Loyalty, customer

While plugging gaps in service quality helps to improve customer satisfaction, this is a qualifier for long-term customer loyalty. The two concepts are not the same. Piercy (2002) distinguishes them as follows  

The benehts of customer loyalty are potentially huge. The loyal customer should be viewed in terms of lifetime spending potential. Thus, a customer of VW Audi Group could be viewed as worth 300k rather than the 30k of today s sales transaction. As Johnston and Clark (2005) put it, loyal customers  

While most organisations are under pressme to reduce prices, speed up delivery and improve customer service, the best will have a clear focus (page 27) as a key part of their competitive strategy. This focus needs to be improved and 

Evaluate Treacy and Wiersema s value disciplines based on Porter s views on differentiating strategies (section 1.4.3). 

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Most producers believe in the adage quality pays in terms of better reputation and sales, customer loyalty, lower reject rates, service and warranty costs. They should also realize that safety pays in terms of reducing the legal exposure and the tremendous costs that this can incur, both directly and indirectly, for example from compensation, legal fees, time and effort, increased insurance premiums, recalls and publicity (Wright, 1989). Few manufacturers understand all the cost factors involved, and many take a shortsighted view of the actual situation with regard to the costs of safety. 

Frameworks Across the business models and system specification, there often are generic problem frameworks that appear in specific forms. For example, the business description (and hence system spec) for a seminar company might have frameworks for resource allocation (assign instructors and rooms), inventory and production (maintain course notes inventory for deliveries), and customer loyalty (monitor product preferences... 

Have I adjusted my compensation system to account for both obtaining new business and ensuring ongoing customer loyalty ... 

Customer loyalty, in turn, is driven by customer satisfaction. This relationship has similar intuitive appeal if customers are satisfied with a vendor s products and services, then it is only natural that loyalty should follow. Anecdotal support abounds, such as Xerox s finding that top-box customers in a satisfaction survey are six times more likely to repurchase than those responding with four out of five (Heskett, et ah, 1994). 

The result is a parsimonious framework with intuitive appeal that supports investments in customer satisfaction programs and customer loyalty programs. To counter-balance the linkages discussed above, the cost impact of the vendor s customer management effort can be implicitly (e.g. Heskett, et al., 1994) or explicitly (e.g. Bowman Narayandas, 2004 Kamakura, Mittal, de Rose, Mazzon, 2002) accounted for. 

Rather than providing support for the existence of a profit chain-of-effects framework, and the investments in customer satisfaction and customer loyalty programs that rely on it, simple pairwise analyses of profit-chain variables almost always provide results that raise doubt about its underlying assumptions. Three examples follow. 

Example 1 - Customer loyalty and customer profitability. Investments made in customer loyalty initiatives are largely justified by an assumed positive influence on profitability. The empirical results of Reinartz and Kumar (2002), however, challenge the assumption that higher loyalty is associated with increased profits. They examine the... 

Second, links can be asymmetric. That is, the impact of a change of one unit for an antecedent variable (e.g. the impact of customer satisfaction on customer loyalty) can vary depending on whether the change is an increase or decrease, and/or depending on whether the vendor firm currently operates above or below a specific scale point or reference point. Reference points arise when customers evaluate performance on the basis of relative performance and not absolute performance (Mittal, Ross, Baldasare, 1998). 

Third, simple approaches constrain the relationship to be the same for all contexts. Jones and Sasser (1995) find that the customer satisfaction-customer loyalty relationship varies by industry, possibly because of differences in competitive environment. Bowman and Narayandas (2001, 2004) find that customer-specific factors such as the competitive context at a given customer account can occasion differential responsiveness. Accounting for heterogeneity in customer relationships and customer response to a vendor s strategies and tactics is a key theme of much recent research in management science. 

In summary, these descriptive results support our basic thesis that the impact of satisfaction and customer loyalty on customer profitability is moderated by situation-specific factors encountered by the vendor. 

Loveman, G. W. 1998. Employee satisfaction, customer loyalty, and financial performance an empirical examination of the service profit chain in retail banking. Journal of Service Research, 2(2) 138-144. 

Reinartz, W. J. Sc Kumar, V. 2002. The mismanagement of customer loyalty. Harvard Business Review, 80(7) 86-92. 

Chemical suppliers generating profits from selling their know-how, participation in the proceeds from Chemical Leasing co-operations after implementation, improved customer loyalty, and many more. 

Loyalty has received a considerable amount of attention from both marketing theorists and practitioners. Most would agree that there are positive consequences associated with a loyal customer base. However, there are other areas of disagreement associated with customer loyalty. 

Chandrashekaran M, Rotte K, Tax SS, Grewal R. 2007. Satisfaction strength and customer loyalty. J Market Res... 

Palmatier RW, Scheer LK, Steenkamp JEM. 2007. Customer loyalty to whom Managing the benefits and risks of salesperson-owned loyalty. ]Market Res 44 185. 

Customers respond to what they see, hear, and feel. Designing a pharmacy to address the everyday needs of our on-the-go society will make the store successful. Merchandising tools are used in every aspect of the pharmacy business, drawing customers to the location, making it easy and comfortable to shop in the stores, and building customer loyalty. 

Increase customer loyalty from using solutions. 

If you re implementing a business model innovation, then you might have such performance indicators as profit, earnings, volume, customer loyalty, market share, revenue, and so on. 

MPF Service Websites Secondly, MPF service Websites can help to provide customers with a comprehensive and convenient one-stop-shop-ping place for a wide range of financial services. The higher switching cost of moving the entire service package to other providers may increase customer loyalty. Increased flexibility of MPF account management should increase customer satisfaction. 

In addition to other traits, technical service personnel must have an unusually stringent set of personal and professional ethics. It is through these people that the plastics producer gains the professional respect and personal favor of his customers. These technical service men, along with sales people, build up invaluable customer loyalties. Establishment of such feelings of respect and confidence pays off when other things are equal in a fiercely competitive market. 

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