Key Theories Of Customer Loyalty

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

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

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