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Customer loyalty - TEDO
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Customer loyalty - TEDO


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  • 1. Customer loyalty
  • 2. Customer loyalty
    • Customer loyalty is the feeling of attachment to or affection for company’s products, services or people.
  • 3. Advantages of loyal customers
    • The company’s loyal customers are also its most profitable customers. With each additional year of relationship, the customers become less costly to serve. They become the true business builders because they buy more and bring in more customers through referrals & word of mouth.
  • 4. Advantages
    • Increase in revenues as a result of repeat purchases & referrals.
    • Reduction in cost due to lower acquisition expenses.
    • Increase in employee retention because of improvement in job pride.
  • 5. Reasons for shift in customer loyalty
    • Dissatisfaction from products /services/people
    • Entry of new products / competitors
    • Reduction in brand dominance
    • Company image / poor financial results
    • De-regulation
    • New technologies
  • 6. Soft part of quality
    • With the advancement of production technology, the differences in products of various brands will diminish. In this environment it is the soft part of quality, i.e method of delivery and after sales service, which will become the differentiating factor in brand building and earning customer loyalty.
  • 7. Customer categories...
    • Loyal : Loyal customers experience high degree of satisfaction and keep coming back to the company. They also act as “free advertisement” for the company.
    • Defector : Defectors are customers who are not fully satisfied with the company’s products and services.
    • Adventurous: they are customers who are fully satisfied but still would like to change the products or services. They never stick to one brand.
    • Adventurous: they are customers who are fully satisfied but still would like to change the products or services. They never stick to one brand.
    • Captive: they are customers who can not shift loyalty because of monopoly of the company. They are compulsive buyers and have to accept the product irrespective of their satisfaction levels.
  • 8. Customer loyalty and behavior Satisfaction High Low to medium High Low to medium Loyalty High Low to medium Low to medium High Behavior Stay with Co. Leave the Co. Leave the Co. Stay with Co. Customer 1. Loyal 2. Defector 3. Adventurous 4. Captive
  • 9. Strategies for creating customer loyalty
  • 10. A. Offering more value to customers
    • The best way to maximize customer loyalty is to offer more & more value to the customers. The value is the combination of two variables:
    • 1. The benefits enjoyed by the customer.
    • 2. The price paid by the customer
  • 11. B. Long term perspective
    • The organizations must take long term perspective for sustained relationships with their customers and design the products accordingly. Many organizations compromise on quality for short term benefits and as a result they loose their markets to their better competitors in the long run.
  • 12. C. Customer rewards
    • Although customer rewards are considered as cheap promotional devices, yet more and more company’s are jumping on to the band wagon. From Airlines offering frequent flyer programs, Telecom company’s lowering their fees and Automobile companies offering gold coins are the examples of organizations trying to lure their customers.
  • 13. Customer rewards...
    • For the rewards to really earn the customer loyalty, the organization must develop a system in which customers are continuously informed about rewards of loyalty & are motivated to earn them.
    • From a customers prospective 4 elements determine the rewards value:-
    • 1. Cash value
    • 2. Aspirational value
    • 3. Relevance
    • 4. Convenience