Loyalty and customer retention in the telecoms industry Background In a service oriented industry like the telecommunication industry, loyalty is of the greatest importance. Several studies have been conducted on the correlation between increased levels of customer retention to increased revenue and profits. Various strategies and programs are implemented by service providers to ensure their customers stay loyal and to reduce the number of customers who switch their services to other service providers.
Definition Customer loyalty is both an attitudinal and behavioral tendency to favor one brand over all others, whether due to satisfaction with the product or service, its convenience or performance, or simply familiarity and comfort with the brand.
Customer loyalty encourages consumers to shop more consistently, spend a greater Customer loyality essay of wallet, and feel positive about a shopping experience, helping attract consumers to familiar brands in the face of a competitive environment.
Types of Loyalty To understand customer loyalty one must recognize there are different types and degrees of loyalty.
There is monogamous loyalty and there is polygamous. There are also behavioral and attitudinal aspects. Polygamous Loyalty We live in a world of polygamous, not monogamous loyalty. For example, a person might shop at Safeway, Thrifty Foods and Save-on-Foods and unfailingly shop at all three.
In their book Loyalty Myths, Keiningham et al. In the majority of cases, attempting to make customers completely loyal is unrealistic. A more realistic goal for businesses is to make customers as loyal as possible — to maximize customer share of wallet, frequency of purchase and overall profitability.
If a person made most purchases in a given product category from one supplier, regardless of the reason, the person was defined as loyal. A second element of loyalty is attitudinal loyalty. Like behavioral loyalty, attitudinal definitions have existed for a long time.
This second element of loyalty focuses on how strong the psychological commitment or attachment is to the brand.
By itself, it too has limitations. For example, how loyal are people who rave about a product and promote it to their friends, but then for whatever reason fail to buy it regularly themselves? In the opinion of many scholars, as a minimum, an adequate definition of customer loyalty includes the history of actions plus feelings and intentions toward the brand or commercial relationship.
Loyalty action and talk i. For more on attitudinal vs. Never, Light, Heavy and Extreme. The following is a description of typical or commonly observed characteristics of each user type: Never customers are those who are not affected by loyalty programs and their reward incentives in any way.
Light loyalty program users are ones defined as having reward program memberships and being influenced by their incentives, but only moderately. Heavy loyalty program users are consumers who are active and highly influenced members of reward programs. And finally, extreme loyalty program users are those consumers who are virtually addicted to or obsessed with loyalty programs.Relationship between customer satisfaction and loyalty The link between customer satisfaction and customer loyalty is not proportional suppose customer satisfaction is rated on a scale from one to five, at a very low level of customer satisfaction (level one), customers are likely to abandon the company and even bad mouth it.
As well, customer loyalty proved to be independent of customer satisfaction and customer complaints, which may have been due to the barriers erected to dissuade patients from changing to a new provider. Customer Relationship Management “Customer relationship management is a comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and customers”.
Customer Loyalty in hospitality industry Today, the ultimate goal of almost every kind of business is to increase its income and sales. In other word, the business wants to not only attract new customers to the products and service but also to maintain and encourage the current customers to .
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SAS Institute of Cary, North Carolina is an organization that fosters innovation, employee loyalty, and customer satisfaction.
Over the past three decades, SAS Institute. Read this essay on Customer Loyality.
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