In this slideshow, we explore what loyalty is and how it relates to your relationships with customers. The mass-marketing approaches of the ’60s and ’70s ignored the role of customer loyalty as an important parameter of marketing activities. There has long been a shift from this transaction based-approach into a relationship-based strategy. The focus changes from acquisition to retention. The new goal is to enhance customer loyalty by focusing on the lifetime value of existing customers, considered just as important as attracting new customers. Loyalty is the maintenance of trust in a person, a party, an institution; which fosters strong feelings of support or allegiance. An individual has a sense of belonging to a relationship. In business, this feeling of loyalty a customer feels with a brand or business yields a deeply held commitment for consistent future consumption.

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WHAT IS CUSTOMER LOYALTY?
Loyalty is the maintenance of trust in a person, a party, an institution; which fosters strong feelings of support
or allegiance. An individual has sense of belonging to a relationship.
In business, this feeling of loyalty a customer feels with a brand or business yields a deeply held commitment
for consistent future consumption. Therefore, repetitious purchase behaviour is often used by a business as an
indicator of loyalty (although there can be other contributors)
The term customer loyalty is used as opposed to brand loyalty to emphasise that loyalty is a feature of people,
rather than a characteristic of a brand.

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THE BENEFITS OF LOYAL CUSTOMERS
The mass-marketing approaches of the ’60s and ’70s ignored customer loyalty in their marketing activities, but
there has long been a shift from this transaction based-approach to relationship building. From an acquisition
to retention focus. Focus is on the lifetime value of existing customers as much as attracting new customers.
Customer loyalty is profitable. When a company retains just 5 percent more of its customers, profits increase by
25 percent to 125 percent.” (Bowen & Chen, 2001). Loyal customers provide more repeat business and are less
likely to shop around, so this higher retention of existing customers reduces acquisition marketing costs.
Businesses can focus more of their energy into strengthening relationships with current customers by doing
everything they can to meet their needs, enhancing their loyalty.

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RELATIONSHIP MARKETING
The foundation for a relationship marketing strategy is “a core service around which to build a customer
relationship, customizing the relationship to the individual customer, augmenting the core service with extra
benefits, pricing services to encourage customer loyalty, and marketing to employees so that they, in turn, will
perform well for customers” (Berry, 1983).
Relationship marketing is the marketing activities that attract, develop, maintain, and enhance customer
satisfaction and fostering customer retention. The focus is the lifetime value of the customer rather than the
value of a single transaction – the underlying assumption being that establishing and maintaining relationships
with customers will foster customer retention. Businesses use strategies to bond with their customers to
enhance their commitment.

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CUSTOMER SATISFACTION
Customer satisfaction is one of the most important criteria for customer loyalty. When
satisfaction levels are high, the potential for loyalty is high; when satisfaction levels are low, there is
a little chain of retaining those customers. Customers are also far more likely to be satisfied if they
trust a business, and there is a correlation between higher satisfaction and positive word of mouth
intent. Highly satisfied customers are likely to tell their friends about you.
Satisfaction is a popular measurement that marketers use to determine how happy customers are
with their company’s services and or products. Businesses can use research such as customer
surveys to determine how happy their customers are and how to improve their experiences.

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The cost of replacing defected customers is significantly higher than the cost of retaining them. To
enhance customer loyalty, there are several tools a business can use.
Loyalty Program Benchmarking
Finding out what it takes for
highly satisfied customers, and
keeping this as a standard.
CRM
Managing your relationships
and interactions with
customers & prospects.
Brand Image
What comes to mind in the
mind of your target market
when they think of you?
Reward customers for their
loyalty with discounts or other
rewards.
TOOLS TO ENHANCE CUSTOMER LOYALTY

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Loyalty programs are a popular strategy for maintaining customer loyalty and have two main aims:
• One is to increase sales revenues through increased purchase levels, and/or increasing the range of products
consumed.
• The second is a defensive aim, to build a closer bond between the brand and current customers, to maintain
them in the current customer base.
Benchmarking performance & service quality is another strategy to enhance customer loyalty. Relationship
marketing and service improvement go hand in hand. Businesses should do everything they can to keep
improving their customer experience. This service quality adds more value to the core product, which improves
customer satisfaction, strengthening relationship bonds and increasing loyalty. Benchmarking a high level of
performance from your staff and/or systems helps ensure to keep the level of service quality high.
TOOLS TO ENHANCE CUSTOMER LOYALTY…

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CRM (Customer Relationship Management) has come into prominence as advances in technology over the past
thirty years. Email database management enables businesses to regularly be in contact with customers. Because
past experiences impact customer satisfaction, the quality of a CRM can mediate how customer satisfaction
translates into loyalty. When customers perceive a higher quality of CRM, this strengthens relationships.
Brand Image of a business can increase customer loyalty. Invest in your brand and the image you portray in the
minds of customers. Your brand can be a mediator of the link between satisfaction and loyalty. The more
customers connect with your brand, the more they trust you. Research has shown (Nyadzayo & Khajehzadeh,
2016) that a stronger brand image can lead to a higher perceived CRM quality, enhancing loyalty. Just look at
Apple around ten years ago!
TOOLS TO ENHANCE CUSTOMER LOYALTY…

9. Daniel Hopper
Marketing Specialist - BYB MARKETING
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