The document discusses different types of customer loyalty and how companies can develop emotional loyalty. It explains that behavioral loyalty through programs can be copied by competitors, while attitudinal loyalty provides positive attitudes but customers may still seek alternatives. Emotional loyalty is the strongest form of loyalty, where customers love the company and will not consider alternatives even if mistakes are made. The document recommends that companies adopt practices like brand orientation, customer orientation, and innovation to develop emotional loyalty through the customer lifecycle.

1. The Emotionally Attached Business Dr. Osman Khan Consultant, Trainer, Speaker, Bolger Senior Lecturer, University of East London Dr. Osman Khan

2. Why create loyalty? Save costs (marketing, acquiring new customers, information, etc.) They spend more with the company Will buy a greater variety of products Will recommend company to others Increase in Market Share Increase in Profitability Increased shareholder value

3. How do most companies try to create loyalty?

4. How do most companies attempt to create loyalty? Through loyalty programs Higher quality services Better employee training Creating value for the customer Improving customer satisfaction Offering competitive prices Improving company image

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. Behaviorally Loyal Customer... Will continue to do business with the company Is there because of low costs Maybe there due to improved quality And perhaps because of satisfaction Or has no other option, thus does business with us

7. BUT… there are problems…

8. Problems with behaviorally loyal customers… Will only be loyal due to a barrier This barrier can be Low cost Convenience Location Sunk Costs Switching Costs Usually these barriers are created through loyalty programs

9. Problems with most loyalty programs… Can be copied easily (within a couple of years at most) Customer may find a program which gives more points, better discounts, or more gifts, and thus may switch Once the customer obtains the gift, then he/she may switch (i.e. cashing in the points)

10. Then what can companies do… Do something extra.. Develop positive attitudes among customers!

11. Attitudinal Loyalty Customers who not only do repeat purchase But also… Have a positive attitude about the company

12. Benefits of Attitudinal Loyalty The customer is not bound by barriers Will prefer to do business with us Will purchase more Will recommend others to us Will purchase a greater variety of services More profitable than behaviorally loyal customers

13. However…. Attitudinally loyal customers may still seek other options i.e. competing brands

14. Solution… ?

15. Consider Sports supporters If the team loses a match / tournament The supporter STILL supports the club Will continue to buy tickets for next game Will still purchase t-shirts and other memorabilia of the club Other examples can be music, not for profit organizations, etc.

16. Why? Because they are emotionally attached to the company Not only like a brand but LOVE it & Live it!

17. Examples from other firms Apple Harley-Davidson Starbucks & Costa Ikea Zara Coke vs. Pepsi Singapore Airlines Walt Disney Microsoft

18. Why is Emotional Loyalty better? Will only want to do business with us Will NOT look for alternatives Will spend more, and buy greater variety of products Will go out of their way to tell others about us Will be wiling to pay higher prices (up to 20% higher) Will forgive our mistakes Will be more profitably than all of the other customer types

19. B2B examples Park Place Lexus Caterpillar (Finance) Sunny Fresh Foods Poudre Valley Health System PRO-TEC Premier

20. Loyalty at Best Practice Firms

21. Moving up the loyalty ladder What most companies aim for What most companies aim for What most companies aim for

22. Loyalty Management Model

23. Managing Loyalty (detailed view)

24. What needs to be adopted Brand Orientation Customer Orientation Market Orientation Quality Orientation Service Orientation

25. Tools to implement best practices Leadership Employees Innovation Relationship Management Information Technology Knowledge Management

26. Customer Loyalty Lifecycle

27. Thanks for your time… Any questions or comments? Dr. Osman Khan http:// blog.cibmp.org [email_address]