Relationship Between Customer Loyalty And Marketing Strategy

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.

Many marketers agree that by reducing customer’s to competitors defection by only 5 per cent, companies can improve profits by anywhere from 25 per cent to 95 per cent. There is no question this will be a great advantage and could benefit any retailer. It is for this very reason why consumer’s relationship marketing and using tools such as loyalty scheme is

Customer loyalty is much harder to obtain that customer service satisfaction. The most important first step is to satisfy the customer by meeting their expectations. Customers only give a company one chance and if they aren’t satisfied they will not do business with that company again, as well as tell others of their experience. The next step would be to exceed the customer’s expectations. If a business goes above and beyond to assist the customer they begin to build loyalty. The next step is to truly surprise the customer. In order to dominate the marketplace the company must find a way to make them selves stand out with their product or service, accompanied with phenomenal customer service. Once this has been done customer satisfaction and loyalty will be gained. “Acquiring a new customer can cost four or five times more than keeping a current customer” (Bestmark, 2013). So it’s essential to keep the current customer’s happy and coming back for more.

Hallowell, R. (1996). The relationships of customer satisfaction, customer loyalty, and profitability: an empirical study. International journal of service industry management, 7 (4), p. 27-42.

It is imperative to satisfy customers and give them an amazing experience at the company. While it cost less to sell to existing customers and companies can increase profit by selling to the same customers; if customers are satisfied, there is more chance they will come back for more services or products. Satisfied customers are a free marketing for the company. However, it is the opposite if customers are dissatisfied. Dissatisfied customer will tell 8 to 10 people about his or her experience (O’Brien, A & Marakas, G. 2004). If by any reason, representatives see that the customer is not satisfy, they should act fast and fix the problem. Furthermore, there is more chance for sale representatives to sell to an existing customer that to a new customer. A good strategy for customer retention is to reward good customers. Companies can easily do

Similarly, Molinari, Abratt, and Dion (2008) assert that there is a direct and strong link between customer satisfaction and customer loyalty behavior. If the customers enjoy the product or service, they will not be bothered to become loyal to the company. In other words, high levels of satisfaction commonly occur when the customer is delighted or happy with either the products or services provided by a business supplier. As Caceres and Paparoidamis (2005) state, customer satisfaction levels are determined and influenced by many elements. For example, it is commonly admitted that the customers will naturally repeatedly return to the company when things are done right, or in other words, business service companies successfully meet the customer’s expectation (Gil-Saura, et. al., 2009). Furthermore, increases in satisfaction could result to increase customer loyalty. A business enterprise, which could address the elements moderating the level of satisfaction of customers, probably would reach the higher level of loyalty. In other words, customer satisfaction is likely to improve customer loyalty in general.

Marketing is the word we use to explain how we encourage people to buy our products. If it’s going to work in a big way, there needs to be a strategy or big idea to whet peoples’ appetites for what we’re selling. When we’re marketing, we begin with a plan; objectives, strategy and tactics (how we implement strategy). It is a process that helps companies to build relationships with prospects and customers and creates unique value for them when it is done right.

Marketing strategy includes all basic and long-term activities in the field of marketing that deal with the analysis of the strategic initial situation of a company and the formulation, evaluation and selection of market-oriented strategies and therefore contribute to the goals of the company and its marketing objectives.

This is one of the reasons why there has been a gradual shift towards a relationship-approach. Harker et al. (2006a) quoted the American Marketing Association, to have followed the same approach when it gave the definition of marketing as a business functions and a set of procedure to establish, communicate and provide value to its customers and to manage customers’ relationships in such a way that it is mutually beneficial to all stakeholders. It is now clear however, the shift towards a longer-lasting and more profitable marketing approach from a product-based marketing approach has a better chance of sustainability over longer periods as it is more business-orientated. Relationship Marketing Relationship marketing has been seen during the last decade of the 20th century, as the prevailing thought in developing a marketing scheme both in industrial marketing and consumer marketing (Tseng, 2007) in (Kibeh, 2013). The initial appearance of the phrase ‘relationship marketing’ in the marketing literature was in late 1970s and early 1980s through the research of Dwyer et all (1987) and Berry (1983ab) among

The key gaol of marketing is to develop deep, enduring relationshipsmwith people and organizations that directly or indirectly affect the success of the firm’s marketing activities.

Marketing strategy is the goal of the increasing sales and achieving the sustainable competitive advantages. Marketing strategy includes all the basic and long-term activities in the field of the marketing that deal with the analysis of the strategic initial situation of the company and the formulation, evaluation and selection of the market-oriented strategies and therefore it contributes to the goals of the company and its marketing objectives.

Customer satisfaction and customer retention are important linkages to market-based strategy and to profitability. The ultimate decision of any marketing strategy should be to attract, satisfy, and retain target customers. The customer as a critical component in the profitability equation is completely over-looked in financial analysis and annual reports. It is an asset that businesses have yet to quantify in their accounting systems.

Customer satisfaction and customer loyalty are the basic and main success factors in the market

In the initial part of study, it has elaborate meaning of loyalty. Now, this section has presented literature on effectiveness of loyalty on customer retention. Loyalty program often considered as value sharing or enhancement instrument. Sabol, 2002) addressed that value enhancement function is important because of ability to provide superior value to customer relationship and retention. Loyalty program provide value to consumer in two stages. (Bolton, 2000), has explained stages in brief that in the first stage program points are issued to customer and the second stage when customer redeemed those points. Though these points value don’t have any practical value unless customer redeemed them. However, according to the study by (Machanda, 2004) showed that it has important psychological meaning to customer. Points accumulation can gives customer feelings of benefits and these benefits are able to give customer positive value perception. It is because customer can redeemed those values later for rewards. At redemption stage, customer receives both economic and psychological value. Thus it enhances appreciation and recognition of

The article Listening ain’t enough stresses upon the fact that customer loyalty cards are used to generate information about the customers in order to serve them better by developing products and services according to them. But these alone are not enough for gaining advantage over the competitors. Trained staff with a heart to serve the customers with customer-centric approach could help in gaining the advantage.