The Emotionally Attached Business Dr. Osman Khan Consultant, Trainer, Speaker, Bolger Senior Lecturer, University of East ...
Why create loyalty? <ul><li>Save costs (marketing, acquiring new customers, information, etc.) </li></ul><ul><li>They spen...
How do most companies try to create loyalty?
How do most companies attempt to create loyalty? <ul><li>Through loyalty programs </li></ul><ul><li>Higher quality service...
Most companies in the B2B sector aim to create… Behavioral Loyalty…  Meaning the customer will continue to purchase from t...
Behaviorally Loyal Customer... <ul><li>Will continue to do business with the company </li></ul><ul><li>Is there because of...
BUT… there are problems…
Problems with behaviorally loyal customers… <ul><li>Will only be loyal due to a barrier </li></ul><ul><li>This barrier can...
Problems with most loyalty programs… <ul><li>Can be copied easily (within a couple of years at most) </li></ul><ul><li>Cus...
Then what can companies do… Do something extra.. Develop positive attitudes among customers!
Attitudinal Loyalty <ul><li>Customers who not only do repeat purchase </li></ul><ul><li>But also… </li></ul><ul><li>Have a...
Benefits of Attitudinal Loyalty <ul><li>The customer is not bound by barriers </li></ul><ul><li>Will  prefer  to do busine...
However…. Attitudinally loyal customers may still seek other options i.e. competing brands
Solution… ?
Consider Sports supporters <ul><li>If the team loses a match / tournament </li></ul><ul><li>The supporter  STILL  supports...
Why? Because they are  emotionally attached  to the company Not only like a brand but  LOVE  it &  Live  it!
Examples from other firms <ul><li>Apple </li></ul><ul><li>Harley-Davidson </li></ul><ul><li>Starbucks & Costa </li></ul><u...
Why is Emotional Loyalty better? <ul><li>Will  only  want to do business with us </li></ul><ul><li>Will  NOT  look for alt...
B2B examples <ul><li>Park Place Lexus </li></ul><ul><li>Caterpillar (Finance) </li></ul><ul><li>Sunny Fresh Foods </li></u...
Loyalty at Best Practice Firms
Moving up the loyalty ladder What most companies aim for What most companies aim for What most companies aim for
Loyalty Management Model
Managing Loyalty  (detailed view)
What needs to be adopted <ul><li>Brand Orientation </li></ul><ul><li>Customer Orientation </li></ul><ul><li>Market Orienta...
Tools to implement best practices <ul><li>Leadership </li></ul><ul><li>Employees </li></ul><ul><li>Innovation </li></ul><u...
Customer Loyalty Lifecycle
Thanks for your time…  Any questions or comments? Dr. Osman Khan http:// blog.cibmp.org [email_address]
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Osman Khan

  1. 1. The Emotionally Attached Business Dr. Osman Khan Consultant, Trainer, Speaker, Bolger Senior Lecturer, University of East London Dr. Osman Khan
  2. 2. Why create loyalty? <ul><li>Save costs (marketing, acquiring new customers, information, etc.) </li></ul><ul><li>They spend more with the company </li></ul><ul><li>Will buy a greater variety of products </li></ul><ul><li>Will recommend company to others </li></ul><ul><li>Increase in Market Share </li></ul><ul><li>Increase in Profitability </li></ul><ul><li>Increased shareholder value </li></ul>
  3. 3. How do most companies try to create loyalty?
  4. 4. How do most companies attempt to create loyalty? <ul><li>Through loyalty programs </li></ul><ul><li>Higher quality services </li></ul><ul><li>Better employee training </li></ul><ul><li>Creating value for the customer </li></ul><ul><li>Improving customer satisfaction </li></ul><ul><li>Offering competitive prices </li></ul><ul><li>Improving company image </li></ul>
  5. 5. Most companies in the B2B sector aim to create… Behavioral Loyalty… Meaning the customer will continue to purchase from the company or repeat buying
  6. 6. Behaviorally Loyal Customer... <ul><li>Will continue to do business with the company </li></ul><ul><li>Is there because of low costs </li></ul><ul><li>Maybe there due to improved quality </li></ul><ul><li>And perhaps because of satisfaction </li></ul><ul><li>Or has no other option, thus does business with us </li></ul>
  7. 7. BUT… there are problems…
  8. 8. Problems with behaviorally loyal customers… <ul><li>Will only be loyal due to a barrier </li></ul><ul><li>This barrier can be </li></ul><ul><ul><li>Low cost </li></ul></ul><ul><ul><li>Convenience </li></ul></ul><ul><ul><li>Location </li></ul></ul><ul><ul><li>Sunk Costs </li></ul></ul><ul><ul><li>Switching Costs </li></ul></ul><ul><li>Usually these barriers are created through loyalty programs </li></ul>
  9. 9. Problems with most loyalty programs… <ul><li>Can be copied easily (within a couple of years at most) </li></ul><ul><li>Customer may find a program which gives more points, better discounts, or more gifts, and thus may switch </li></ul><ul><li>Once the customer obtains the gift, then he/she may switch (i.e. cashing in the points) </li></ul>
  10. 10. Then what can companies do… Do something extra.. Develop positive attitudes among customers!
  11. 11. Attitudinal Loyalty <ul><li>Customers who not only do repeat purchase </li></ul><ul><li>But also… </li></ul><ul><li>Have a positive attitude about the company </li></ul>
  12. 12. Benefits of Attitudinal Loyalty <ul><li>The customer is not bound by barriers </li></ul><ul><li>Will prefer to do business with us </li></ul><ul><li>Will purchase more </li></ul><ul><li>Will recommend others to us </li></ul><ul><li>Will purchase a greater variety of services </li></ul><ul><li>More profitable than behaviorally loyal customers </li></ul>
  13. 13. However…. Attitudinally loyal customers may still seek other options i.e. competing brands
  14. 14. Solution… ?
  15. 15. Consider Sports supporters <ul><li>If the team loses a match / tournament </li></ul><ul><li>The supporter STILL supports the club </li></ul><ul><li>Will continue to buy tickets for next game </li></ul><ul><li>Will still purchase t-shirts and other memorabilia of the club </li></ul><ul><li>Other examples can be music, not for profit organizations, etc. </li></ul>
  16. 16. Why? Because they are emotionally attached to the company Not only like a brand but LOVE it & Live it!
  17. 17. Examples from other firms <ul><li>Apple </li></ul><ul><li>Harley-Davidson </li></ul><ul><li>Starbucks & Costa </li></ul><ul><li>Ikea </li></ul><ul><li>Zara </li></ul><ul><li>Coke vs. Pepsi </li></ul><ul><li>Singapore Airlines </li></ul><ul><li>Walt Disney </li></ul><ul><li>Microsoft </li></ul>
  18. 18. Why is Emotional Loyalty better? <ul><li>Will only want to do business with us </li></ul><ul><li>Will NOT look for alternatives </li></ul><ul><li>Will spend more, and buy greater variety of products </li></ul><ul><li>Will go out of their way to tell others about us </li></ul><ul><li>Will be wiling to pay higher prices (up to 20% higher) </li></ul><ul><li>Will forgive our mistakes </li></ul><ul><li>Will be more profitably than all of the other customer types </li></ul>
  19. 19. B2B examples <ul><li>Park Place Lexus </li></ul><ul><li>Caterpillar (Finance) </li></ul><ul><li>Sunny Fresh Foods </li></ul><ul><li>Poudre Valley Health System </li></ul><ul><li>PRO-TEC </li></ul><ul><li>Premier </li></ul>
  20. 20. Loyalty at Best Practice Firms
  21. 21. Moving up the loyalty ladder What most companies aim for What most companies aim for What most companies aim for
  22. 22. Loyalty Management Model
  23. 23. Managing Loyalty (detailed view)
  24. 24. What needs to be adopted <ul><li>Brand Orientation </li></ul><ul><li>Customer Orientation </li></ul><ul><li>Market Orientation </li></ul><ul><li>Quality Orientation </li></ul><ul><li>Service Orientation </li></ul>
  25. 25. Tools to implement best practices <ul><li>Leadership </li></ul><ul><li>Employees </li></ul><ul><li>Innovation </li></ul><ul><li>Relationship Management </li></ul><ul><ul><li>Information Technology </li></ul></ul><ul><ul><li>Knowledge Management </li></ul></ul>
  26. 26. Customer Loyalty Lifecycle
  27. 27. Thanks for your time… Any questions or comments? Dr. Osman Khan http:// blog.cibmp.org [email_address]

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