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Factors influencing customer loyalty
Factors influencing customer loyalty
Factors influencing customer loyalty
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Introduction
Customer loyalty according to Loyalty Research Centre (2014) “can be defined as customers continuing to believe that one organisation’s product/service offer remains the best option. It meets their value purchasing decision”. Consumer Loyalty (2014) breaks this definition down to its simplest form by stating, “Consumer loyalty is all about attracting the right customers, getting them to buy, buy often, buy higher quantities and bring even more customers”. They go on to list five ways in which loyalty can be built (see figure 1). However this paper looks to exemplify the benefits that learning theory presents when improving customer loyalty with particular emphasis on behavioural learning and cognitive learning.
Figure 1 - Building Loyalty – Consumer Loyalty (2014)
Learning Theory
There are several theories that aim to provide an understanding of the process that is taken when learning. Solomon, Bamossy, Askegarard and Hogg (2013) provide a definition of learning which reads, “Learning refers to a relatively permanent change in behaviour which comes with experience”. This paper therefore explores the two most commonly used learning theories that have been built around this framework.
Behavioural Learning
Behavioural Learning can be classified as an umbrella of theories that “assume that learning takes place as the result of responses to external events” (Solomon, Bamossy, Askegarard and Hogg, 2013). A definition provided by Owen (2014) reads “a process in which experience with the environment leads to a relatively permanent change in behaviour or the potential for a change in behaviour” forms an understanding of this umbrella term that has been built through the work of “Pavlov, Thorndike and B.F.Skinner” (Bailey, 20...
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Solomon, M., Bamossy, G., Askegaard, S. and Hogg, M. (2013). Consumer behaviour. 5th ed. Pearson Education, Inc., p.261.
Solomon, M., Bamossy, G., Askegaard, S. and Hogg, M. (2013). Consumer behaviour. 5th ed. Pearson, pp.395-434.
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Miller, R. K., & Washington, K. (2014). PART I: THE AMERICAN CONSUMER: 7. CONSUMER DEBT. Consumer Behavior, 53-56.
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Behaviourism is a theory of learning which suggests that all behaviours are obtained as a result of conditioning...
Solomon, M. R. (2012). Consumer behavior: Buying, having, and being (10th ed.). Upper Saddle River, N.J: Prentice Hall.
Psychologists have preformed many studies and proposed many theories regarding learning. Learning can be defined as a relatively permanent change in behavior that is due to past experience.
Consumer behavior is the ways that consumers exhibit in searching for, purchasing, using, evaluating, and disposing of, products and services. The study of consumer behavior as a separate marketing discipline all started when marketers realized that consumers did not always react as marketing theory suggested they would (Ekström, 2003). Many consumers rebel at using the identical products that everyone else used, instead they prefer differentiated products that they feel reflect their own special needs, personality and lifestyles.
Solomon, M. R. (2009) Consumer Behaviour: Buying, Having and Being, 8th edition, New Jersey: Pearson Education.
Ninety percent of Canadians are enrolled in at least one loyalty program. Market research has shown that loyalty programs are growing to be very popular in today’s market. A loyalty program is a program offered by a company to customers, who make frequent purchases. Loyalty programs are of benefit to both the consumers and the business. The consumers benefit by receiving coupons, special access to sales and new products whereas the company benefits by gaining an abundance of knowledge about the consumers, through their purchasing habits. Loyalty programs have proven to be very successful for several companies such as Target, Starbucks, and Shoppers Drug Mart. The senior management in sales and marketing believe that initiating a loyalty program
According to Moreno (2010) , the term “learning”, can be defined as a “relatively permanent change in our thoughts, feelings, or behavior that results from experience “ (p.150)
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B. F. Skinner, the most well-known American Psychologist who was the top exponent of the school of psychology that was known as behaviorism, preserved the impression that learning is an end result of change in evident behavior. The changes in behavior are determined by the way individuals reply to stimuli (events) in the environment. B.F. Skinner defined this phenomenon as operant conditioning. Operant conditioning means changing of behavior by the use of reinforcement which is given after the desired response (McLeod, 2007). This
Therefore, according to the above a general process learning theory is sustainable even in the presence of biological constraints as behaviour can be reinforced and manipulated in most cases to acquire a desired behaviour.
Behaviorism is the point of view where learning and behavior are described and explained in terms of stimulus-response relationships. Behaviorists agree that an individual’s behaviors is a result of their interaction with the environment. Feedback, praise and rewards are all ways people can respond to becoming conditioned. The focus is on observable events instead of events that happen in one’s head. The belief that learning has not happened unless there is an observable change in behavior. “The earliest and most Ardent of behaviourists was Watson (1931; Medcof and Roth, 1991; Hill 1997). His fundamental conclusion from many experimental observations of animal and childhood learning was that stimulus-response (S-R) connections are more likely to be established the more frequently or recently an S-R bond occurs. A child solving a number problem might have to make many unsuccessful trials before arriving at the correct solution” (Childs, 2004).