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Theories on customer loyalty
The importance of quality customer service
Customer loyalty and relationships
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Recommended: Theories on customer loyalty
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)
Zeithaml, Valarie A, Berry, Leonard L, & Parasuraman, A. (1996). The behavioral consequences of service quality. Journal of Marketing, 60(2), 31. Retrieved April 1, 2011, from ABI/INFORM Global. (Document ID: 9401886).
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...
Williams, P. & Naumann, E. 2011, "Customer satisfaction and business performance: a firm-level analysis", The Journal of Services Marketing, vol. 25, no. 1, pp. 20-32.
...titudinal measures have an gain over behavioral measures (e.g. repeat patronage) in that they can deliver greater understanding of the factors associated with the development of loyalty ( Riley et al., 2001). (Rundle-Thiele and Bennett 2001) also argued that attitudinal loyalty measures would be valuable in service markets, since attitudinal measures can identify a customer’s favorable attitude towards a company in the service context. (Dick and Basu 1994) proposed that customer preference is essential to a loyalty conceptualization. Their view is supported by Butcher et al. (2001) indicating that loyalty conceptualization is customer first choice for the service ahead of competition. Therefore, the present study defined loyalty as a customer’s favorable attitude of stable psychological attachment, resulting in preference, towards the provider based on experience.
Many scholars believe that customer satisfaction has a crucial role in the success of a business, and is pivotal in increasing the overall profitability of the business (Kotier, 1991). Customer value is gained through the experience they receive from the goods or purchases they have obtained from a certain business. Customer value has various definitions and concepts, Holbrook (1999) stated that it is a kind of “interactive, mutual, and preferred experience”; but simply said, “the term customer value has many meanings.”
Repeat customers can be a company's most profitable customers. One possible objective of a sales team is to increase the number of sales made to existing customers compared to first-time buyers. Customer-relationship management or CRM strategies can help to achieve this objective, strengthening relationships with customers and turning repeat customers into champions for the brand.
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).
It is argued by some researchers that CRM can be seen as the organizational implementation of a relationship management philosophy (Ryals and Knox, 2001, Ryals and Payne, 2001). Through delivering more responsive and customized services to customers, CRM increases customer satisfaction and this, in turn, improves customer loyalty. The importance of relationship management is increasingly being recognized. Kotler (1992) wrote that companies must move from short-term transaction-oriented goals to long-term relationship-building
Variables in this article are: Customer satisfaction, Customer loyalty, Service quality, Price , corporate image and customer service. Customer satisfaction, service quality ,price ,corporate image and customer service are the independent variables whereas Customer loyalty is considered as dependent variable. Aggregately , 6 variables are considered for analysis, out of which 4 are independent and one is dependent. (Ali, Ali, Rehman, Yilmaz, Safwan, & Afzal, 2010).
Customer is a King, it is true in real sense for the Business success in today’s competitive markets as it requires a high understanding and respect of the customer. Customers are demanding, have more money to spend and have a wide collection of goods and services to choose from. To satisfy the customers, retailers must be able to listen to their feedback and improve services and goods to keep of clients. Customer satisfaction gives an indication of how much successfully the organization is meeting the demands of customers. All activities of the retail chain stores are directed towards customer satisfaction which leads to customer retention--a pivotal factor for business growth. The principle agenda of this research paper is to illustrate the importance of customer satisfaction in the retail industry. The retail industry being the highly competitive field, being able
Customer loyalty is about the consumer’s believing in your organization and trusting your product. Consumer loyalty is powerful against competitors, where despite the competitor’s presence, an organization is able to retain its customers. It is highly valued by organizations. From a study of (Abdullah et al, 2012), it is seen that loyal customers tend to have a positive opinion and behavior towards the organization.
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
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.
A further definition tackled the customer loyalty by Jones and Sasser, (1995) cited by Angelos (2008) as: "a feeling of attachment to or heart for a company’s folks, products & services". Additionally, Baker – Prewitt (2000), customer loyalty is "is the ultimate objective of customer satisfaction ". Accordingly, mobile service providers are trying to gain competitive advantage in order to strength the customer loyalty which become a key issue to them. Nowadays , companies tries by all means to increase the customer satisfaction due to the fierce competition in the marketplace and raise the perceived service quality in a way to gain customer loyalty in
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).