The Customer loyalty has been a major and unanimously acknowledged as a valuable asset in competitive markets according to Srivastava, Shervani, & Fahey, 2000. As a result, it becomes more important to give power to in loyalty panel particularly when the consumers faces very low switching or moving cost to other product or service, because they are not locked in by a contract (Shapiro & Vivian, 2000). It is also become important in competitive markets due to availability of more lucrative and easily available options. The concept of customer loyalty has been around and present throughout in all parts/activities of numerous industries in the past decade (Lewis, 1997). The development of loyalty includes building and supporting a relationship with a customer, which leads to the repetitive purchase of products or services over a given period of time. A loyal customer base also permits companies to offer their expertise and skills to other business matters (Gefen, 2002; Rowley & Dawes, 2000). In order to understand what drives customer loyalty or how your business defines customer loyalty we can look at the behavioral aspect of it. Customers can show their loyalty in a number of ways. They can prefer to stay with a firm, whether this persistence is distinct as a relationship or not, or they can increase the number of purchases, or they can do both (Reinartz & Kumar, 2003; Rowley & Dawes, 2000). The purpose of this research is to link loyalty to the up-and-coming theories of CRM (Macintosh & Lockshin, 1997) or as the key element, of effective CRM. Although some authors, such as Dick & Basu (1994), have different view of each element of it and make a distinction between brand loyalty, store loyalty, sales people loyalty, product and ser...
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...ection of cognitive and affective elements was analyzed by Oliver (1999). Attitudinal loyalty can at times lead customers to provide exceptional value to the company through positive word of mouth researched by Dick & Basu, 1994; Hagel & Armstrong, 1997; Reichheld, 2003. Letdown to relation for attitudinal loyalty could lead to false loyalty (Dick & Basu, 1994). Thus, to attain true loyalty, firms should in tandem focus on building both behavioral and attitudinal loyalty. So if we look at both the service management and the marketing literatures both suggest that there is a well-built theoretical foundation for an experiential examination of the linkages among customer satisfaction, customer loyalty, and profitability. Storbacka argues that there is comparatively little amount of empirical research performed on these relationships to date (Storbacka et al., 1994)
When a customer is loyal he or she will definitely repeat purchase and even advertise your organization through word of mouth. Customer loyalty is the act of customers buying repeatedly as opposed to choosing those of competitors (Wyse, 2012). The impact of customer satisfaction on customer loyalty was showed in a study conducted by Mitchell (2004) who revealed a positive relationship between customer satisfaction and loyalty. Customer loyalty requires that firms or organizations meet their customers’ needs and demands in order to maintain a long lasting relationship (Campton, 2004). Coldburn (2013) also showed that satisfaction and loyalty goes together. The author indicated in his/her study that as far as customers expectation of a products or services are met, they remain loyal to the organization. An increase in satisfaction then lead to an increase in a company’s profits (Cacioappo, 2000).Eckert emphasizes that loyal customers according to are more likely to purchase or to recommend the purchase of a company’s products and services to someone else. The opposite is also true. Dissatisfied customers are likely to tell others the experiences they had with firms. Firms therefore will need to improve their customer satisfaction in order to grow loyalty and attract new customers (Agarwal,
Today the retailing sector is one of the fastest growing sectors in the world. Retailers nowadays understand the importance of satisfying customer needs as essentially customers determine how successful an organisation will be. Retailers such as Tesco and Aldi today continually aim to provide Superior quality merchandise to customers whilst enforcing quality control thus this area could be said to be central to a retail company’s success. In addition retail firms are also constantly striving for the best quality customer service possible to gain a completive edge over rivals, customer loyalty and the quality of their customer service is at the forefront of the minds of some of the leading retailers. This is due the understanding that those factors play a large part in the success of retail companies as ultimately it all comes down to whether or not the customer is satisfied. What constitutes customer loyalty and what makes up loyalty has been a much debated topic of recent with no definitive answer. However customer loyalty could be seen as a continuity level of a customer related to a product that involves the relationship between an individual’s relative attitude and repeat patronage (Dick and Basu, 1994) within this essay I aim to identify how the quality of merchandise effects customer loyalty and how customer loyalty can be maximise. However I also aim to identify how organisations can provide the best quality customer service whilst making sure customers receive the best possible service.
Gremler, D., & Brown, S. (1998). The loyalty ripple effect: appreciating the full value of customers. International Journal of Service Industry Management, 10(3), 271-291.
Customer loyalty is a behavioural state, which reflects value, confidence and commitment between the supplier-customer relationships (Buttler, 2002). Hence, developing a strategy that would retain and boost loyalty from customer has become the objective of most companies nowadays (Duffy, 2003). Many see it as primarily an attitude-based phenomenon; therefore, offering customer relationship management initiatives such as customer loyalty programs can be significantly influenced by it (Uncles, 2003).
According to Lovelock (2011), customer loyalty was defined as consumer's “willingness to continue patronizing a business over a long term, purchasing and using its goods and services on a repeated and preferably exclusive basis, and voluntarily recommending the firm's products to friends and associates” (Lee et al., 2011, pp. 3- 4). In other words, it represents irrational behavior as a result of “a deeply held commitment to repatronize a preferred product/ service consistently (Oliver, 1997, p. 392).
A customer relationship management is a process that acquire, keeps and grows customer through delivering superior customer value and satisfaction.(nigel pericy) one of the concepts used is the loyalty program, the unlimited goal of the program is to increase profit revenue and market share(Stephan a). Moreover the use of loyalty program has three main advantages for customer orientation approach. The most significant one is to enable firm to build long term relationship with customer, in order to obtain a lifelong demand for a specific product produce by firm. The second advantage is a side effect caused by the first , where satisfied loyalty program member advertise to other people through the word of mouth. Hence this could increase the number of customers joining program as well a reduction and cost of firm to advertise therefore it slightly achieves its three main ultimate goals. And the final significant advantage it is that it provides firm with a database which enable them to predict future need to maintain market share and compete with other firms. Also this would reduce cost of market research, which is generally hard to obtain. For example data on customer purchases. Moreover firm that have use this concept and have a positive effect are TESCO, Starbuck and etc… However firm must maintain quality of good and service in order to maintain customer satisfaction which can lead to
People in the field have used both attitudinal and behavioral measures to define and assess customer loyalty (Zeithaml, 2000). Loyalty, from an attitudinal stand point, implies a specific desire to continue a relationship with supplier and provider (Reza and Rehman, 2012). This means that a customer is loyal to a brand or firm if they have a positive and preferential attitude towards it. Whereas behavioral loyalty is when a customer repeatedly buys from the same company, (Reza and Rehman, 2012) thus the customer is faithful to the company. Oliver (1997) defined customer loyalty as “a deeply held commitment to re-buy or re-patronize a preferred product/service consistently in the future, thereby causing repetitive same-brand purchasing, despite situational influences and marketing efforts having the potential to cause switching behavior. According to Ahmed and Moosavi (2013) “brand loyalty is the customer’s willingness to stay with a brand when competitors come knocking with offers that would be considered equally attractive had not the consumer and brand shared a history.”Rahman, et al., (2010) and Deng, Lu, Wei, Zhang (2010), expressed that same notion. Furthermore, Reza and Rehman (2012) note that customer loyalty represents the repeat purchase and referring the company to other customers. They also stated that customer loyalty is a figure that may be measured directly by measuring the actual repeated sales to customers. Additionally, due to intense competition in the market place, businesses have increased efforts to implement the customer retention strategy in order to maximize the lifetime value of customers (Boshoff and du Plessis, 2009).It is important to note that Cheng et al. (2011) proposed that it is cost-effective to maintain existing customers than obtaining new ones. To this the authors proceeded to state that the cost of
According to (Brandt, 1997) companies occasionally fails to create a relationship between measuring satisfaction factors with loyalty, which then creates a challenge to maintain the adequate level of satisfaction level being about to provide to their customers cited in (Wilson, 2002). Another author mentions that even attaining a linkage of relationship in enabling the customer to feel satisfied, it does not always result to consumer being loyal to a particular brand as there could be external factors involved that may affect the choice of the consumer. For example, in a survey which was related to satisfaction and loyalty which a scholar experimented, a sample of 267 business participants took part in, some results
There are many description and theory of customer loyalty. We should research and compare which theory is suitable for our business.
The customer retention are important things in order to maintain customer keep in touch with the retailer. Thus, the retailer need to have a proper loyalty program plan to make sure the objective can be achieved. Unfortunetly, some of loyalty program can lead to the problem for customer and it will reflect to the retailer itself. The problem that may occur within loyalty progam can give an impact to retailer and the customer loose their intention to repeat their purchasing process.
Performance in customer satisfaction is a significant factor in long-term success of the company. The key performance variables are repeat orders and the rate of customer acquisition. If you have satisfied customers, you retain those you have and get new ones at a rapid rate as it gives out positive word-of-mouth. Your evaluation of performance in customer satisfaction highlights potential problems for overall performance of the organization. Other factors that are related to customer service which increase level of performance measure of company are the reliability, production quality and quantity, and internal indicators such as employees training, market performance, customer retention and financial factors which regards the cost of
Francis (2002) reports an investigation that customer retention is progressively being seen recently as an important managerial issue and a key objective of relationship marketing, especially in the context of saturated market such as Telecommunication marketplace or lower growth of the number of new customers. It has also been acknowledged that retaining customer is less cost than to acquire new customers.
Furthermore, it is showing that the outstanding satisfaction becomes the most significant factors of customer’s loyalty by the scientists. (Picón, Castro and Roldán, 2014) Therefore, develop potential customers in to loyal customer can increase company’s profitability in both enhance revenues and reduce the cost. That is, it creates the influence in lower the sensitivity of customer-price, and also shortens the costs of customer’s services with service delivery. (Reicheld and Sasser,
The customer loyalty is considered as prime determinant of long-term financial performance of firms. Three conceptualizations of customer loyalty have been identified in literature: behavioral loyalty, attitudinal loyalty, and composite measure of loyalty (Uncles et al., 2003b).
John, J. (2011). An analysis on the customer loyalty in telecom sector: Special reference to Bharath Sanchar Nigam limited, India. African Journal of Marketing Management , 3 (1), 1-5.