Customer Loyalty: Chains or Gates?

Loyalty programs include frequent flier miles or points systems associated with credit card offers that can be used only with the original company, creating a perceived loss or cost when switching to a competitor. Most programs are able to get consumers to spend more money just to get to free or bonus item.

Thus, companies seek to strengthen customer loyalty. Brand loyalty is considered to tilt the consumer to purchase the package / product specific brand (Jacoby and Chestnut, 1978). Later, Oliver (1997) defined loyalty as "a deeply held commitment to REBUY or repatronize preferred product / service consistently in the future, thereby causing repetitive same-brand or same brand set purchasing, despite situational influences and marketing activities, which would result in causing switching behavior "(p. 34). This conceptual definition covers two different aspects of loyalty: the behavioral. This is consistent with an integrated conceptual framework proposed by Dick and Basu (1994), that customer loyalty is regarded as a "power relationship between the relative position of the individual and repeat

Developing a loyalty program is challenging. You team must understand what will keep your current customers interested and what will spark them to purchase multiple times.

Market players generally have a wide variety of potential customers, which considerably weakens buyer power. Although consumers in this industry may be loyal to particular brands or chains, loyalty to retailer brands is arguably less important than competitive pricing. Many supermarkets run rewards programs for frequent shoppers, such as Tesco’s ‘Clubcard’, and these schemes can help companies retain customers and reduce buyer power.

Over the decades there were tremendous amount of challenges for every business. Customers have more knowledge, they have more options, and they have higher expectations. Customers are more informed with the humungous development in technology. Having more options in front of them, expectations has surpassed in retail industry. Loyalty is a customer having faith that your organization’s product or services offered is the best for them. It is the process of tapping the buying pattern of customers in a store based on their preferences. Customer loyalty is significant because it is economical to retain the old customers rather than acquiring new customers. So, organizations employ loyalty programs which reward customers for their repeat business.

Costco has gained significant success through building customer loyalty (Timm, 2014). Costco spends almost nothing on traditional advertising and marketing yet the company has grown to almost 60 million members. The company has grown by word of mouth through their customers who tell other people. The company offers their employees a generous compensation package which results in low turnover and long tenure reducing hiring and training costs and boosting productivity. Costco only offers their customers items that can provide an outstanding value resulting in about 4000 stock keeping units (SKUs). Whereas, other retailers keep anywhere from 30,000 to 150,000 SKUs. Over the past decade, Costco's earnings have grown 12 to 17 percent each year despite a difficult economic environment; their total sales exceed $76 billion a year.

Every company wants to make money and bring in customers, but what about making loyal customers out of them so they continue to come back? How do you even bring in potential new customers and turn them into loyal customers to begin with? The lifetime value of a customer is a predicted value of net profit credited to the total future relationship of a customer. We want to know the financial value of each customer so that we know how much to spend in marketing when looking for new customers and the potential of profits back from the money in advertising spent. The grocery store chain must start looking at customers and how to make them happy and loyal in the long run, as opposed to how to boost sales right now. From the Marketing Management book, a well-known rule states that 80 percent or more of a firm’s profits come from the top 20 percent of its customers. Thus, we want to focus on brining in new customers with successful marketing and turning them into loyal returning customers.

7. Consumer loyalty needs to be increased: - The main recommendation is to increase the good relationship with the consumer at all. The reason is that if there is a good relationship between the organisation and the consumer then the benefit will be to the organisation as good relationship sometimes helps to reduce expense on the other factors like huge expense that is done on the advertising of the brand of the organisation. In Asian markets, areas such as relationship building and a ‘benefit-the-country’ attitude are sometimes more important than investing enormous amounts on advertising (LaForet and Chen, 2012).

Healthcare organizations want to leave a positive influence with their patients. Leaving a positive influence on the patients will make them want to return to your health care facility in the future and utilize your services. A healthcare organization needs to build loyalty within their patients. “Reflecting a broader trend in business metrics, healthcare organizations are increasingly building customer loyalty (in their case, patient loyalty measures) into their existing satisfaction surveys (Blizzard, 2002).” A customers’/patients’ loyalty is very essential when it comes down to describing a health care organization’s outcomes for their financial means. Actually, health care organizations that are not observant to loyalty could possibly endanger

According Baker M (2000), loyalty schemes is the “Overt attempt of exchanging partnership to build a long term relationship association, characterised by purposeful co-operation and mutual dependence on the development of social, as well as structural bonds with consumer”.

In this article, Brooks discusses how online businesses as well as regular businesses differ in benefitting from loyalty reward programs offered to customers. With the new age of technology becoming more and more prevalent, customers are less likely to actually travel to stores to purchase goods from businesses. The ones who do typically go to the places that

Even though the theoretical model suggested that winning loyalty is a long-term process and might be affected by some internal and external factors, in the case of Tesco, it was very much a positive impact helping to enhance the buying experience of customers, along with capturing high marketing share. Das (2009) stated that there are many factors that define the impact of loyalty schemes. Some customers are price conscious, meaning loyalty points do not matter to them. On the other hand,

Some of the ways that businesses can build loyalty would be by offering loyalty programs, Interacting with customers, surveys, creating institutional ties, and personalized marketing. Another way to build loyalty is to treat your employees so well that they treat your customers well. If you have happy employees they will treat your customers happy. “The link between satisfaction and loyalty however is not proportional” (Kotler, Keller, 2009, p71), so businesses must

In marketing terms, a loyalty card is a plastic or paper card, which is quite similar to the other financial cards in visibility and that, identifies the card holder as a member in a loyalty program. Loyalty Cards typically have a barcode or magnetic stripe that can be easily scanned when it is swiped at the particular stores. Loyalty cards can be in the form of small key ring cards which are often used for convenience in carrying and ease of access for the consumers. Loyalty programs are predominantly run by retailers and the service industry. Companies typically have several goals when launching loyalty programs, all of which are focused on generating greater profits from the program’s

The term “Brand Loyalty” also called as “Customer Loyalty” has been in the business industry since a very long time as a model to be used in conducting business. But it wasn’t until the mid to late 1900’s that the term was actually given its due importance by making it a vital part of advertising and marketing. The concept of marketing evolved substantially from being focused on sales of a product to having Customer satisfaction to be its focal point. Studies further revealed that there was a positive correlation between customer satisfaction and Brand Loyalty.