Report: Customer Loyalty Strategies and Myths Analysis

This report delves into the multifaceted realm of customer loyalty within marketing, examining its core concepts, strategies, and prevalent myths. It begins by defining customer loyalty as a behavioral and attitudinal tendency favoring one brand over others, driven by factors such as satisfaction, performance, and convenience. The report then explores various strategies employed by organizations to foster loyalty, including employee performance, effective marketing, customer loyalty programs (e.g., Amazon Prime, MAC Cosmetics, Starbucks), and customer engagement. Subsequently, it debunks common myths surrounding customer loyalty, such as the assumptions that satisfied customers are inherently loyal, that call centers enhance loyalty, that CRM software alone drives loyalty, and that NPS scores are the sole determinant of loyalty. The report underscores the importance of understanding customer preferences, continuous improvement, and the crucial role of employee interaction in building and sustaining customer loyalty. It concludes by emphasizing the need for businesses to prioritize customer satisfaction, provide adequate employee training, and adapt to evolving market dynamics to achieve lasting success.

Marketing

Table of Contents
INTRODUCTION...........................................................................................................................1
The Customer Loyalty.................................................................................................................1
Strategies......................................................................................................................................1
Myth’s in customer loyalty..........................................................................................................3
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Marketing can be determined as a business actions that allows the firm to promote or
deliver adequate information to customers regarding the products and services delivered by a
firm. There are many companies that provide their service users with similar type of products or
services. When a customer is willing to take purchase decision, then there are certain set of
expectations they have (Jobber and Ellis-Chadwick, 2012). When these aspects are satisfied, then
purchases are made. It is important for the firm to understand the preference that each of the
consumer has and services should be provided accordingly. Main focus of this report is on
identifying customer loyalty myth. Strategies will be discussed that are applied by organisations
to make people loyal and other related models will also be covered.
The Customer Loyalty
Main aim of any organisation is to gain maximum profit. This can only be attained by
them when they are able to fulfil requirement of customers. There are people who may prefer to
get high quality products at low price and there will be few who expect to get products that are of
high prices and high quantity (What is Customer Loyalty, 2015). Loyalty is dependent on
decision made by companies towards resolving the problems that are faced by them. To
understand the area of study more clearly, it requires to focus on basic concepts of customer
loyalty. In this context, loyalty can be determined as both behavioural and attitudinal tendency
enables to favour on one brand over all others. This can be due to satisfaction of goods, its
performance, convenience, comfort, familiarity, etc. When a customer is loyal, then it
encourages them consistent to shop more and they always feel positive that the purchases made
will satisfy them (Hair, Sarstedt and Mena, 2012). In other words, it can be stated that people
who are loyal will always make purchases that are made by them repeatedly.
Strategies
In this modern work where changes take place instantly, it provides people to make use
of variety of products and so they have many options to select from similar category of goods.
However, when talking about years back, the choice that people used to get were low (Hartley
and Claycomb, 2013). They had to stick on to one option and in this way, they were forced to be
loyal to the products or services. When compared with the modern era, there are many products
that are provided by different companies and thus, people have wider choice for selecting the
products or to try them out to know whether they will satisfy them or not. There are different
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aspects that have to be considered so that companies are able to raise the satisfaction level and
make them loyal. In this context, one of the effective consideration that needs to be made is in
relation with employee’s performance. They are the one who have direct interaction with
customer. There are certain set of roles and responsibilities that has to be played by them
(Mullin, Hardy and Sutton, 2014). When these are not performed by them in effective manner,
then it has negative impact over the business. In the process of decision making, there are many
confusions that are proper have and when these are not clarified by workers, then it becomes
difficult to make people loyal. With this respect, it is important for all the workers within the
business to understand the roles that have to be played by them.
Another aspects that has to be considered is related with marketing. With time, there are
many changes that have taken place in relation with technology (Linoff and Berry, 2011).
Organisations are able to have direct interaction with people. This way, the types of issues that
are faced by them are considered and appropriate steps are taken. When promotion of the
products and services are make, then it is enables to develop positive perception within the mind
of customers. However, reach to people need to be make in such a way that they are able to
develop a sense of requirement (Czinkota and Ronkainen, 2013). This way, it is favourable
enough to make the business deliver their products and services and to make customers loyal
towards.
Further, there are customer loyalty programs developed by companies in which it
includes convenience, rewards and appreciation so that users can be provided with lifestyle that
they will not get anywhere else (Terpstra, Foley and Sarathy, 2012). For example, Amazon
Prime made use of loyalty programmes in which customers were provided with free shipping and
other benefits like live streaming of movies, music, TV shows, etc. in addition to this people who
take full membership get more benefits with compared with other users.
Another set of strategy applied is related with making customers engaged. When people
are engaged, then it becomes favourable enough to make them purchases and this way they
become loyal (Chaffey and Ellis-Chadwick, 2016). Further, MAC Cosmetics has also made use
of loyalty program in which there are three tiers. As per the first one, customers are sign up for
free. Second tier states that when individuals make purchases above $150, then they get early
access to many products. Lastly, when purchases are made more than $500, then there are
rewards provided to customers. Moreover, Starbucks also make use of loyalty programs for
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customers. In this, people are provided with cards in which they have will get discount offers and
gifts. Further, they also get benefited when additional person is asked to make purchases (Linoff
and Berry, 2011). All these strategies are highly effective to make individuals get involved in the
operation of business and to get loyal for the same.
Myth’s in customer loyalty
Customer loyalty is a type of myth in which any problem or issue faced by people make
them to shift to other companies that deliver similar type of products and services. There are
certain set of time that is scheduled and this make their get involved in the program but at the
time when there are any other strategy applied, then it becomes difficult for them to make
customers attracted to goods. There are activities that have to be developed on frequent basis in
which all the people are involved in the activities. There are various types of myths in customer
loyalty. In this context, below given are few of them:
Customers satisfied are loyal: In order to measure the level of loyalty, it is done on the
basis of sales that have taken place. When the rate of sale is high or the purchase make highly,
then it is assumed that people are satisfied (Mullin, Hardy and Sutton, 2014). However, it is
identified that this is a type of myth. There is a level of satisfaction and that gets reduced with
time. This way, it required to conduct time to time market research so that management of the
business are able to find out the improvement that can be made. When with certain time period,
this is not done, then affects the business and people shift to other firms.
Loyalty increases to call centres: There are many companies that equate call centres, this
is done so that loyalty and management can be enhanced. However, it is identified that these
firms are doing so little and activities that are conducted are also low (Hartley and Claycomb,
2013). It is important for the organisation to consider the issues that are faced by people in
respect with products and services. Through call centre the rate of relationship with customer
improves but it is not effective enough to make people loyal.
Loyalty improves through CRM software: Customer Relationship Management (CRM) is
one of the effective tool that is used by firms so that they are able to make note of all the needs
and requirements. Further, it also determines the most important assist that organisation possess
for its customer. The application enables to provide all the details and ways that can be applied
by firms to raise their customer’s loyalty but this is only possible when the operator has
disciplined focus over the approaches to determine aspects for raising customer’s loyalty.
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Net Promoter Score (NPS) drives customer loyalty: NPS is a type of management tool
that enables the firm to gauge loyalty of service user’s relationship. More specifically, it divides
customers on the basis on which satisfaction level and claim that is correlated with revenue
growth (Hair, Sarstedt and Mena, 2012). Further, the calculation is made based on different
scales starting from 1 to 10. However, it is identified that with finding the level of satisfaction, it
can only be useful when appropriate steps are taken with the help of which issues are identified
that worked over it.
In accordance with the above presented information, it can be stated that there are
different type of strategies that are used by companies but these can be effective only when they
firms are able to focus on strategies that will be effective enough to raise the business and to
increase customer loyalty. In all the operations of the business, they need to consider the
preferences of service users. When the rate of satisfaction is high, then it becomes easy for firms
to make regular users to loyal once. This way, it can be stated that satisfaction customer are loyal
towards the products. However, when the rate of satisfaction among customers is low, then
loyalty also gets affected. In accordance with the case study of Tesco, it can be stated that people
who are loyal for long run enables the business to be more successful when compared with
people who are loyal for 12 week (Wilson, Zeithaml and Gremler, 2016). For example, a person
who spend $50 each week for products from supermarket, they will be more loyal when
compared with people who spend $100.
Further, steps need to be taken in which workers should be provided with the opportunity
to share their views and thoughts. They are the one who have direct interaction with customers
and so they know about the problems or issues that are faced by them. When appropriate steps
are taken to overcome them, then users can be satisfied. Main focus of the business should be
done in which satisfaction can be raised, when management is able to raise satisfaction, then they
are able to make people loyal for the products and services delivered. Further, reviews of the
people that are made also affect the business. There are many researches made by people in
which comparison is done so that they are able to select the most suitable products (Jobber and
Ellis-Chadwick, 2012). However, when a person is willing to purchase a product but the review
given on it is not positive, then it has negative impact over the business. In this context, it is
important for the companies to determine the problems that are identified in their services or
products that are delivered to them. Loyalty for customers is possible when there are frequent
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researches carried out. With time, there are many changes that have taken place and it is the
responsibilities of the business to taken proper steps with the help of which improvements in
operations can be made.
CONCLUSION
In accordance with the finding, it can be stated that understanding requirement of
customers is important. When these are done, then it becomes favourable enough for the business
to take up steps to raise the satisfaction level. Further, businesses need to provide their workers
with proper training so that the set of performance that has to be played by them are effectively
done. In conditions when workers fail to perform their set of roles properly, then customers are
not able to reach their satisfaction level. All the doubts that they have should be clarified. In
conditions were issues or problems are faced, proper training should be provided with the help of
which customers are able to reach out their satisfaction level. Further, time to time research
should be carried out so that they are able to identify the opportunities that prevail in the market
and better quality services are delivered.
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REFERENCES
Books and Journals:
Babin, B. J. and Zikmund, W. G., 2015. Exploring marketing research. Cengage Learning.
Chaffey, D. and Ellis-Chadwick, F., 2016. Digital marketing. Prentice Hall.
Czinkota, M. R. and Ronkainen, I. A., 2013. International marketing. Cengage Learning.
Hair, J. F., Sarstedt, M. and Mena, J. A., 2012. An assessment of the use of partial least squares
structural equation modeling in marketing research. Journal of the academy of marketing
science, 40(3), pp.414-433.
Hartley, R. F. and Claycomb, C., 2013. Marketing mistakes and successes. Wiley.
Jobber, D. and Ellis-Chadwick, F., 2012. Principles and practice of marketing (No. 7th).
McGraw-Hill Higher Education.
Linoff, G. S. and Berry, M. J., 2011. Data mining techniques: for marketing, sales, and customer
relationship management. John Wiley & Sons.
Mullin, B. J., Hardy, S. and Sutton, W., 2014. Sport Marketing 4th Edition. Human Kinetics.
Terpstra, V., Foley, J. and Sarathy, R., 2012. International marketing. Naper Press.
Wilson, A., Zeithaml, V. and Gremler, D., 2016. Services marketing: Integrating customer focus
across the firm. McGraw Hill.
Online
What is Customer Loyalty. 2015. [Online]. Available through:<
http://prloyaltymarketing.com/customer-loyalty/what-is-customer-loyalty/>
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