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Customer loyalty and relationships
Customer loyalty and relationships
Customer loyalty and relationships
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Task 1: Critically evaluate the key concepts/theories on the topic of the effectiveness of loyalty programmes on customer loyalty Definitions 1. Loyalty Reichheld (1996) descripts loyalty to a value-creation theory and he does not agree loyalty as the pure profit-theory, which brings together the company’s resources go to one unique goal: profit-creation. Reichheld’s loyalty is always focus customers. The basic aim of a company is the creation of value for the customer. Therefore, the business profit become is a consequence of value creation. can picture 2. Customer loyalty There are many description and theory of customer loyalty. We should research and compare which theory is suitable for our business. Let us list down what …show more content…
It’s subjective opinion or psychology of customers. Satisfaction is often confused with loyalty. The range of customer’s emotion is shown with surprise, contentment, happy, unhappy or relief. The entire gap between perceived quality and expected quality is influenced customer satisfaction. Customer loyalty is always is frequency buying action. The figure below shows the predominant linkage of this process. 2.4. Satisfaction-Loyalty link When organization always provide high-quality products and good services, customer will create their satisfaction and increased customer loyalty. we would be tempted to believe that is a simple, linear relation between satisfaction and loyalty. According the research of (Jones & Sasser Jr., 1995) , relation satisfaction and loyalty is different according to time and circumstances. Unless they are totally satisfied, there is always a chance you will see your customers be lured away (Jones & Sasser Jr., 1995). (see figure "The effect of satisfaction" below). 3. Loyalty model The key in this loyalty model is the creation of value for the …show more content…
2 . Loyalty employees Company strong growth enables firm to attract and retain the best employees. Staff gain the Pride , high salary pay and satisfaction during the service long-term employees are the treasure asset to the company. Younger employees get to know their long-term customers; learn to deliver more value to loyalty customers. Loyalty employees know how to reduce costs and improve quality in produce and service. They can enriches and increase the customer value proposition and bring out supper productivity. Through the re-education and training course, all of employee gain the powerful in productivity and knowledge. Loyalty customers gain the more cost advantage and benefit, this resist competitors very hard to match. Promoted cost bind to loyal customers to sustainable growing. Organization’s product, service and brand retain and attract the local and international investors. Loyal investors Loyal investors act as partnership; provide sustainable power of financial support, continuous development in new market, more benefit into the company, strong cash
Customer loyalty comes from the personal relationship that is developed between the customer and the business. One method used to understand the customer relationship is called customer relationship intensity and Life-cycle segmentation (UOP, 2007). This process includes classifying all the customer relationships into one of five groups.
Introduction. Customer loyalty is basically defined as a deep held commitment to re-buy or re-patronize a chosen product/service consistently in the future, thereby causing repetitive same-brand or same brand-set purchasing, despite situational influences and marketing efforts having the potential to cause switching behavior (Oliver, 1997). It is a main driver for customer retention, which, in its turn, represents a basic force that accumulates a customer base for the company. As the experience suggests, the presence of the customer base is a valuable asset, because a lot of statistical data and marketing researches have proved that it is harder and much more expensive to acquire a new customer rather than retain an existing one. In this aspect, any business without a focus on customer retention is left on market’s mercy: any market movements will affect the sales in a more intense manner. There is also a risk that your competitor may eventually satisfy the existing customer’s needs and take away a part of your market niche. Moreover, customer loyalty gives a sort of discretion to the company’s R&D policy and marketing strategy: you can try to introduce different features to your products, experiment with different types of ads, and no matter what the results would be, — the customers will stay stick to your production line. Of course, an organization does not have an absolute control over the loyalty of its customers, bec...
Net Promoter Score is becoming an increasingly popular tool used by many companies who try to assess customer loyalty. The Net Promoter Score is based from a model developed by Frederick Reichheld in the book, “The Ultimate Question” (Beyond 2). The system helps measure customer loyalty between an organization and a consumer. The Net Promoter score was designed on an 11-point scale from (0 to 10) and it separates the customers into promoters, passives and detractors (beyond 2). Promoters are people who score 9’s and 10’s on the Net Promoter Score scale. The passives are the people who are 7’s and 8’s on the Net Promoter Score scale. The detractors are the people that are from 0 to 6 on the promoter score scale. One of the main goals of the Net Promoter Score scale is to recognize what each of the companies customers are defined as and to try and convert the detractors and passives to Promoters. The promoters are people who feel their lives are being enriched by their relationship with the company. They are very loyal to the company and have multiple purchases with the company. They tell many different people about the company to try and influence others to shop or use the company. They offer good feedback on how to stay successful or even become more successful in the future. The passive customers are people who make few recommendations to others about the company. Bring little energy to the company and are likely to go to a competitor if they offer a great discount on a product. The detractors are customers who feel that their lives are not enriched by shopping or affiliating with that particular business (Freimark 21). The detractors become dissatisfied with the company or experiences they have had with the company. They ta...
1.1 Explain the value of customer service as a competitive tool Customer service is valued as a competitive tool by many organisations. It gives you the ability to gain customer loyalty while meeting the customer’s expectations. Staff will have the skills and knowledge that will provide a competitive edge. Most organisations are known for the quality of their customer service. This means that they are known for good customer service or poor customer service.
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...
However, other studies meanwhile have shown that customer satisfaction may not always be a reliable indicator for customer loyalty (Bowen and Chen 2001). Writers such as Faullant et al (2008) have advanced the thinking that corporate image have a partial mediating effect on the relationship customer satisfaction and loyalty. This would indicate somehow that there could be other variables that might be present to account for customer loyalty apart from customer satisfaction such as corporate image, service quality etc.
Loyalty is by no means dead. It remains one of the great engines of business success. (Reichheld, 1996, p.1)
Putra, I. (2013). The effects of quality and service value on customer loyalty. Interdisciplinary Journal of Contemporary Research in Business, 5(5), 488-504. Retrieved from http://journal-archieves35.webs.com/488-504.pdf
The more profitable firms are those that are able to maintain their most valued customers throughout time. To satisfy a customer means to make him faithful and customer satisfaction becomes the index that measures the ability of the firm to produce income for the future.
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).
Motivation of its employees to provide exceptional services to their customers by supporting their development, providing opportunities for personal growth and fairly compensating them for their successes and achievements.
To ensure that the Product or Service developed by the Company will ensure Satisfaction among the customers, the company needs to understand and implement the needs of its customers while developing products or services, allowing them to have a loyal customer database. Any company can only be successful in a business environment if they have loyal customer base that will continue to purchase from a particular brand as compared to purchasing products or services from competitors as long as it satisfies their requirements and
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.
There is a simple answer to this. In short words loyalty equals profitability. It is a general phenomenon that if you are loyal to somebody then he or she should be loyal to you. In the similar way when company wants customers to be loyal with them, then they have to do the same with its customers. Keeping this phenomenon in mind an organization maximizes its backward looking metrics like:
Customer retention has a positive relationship with the company’s profit as loyal passengers are less price sensitivity and they require less effort to communicate. Also, it is easier to obtain purchase from old customers compared to new customers in most cases (Shrestha, 2014). According to J.D. Power Report, (2015), airline companies that provide satisfactory services to gain customer loyalty will lead to improvement of return on investment, through the repurchasing of airline services.