changingminds.org

How we change what others think, feel, believe and do

| Menu | Quick | Books | Share | Search | Settings |

Customer Loyalty

 

DisciplinesMarketing > Understanding Customers > Customer Loyalty

Description | Satisfaction | Bonding | Repurchase | Involvement | Advocacy | Forgiveness | Discussion | See also

 

Description

Loyal customers are those who have formed an emotional bond with the company, often as a result of receiving excellent products and services.

Loyal customers behave differently to normal customers in that they:

  • Will repurchase without considering competing offerings.
  • May become actively involved in discussions about the offering, giving time to help improve it.
  • Recommend the offering to others.
  • May be willing to actively advocate the offering, for example at conferences or in advertising.
  • Will forgive minor transgressions (eg. service errors) without loss of loyalty.

Satisfaction

When a customer has a good experience with the company's products and services they become satisfied. When there experience failures or other issues, they become dissatisfied.

Satisfaction is typically measured on a 5-point Likert scale, based on rating by customers in a standard questionnaire. This may break down the subject into specific experiences, but often has an 'overall satisfaction' single scale at the end of the questionnaire which is used as an overall 'satisfaction' rating. Loyal customers will give a top score in this category.

Very high satisfaction is necessary but not sufficient for the emotional bonds of loyalty. This typically happens with low-involvement and commodity products such as paper-clips.

Bonding

When customers like a company's products, services, people and overall brand, they attach their identities to that of the company such that they feel a closer kinship with the company.

As a result of this bond, they are loathe to be disloyal as this would feel like a part of their selves were being ripped away.

Repurchase

An important positive action that loyal customers take is to come back to you for more. There are two styles of repurchase:

  • Buying more of the same or more supplies for a purchased product.
  • Buying different things, based on an assumption that one good offering means all offerings will be equally good.

Repurchase is useful in that it is a measurable, quantitative factor that can be correlated directly with profit. If repurchasing can be predicted then the future total value of the customer may be calculated, which allows for intelligent decision about how much to invest in sustaining the relationship with the customer.

Involvement

Customers can get involved with the product in a number of ways, including:

  • Offering dynamic feedback about their experience (perhaps in service calls).
  • Agreeing to provide information in a more structured way, such as through focus groups or questionnaires.
  • Joining interest groups to share information with others who used your offerings.

Customers who get involved may not be loyal, but it does indicate that the offering is important to them, which means they are candidates for loyalty (and also for loud complaint).

Involvement itself can be a significant step on the way to loyalty as, by the consistency principle, people need to explain how they behave to themselves and may conclude that their involvement is due to their real passion for the offering.

Advocacy

Advocacy is a step beyond involvement, and give a very clear message that the customer has significant feelings of loyalty. People who are not loyal are unlikely to stand up and publicly praise your offering.

Actions that indicate advocacy include:

  • Offering positive quotations that may be used in marketing copy.
  • Appearing live to help promote the offering, for example at conferences.
  • Working with your sales teams to help sell.

Note that advocacy should be done just because they like your offering. If you are paying them for it (other than basic expenses) then they may be more money motivated than truly loyal.

Advocacy can also be measured. The simplest measure of at least intent is to ask in a survey if they would consider advocacy. A better measure is what they actually do.

Forgiveness

When you fail in some way, for example with a faulty product or a poor service experience, loyal customers will assume this is a 'one off' and will likely forgive you, especially if the transgression is not serious.

Forgiveness has its limits and it is easy to take advantage of loyal customers by ignoring them or not offering them advantages (such as discounts)

Discussion

Customers are the lifeblood of any company and much effort is put into wooing them so they will buy the company's products and services.

It is sometimes forgotten that loyalty is a two-way process. If you want them to be loyal to you, then you have to be loyal to them, including ensuring they always have a good experience and moving quickly to resolve any issues they have.

A common way of measuring loyalty is that three conditions must be met:

  • A satisfaction rating of 5/5
  • Evidence of repurchase
  • Willingness to recommend product to others is stated

Where there is little involvement in a product then recommendation is unlikely, even if the person is satisfied and buys again. High involvement products, on the other hand, lead to high loyalty or deep dissatifaction.

See also

Bonding principle

Site Menu

| Home | Top | Quick Links | Settings |

Main sections: | Disciplines | Techniques | Principles | Explanations | Theories |

Other sections: | Blog! | Quotes | Guest articles | Analysis | Books | Help |

More pages: | Contact | Caveat | About | Students | Webmasters | Awards | Guestbook | Feedback | Sitemap | Changes |

Settings: | Computer layout | Mobile layout | Small font | Medium font | Large font | Translate |

 

You can buy books here

More Kindle books:

And the big
paperback book


Look inside

 

Please help and share:

 

Quick links

Disciplines

* Argument
* Brand management
* Change Management
* Coaching
* Communication
* Counseling
* Game Design
* Human Resources
* Job-finding
* Leadership
* Marketing
* Politics
* Propaganda
* Rhetoric
* Negotiation
* Psychoanalysis
* Sales
* Sociology
* Storytelling
* Teaching
* Warfare
* Workplace design

Techniques

* Assertiveness
* Body language
* Change techniques
* Closing techniques
* Conversation
* Confidence tricks
* Conversion
* Creative techniques
* General techniques
* Happiness
* Hypnotism
* Interrogation
* Language
* Listening
* Negotiation tactics
* Objection handling
* Propaganda
* Problem-solving
* Public speaking
* Questioning
* Using repetition
* Resisting persuasion
* Self-development
* Sequential requests
* Storytelling
* Stress Management
* Tipping
* Using humor
* Willpower

Principles

* Principles

Explanations

* Behaviors
* Beliefs
* Brain stuff
* Conditioning
* Coping Mechanisms
* Critical Theory
* Culture
* Decisions
* Emotions
* Evolution
* Gender
* Games
* Groups
* Habit
* Identity
* Learning
* Meaning
* Memory
* Motivation
* Models
* Needs
* Personality
* Power
* Preferences
* Research
* Relationships
* SIFT Model
* Social Research
* Stress
* Trust
* Values

Theories

* Alphabetic list
* Theory types

And

About
Guest Articles
Blog!
Books
Changes
Contact
Guestbook
Quotes
Students
Webmasters

 

| Home | Top | Menu | Quick Links |

© Changing Works 2002-2016
Massive Content — Maximum Speed