A Scientific article explains the four subsets of customer loyalty.
By now, we would have heard the term “customer loyalty” repeatedly discussed on this blog and from many other sources. As a matter of fact, our previous post, “investing in the right relationships,” explains in detail the importance of building customer loyalty. But what are the subsets of customer loyalty? In this article, we will review the types of customer loyalty and describe which customer loyalty subset a company should strive to convert and keep.
Loyal customers are known to be an asset to a business’s performance and success. Businesses need to integrate customers into their strategies as a means to build customer loyalty toward the brand. The business should always aim to (I) exceed customer expectations and (II) deliver and keep promises with customers whenever feasible; this is crucial in building customer trust, which is an essential component of loyalty and relationship building.
But how can a business build loyalty? Simple, by understanding the “what” and “how” of value. By understanding (I) what your customers value most from your business and (II) how to deliver this value? Remember that values may vary per customer group; in other words, values for one subset may not be the same for another. Example of values includes quality services or products, timeliness of delivery, reliability, security, and prices, amongst others.
The reason why each type of loyal customer is classified into separate subsets is based on the different perspectives towards the brand that each group holds. A loyal customer subset can be those who are:
Satisfied with the product and service offerings of a business.
Loyal only to the price that the brand offers.
Loyal only because of the benefits offered by the company or brand such as, such as loyalty programs, coupons, discounts, and others.
Purely loyal to the company or brand. This subset is devoted to the company and its offerings.
In the long run, the purely loyal customer will add more value to business growth and success than any other subset. However, businesses should distinguish the other types of loyalty and try to convert the “non-purely” loyal customers into loyal customers, thus increasing competitive advantage.
In summary, loyal customers provide stable revenue and financial gains for a business and protect against the competition while also increasing customer experiences and product and service innovation.
Original Article:
Basari, M.A.M.D. and Shamsudin, M.F., 2020. Does Customer Satisfaction Matters? Journal of Undergraduate Social Science and Technology, 2(1).