Customer Loyalty: Meaning, Forms, Research, and Practical Uses

This report delves into the multifaceted concept of customer loyalty, beginning with its definition and significance in the business world. It explores various forms of loyalty, differentiating between attitudinal and behavioral loyalty, and provides examples to illustrate these concepts. The report then examines factors that influence customer loyalty, such as brand image, rewards programs, personal connections, and customer service quality. Furthermore, it highlights the importance of customer loyalty for business growth and competitive advantage. The main body of the report further analyzes ways in which marketers can utilize research evidence on customer loyalty in practice, referencing key theories and research findings from experts like Frederick Reichheld, Werner Reinartz, and Dowling and Mark Uncles. Finally, the report offers recommendations based on the insights gathered and concludes by emphasizing the critical role of customer loyalty in achieving sustained business success.

INDIVIDUAL ASSESSMENT

Table of Contents
INTRODUCTION.....................................................................................................................................2
MAIN BODY.............................................................................................................................................2
Discussing meaning and explanation of customer loyalty.......................................................................2
Different forms of consumer loyalty........................................................................................................5
Ways or methods through which marketers can use research evidence on customer loyalty in practice. 6
RECOMMENDATION.............................................................................................................................7
CONCLUSION..........................................................................................................................................8
REFERENCES..........................................................................................................................................9

INTRODUCTION
Individual assessment is described as procedure of collection appropriate information
about specific topic or thing that has been used to conduct particular activity related to an object.
The current assignment will be based on specific subject and that is customer loyalty. It will
explain meaning of this topic and varied forms of consumer loyalty. Furthermore, lastly the study
will justify how can marketers utilize research evidence in the context of buyer loyalty in
practice.
MAIN BODY
Discussing meaning and explanation of customer loyalty
Definition of customer loyalty-
Consumer loyalty is defined as behavioral tendency where a buyer take favor of their
favorite brand’s items or services over other company’s resources that are operating in same
sector from longer time period (Ghorbani and Emadi, 2020). It indicates the degree to which
buyer is devoted to a firm’s products. It also refers to as a measure of customer’s likeliness to do
repeat venture with an organization, which considered as an outcome of consumer’s satisfaction,
and entire value of services or goods that a shopper obtain from their favorite brand. It is one of
those key elements that help many companies to retain their potential buyers with purchase of
products and other forms of resources, which in return boost brand image and increase
profitability. In the world of business, there are varied kinds of ways, approaches, techniques and
concepts available that has been utilized by many organizations to enhance customer loyalty and
make their consumer a loyal buyer, which is quite important for current and in future progress of
any firm.
For example, majority of brands adopt discounts offer as valuable method that related to
this subject, which made it able to retain profitable shoppers forever and engage them with
purchase of quality goods.
Explanation in regard to customer loyalty-
Forces that influence consumer loyalty-
Brand image or reputation in market-

Brand image falls under list of those factors that has influenced customer loyalty in
positive manner, as it helps to enhance each buyer commitment towards particular company (7
Factors That Affect Customer Loyalty, 2021). When the market reputation or image of a
company is powerful, it may influence its potential customer to become loyal one in term of
repeating purchase of their items and conducting word of mouth promotion activity, which is
quite essential for a firm as it help to increase productivity and profits margin.
Rewards-
This factor also influences consumer loyalty, when an organization take initiative to
retain their potential buyers forever by adopting and using methods of customer loyalty (Mgiba
and Madela, 2020). In recent time, individual person commits with those companies that offer
rewards to them in term of discounts and more exciting offers. It gives them reason to retain with
purchase of their preferable brand products, which is valuable for a company and customers as
well, as it let a buyer to be loyal for every. For example, TESCO as a leading retailer in the
world of retail offer club card scheme to make people their loyal consumer and to increase
loyalty of existing buyers.
Figure 1: TESCO Club Card Scheme

(Source: Tesco hints at big plans for Clubcard, 2021)
Personal connections-
It also included in category of above factors, because personal relation or connection
between target segment and management also influence customer loyalty (Kim and Kim, 2020).
For example, when consumer service department treat their potential buyer in effective and
influencing manner, they may contribute to make each of them a loyal one. It affects in positive
manner which in return enhance customer base, on the other hand ineffective personal
relationship impact negatively, where sales person may not interact with group of customer
properly and treat them well.
Extent of customer service-
Service quality play vital role in the context of customer loyalty. For example, high
extent buyer service enhance loyalty among each shopper, which drive their attention towards
repetition purchase of goods (Othman and et.al., 2020). Appropriate resolution of buyer’s
problems makes a company able to keep their potential shopper for longer, who may obtain
disappointing experience from other brand. When a firm offer low extent services to people in
term of consuming time to solve their queries, it may lead to losses profitable shoppers.
Convenient shopping experience-
Majority of customers be a loyal with their favorite companies because they provide
convenient shopping experience to each of them, which turns into increased customer base and
generated revenue (Fan, Kou and Liu, 2020). A company may do so in term of making their
stock full of those goods that customers prefer to buy. Furthermore, organizations may provide
convenient shopping experience to individual person by making shopping area wider and clear.
Their workers may have divided each section and tag them according to products category,
which make shopping easier for everyone.
Importance of consumer loyalty in ventures-
Customer loyalty is highly important for better growth and unpredicted success of
businesses (Wijaya, Suyono and Santoso, 2020). Loyal buyers may associate favorable
experience with a company therefore their likelihood to make continuous purchases with that

brand. It gives new high to an organization, which allow it to gain competitive advantages in
market where it has operated since from so long. It can be said that consumer loyalty affects a
venture in positive manner, as it drives the sales of business even better than rivals. It is essential
because loyal customer help to promote venture, its products and service quality in market
whether it is domestic level or international. Furthermore, along with above reasons, it can be
analyzed that consumer loyalty is also significant for ventures because it produces high
conversion rates and help in effective planning for success.
Different forms of consumer loyalty
Customer loyalty is distinguishing into two categories such as attitudinal and behavioral
loyalty, which is quite different from each other.
Behavioral loyalty-
This type of consumer loyalty consists in meagre reputation of a buying behavior,
without any psychological or mental considerations explaining such nature and lack clear
preference for purchased item or service (Lubbe and Duh, 2020). Behavioral loyalty occurs when
bulk of customers continues to buy their favorite goods from their favorable brand, which
contribute to increase sales, profitability, productivity and revenue. There are varied types of
methods are accessible in the business world that many firm used to make their potential buyers
to become a loyal customer. For instance, TESCO, and ASDA are two major players that are
operating in retail sector and adopting low pricing strategy to retain profitable shoppers from
longer period of time and also to drive the attention of other brands customers towards purchase
of their goods which are highly satisfied in term of quality and quantity. By adopting this
method, organizations may give reason to each buyer in the context of repurchasing from their
outlets and convince other to do, which is worth it for them. Behavioral brand loyalty has usually
considered as loyalty as a notion of shoppers being highly loyal to a particular brand, because it
offers valuable services and quality products, according to needs and expectations of people.
TESCO is the most popular supermarket in the United Kingdom, because it has adopted
varied techniques and methods in regard to customer loyalty. Along with low pricing strategy,
firm offer club carb benefits, which in return maximize loyalty and trust among shoppers, which
is really important for any company to increase.

Attitudinal loyalty-
This kind of loyalty occurs when consumers select and retain with brand because of its
positive preference. It displayed by shoppers when they continually purchase companies’ goods,
because they have trust upon it (Khajeheian and Ebrahimi, 2020). It drives the attention of
attention of buyers towards building strong relationship with their favorite organizations, whom
which they trust the most and considered as top brand over other. In today’s competitive
business environment, companies like fashion retailer may develop attitudinal loyalty by offering
those products that are in trends now and customer like the most as well as seek to buy from long
time. For instance, M&S is one of those brands that has offered trendy goods, according to
expectations and needs of its target segment, which made it able to have customers who are loyal
for it and promote its services and other things in market, after getting appropriate satisfaction. It
can be said that this kind of loyalty among buyers may develop, when M&S and other brands
take initiative to make a variation in each item, which added value and make it worth it in term
of buy.
This type consumer loyalty concept may lead buyers to buy any item from their trustable
brand without focusing on other factors such as high price tag, they trust on a company because
people know that they obtain better quality and quantity no matter what price is. It allows firms
to reach at international level as they had a strong and influencing customer base.
Ways or methods through which marketers can use research evidence on customer loyalty in
practice
Research evidence is described as systematic observation that is used to establish facts
and to reach a final outcome. Marketers can use these type of observations in term of considering
preposition, which is a key element of Frederick Reichheld Loyalty effect theory
(Ramazanian, Yakideh and Tafaghodi, 2020). He believes that each organization must
concentrate on establishing a loyal consumer base by building influencing bond with front line
workers.
According to this concept, customer loyalty brings many advantages for a company as it
helps to drive financial success of brand more than its rivals. The author describes varied types
of methods in the context of companies, which they may use to build loyal customer base and
maintain it for longer period of time. For instance, Reichheld believe that organizations by

keeping their profitable buyers and growing their relation with them, can develop loyal consumer
base, which is quite beneficial for their ventures progress, along this benefit it may provide other
as well in term of increasing sales.
As research evidence, marketer can utilize many theories developed by several
researchers on the basis of their actual observations. For example, mismanagement of consumer
loyalty concept is related to Werner Reinartz and V. Kumar (El Kihal, Erdem and Schulze,
2020). According to them, those people who seek to buy a product even hesitate to pay more
than other buyers are included in category of loyal, who always stay loyal with a brand. These
types of buyers, conduct word of mouth promotion which help to drives the sales of a company
at high extent and promote their venture all over the world. Kumar and Reinartz, provide a
concept for consumer, which made marketers able to understand and successful manage
customer loyalty, it drives their attentions and attempts towards conducting those practices which
relate to overall process. Under their theory, they define reasons behind high consumer turnover,
and approaches used to retain potential shopper, which is actually quite important and useful.
As research evidence, marketer can consider suggestions of Dowling and Mark Uncles,
as they arise question that “Do customer loyalty programs really work”. Under this question they
provide information about attempts conducted by many companies to build customer loyalty in
term of developing effective programs or schemes (Koo, Yu and Han, 2020). With the help of
their observations, they suggest that a marketer before taking initiative to introduce a loyalty
program in regard to buyer, can conduct in depth investigation about its success, they need to be
wide to full worth it and compare this with realistic assessment of advantages of overall program.
They define that lack of attractiveness of products lose loyal customer. According to that
marketer can make their goods attractive by making their packaging attractive and promoting it
through social media marketing tools.
RECOMMENDATION
 It is quite easy for any company whether it operates into retail or fashion industry, to
make their buyers a loyal customer, when they choose the right and most appropriate
method. For instance, the best initiative that a firm may take to enhance customer loyalty
is to take feedbacks and reviews after and before sales by using the most influencing
social media sources, where majority of customer has created their accounts.

 By creating accounts of Instagram and others popular channels, marketer can take major
steps towards establishing consumer loyalty, because with the help this channel they can
take reviews from each buyer about products, quality, services and then make changes,
which bring benefits for venture in term of increasing sales and also in the context of
customers as they can buy satisfactory items.
 More better tactics are available in the corporate world that has been utilized by many
marketers just to build and successfully maintain customer loyalty. For instance, marketer
can use an appropriate technique in term of encouraging potential customer to refer their
products and services after getting satisfaction to friends. In order to do so individual
buyer, get specific discount in their next purchase, which is quite exciting offer that no
other brand can offer.
CONCLUSION
From above discussion, it has been concluded that by focus on customer loyalty and
using approaches to enhance this activity, many organizations has gained competitive edge while
operating in particular sector, which is quite important and useful for them. Furthermore, by
summing up above analysis, it has been summarized that by using prepositions from Reichheld
theory, marketers have used appropriate research evidences in regard to customer loyalty in
practices that help to enhanced it much better than last few years or months.

REFERENCES
Book and Journals
El Kihal, S., Erdem, T. and Schulze, C., 2020. Customer Return Rate Evolution. Available at
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Khajeheian, D. and Ebrahimi, P., 2020. Media branding and value co-creation: effect of user
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Kim, B. and Kim, D., 2020. Attracted to or locked in? Explaining consumer loyalty toward
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Koo, B., Yu, J. and Han, H., 2020. The role of loyalty programs in boosting hotel guest loyalty:
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Lubbe, I. and Duh, H., 2020, November. DRIVERS OF ATTITUDINAL AND
BEHAVIOURAL LOYALTIES TO SELECTED RESTAURANTS IN AN EMERGING
MARKET. In 2020 Global Marketing Conference at Seoul (pp. 1394-1400).
Mgiba, F.M. and Madela, K., 2020. South African fuel industry, customer perceptions and
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Othman, A.K. and et.al., 2020. Factors that influence customer loyalty in using e-
commerce. Journal of Islamic Management Studies. 2(2). pp.43-58.
Ramazanian, M.R., Yakideh, K. and Tafaghodi, H.R., 2020. Investigation of indirect role of
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Wijaya, E., Suyono, S. and Santoso, P.H., 2020. RELATIONSHIP OF MARKETING TACTICS
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Online

7 Factors That Affect Customer Loyalty. 2021. [Online]. Available Through: <
https://www.consumerbrandbuilders.com/7-factors-effect-customer-loyalty/>
Tesco hints at big plans for Clubcard. 2021. [Online]. Available Through:
<https://www.marketingweek.com/tesco-plans-for-clubcard-loyalty-scheme/>