think railroads, phone companies). Monopolies without loyalty encourage alternatives to be born, and government to deregulate. And when competition does come, the firm that has not built loyalty will be in a tailspin, with a culture of poor customer service and value that probably cannot be changed. Loyal customers help to maintain the monopoly, if that is what a firm seeks!

Customer Loyalty - Monopolies
Rajan Mani, Member
Rick McPerson is absolutely right. The Indian environment in the last two decades with the advent of liberalisation in the economy is replete with such examples of entities who have had their monopoly up-ended virtually overnight. Those who were smart enough to realise or anticipate the change in the customer's value proposition (value = benefits / price) survived. Others have become history.

Customer Loyalty and Monopoly
Godfred Owusu Jnr, Member
You might think that customer loyalty is not important for a company that has monopolised the market, but you are not always capable of knowing when a competitor is entering the market and what strategy the competitor will be using.

Customer Loyalty in Monopoly
D P BABU, Member
In a perfect monopoly there is no such thing as customer loyalty because customers are left with no choice. Unless a customer withdraws himself from the desire to acquire such product or service as a consequence of decreased quality/utility, customer loyalty in monopoly is a compulsion.


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