Do Companies Need Loyalty Programs?

Thus, companies seek to strengthen customer loyalty. Brand loyalty is considered to tilt the consumer to purchase the package / product specific brand (Jacoby and Chestnut, 1978). Later, Oliver (1997) defined loyalty as "a deeply held commitment to REBUY or repatronize preferred product / service consistently in the future, thereby causing repetitive same-brand or same brand set purchasing, despite situational influences and marketing activities, which would result in causing switching behavior "(p. 34). This conceptual definition covers two different aspects of loyalty: the behavioral. This is consistent with an integrated conceptual framework proposed by Dick and Basu (1994), that customer loyalty is regarded as a "power relationship between the relative position of the individual and repeat

According Baker M (2000), loyalty schemes is the “Overt attempt of exchanging partnership to build a long term relationship association, characterised by purposeful co-operation and mutual dependence on the development of social, as well as structural bonds with consumer”.

While I’m an atypical U.S. consumer who doesn’t buy into marketing hype, I do have strong product/service loyalty affiliations. I’ll try to keep my Journal entry under 1000 words! I like to revisit the meaning of familiar words. Merriam-Webster (n.d.) defines loyalty as, “The quality or state or an instance of being loyal”. This is exactly what brand loyalty and loyalty programs are trying to create: an ongoing experience with multiple touch-points that captures followers and keeps them engaged through rewards, added value, and “prestige”. The goal is to lengthen “the lifetime value of the customer” (Tanner & Raymond, 2010, p. 284) which helps to maximize profits.

Brand loyalty is when customer purchasing behavior is repetitive and customers become committed to a certain brand over a long period. Customers can become loyal to a type of brand regardless of pricing and other factors contributing to the success of a business such as location and convenience. Businesses use loyalty programs such as loyalty rewards programs to encourage loyal customers.

By and large, loyal customers will be beneficial to a brand as it can reduce the cost of marketing. Moreover, customer loyalty can be made the most of brand extension and market penetration strategies. As a final point, “loyal customer is an asset for a brand, and has been identified as major determinant of brand equity” (Dekimpe et al., 1997:20).

The attitudinal definition of loyalty implies that loyalty is a state of mind. By this definition, a customer is "loyal" to a brand or a company if they have a positive, preferential attitude toward it. They like the company, its products or its brands, and they therefore prefer to buy from it, rather than from the company's competitors. It is all about a consumer having an emotional attachment to a brand, liking it more than others, and even loving it.

From the above definitions of customer loyalty, I can say that it is related to attitude or behaviour of the customers over a product or service resulting in repeat purchasing or patronizing. It is also said that loyalty is also closely related to commitment but is different from its reciprocity because it is usually applied for customer-seller relationship (Pritchard, 1999). In addition, customer loyalty consists of not only building but maintaining a relationship with one’s customer (Chow & Holden, 1997). According to Mitchell & Sanders (1995), that customer loyalty has been described as a connection and commitment to seller’s offering over the long term. Furthermore, Jones and Sasser (1995) discovered that one of the key element of securing customer loyalty is through customer satisfaction.

A service Organization must know the concepts of customer loyalty.Understanding customers need in buying a product and the right approach and proper communication in dealing with customer is important to become them loyal.Customer loyalty have different types and degrees of loyalty that must recognize by any service firms.One type of customer loyalty is Monogamous loyalty and the second type is Polygamous loyalty. There is also behavioural and attidunal aspects.According to Keiningham et al.(2005)on his book loyalty myths.The earth we live in is Polygamous loyalty and not monogamous loyalty.Monogamous loyalty is where customers shops in different retailers such as Coles,Woolworths,Safeway and

Aaker (1991) defines brand loyalty as ‘the attachment that a customer has to a brand’. Two different levels of loyalty are classified: behavioural and cognitive loyalty (Keller, 1998). Behavioural loyalty can be indicated by a number of repeated purchases (Keller, 1998). Cognitive loyalty refers to the consumers’ intention to buy the brand as the first choice (Keller, 1998; Yoo and Donthu, 2001). Another indicator of loyalty is the customer’s willingness to pay higher price for a brand in comparison with another brand offering similar benefits (Aaker, 1996).

In the current competitive environment, customers have been provided with a wide range of choices to satisfy their needs and demands at the global level. It means that customers’ bargaining power has increased dramatically in the present business environment. It not only adds pressure on enterprises to develop new customers, but also increases the difficulty for enterprises to retain existing customers. Therefore, the development of customer loyalty is often the challenges for enterprises although its importance has been generally accepted. This research attempts to add implications for enterprises to develop and maintain customer loyalty.

When customers become loyal, they are not only buying your product or service, they become emotionally attached to your brand. They may mention your brand to their friends and family endorsing your brand through word

A similar research Loyalty in Retail: A strategic success or a management failure states that successful loyalty programs do not exist in vacuum. The loyalty cards provided by the retailers are compared to the hammer. Just as a hammer does not build a house, a loyalty card does not build customer loyalty. Customer loyalty has been used as a strategic approach in increasing customer value and thus providing a good customer experience but it doesn’t work alone. A brand value has to be created in which involvement of the staff, quality of the products, knowledge about the customers etc. are required.

Relationship marketing in telecommunication accommodation industry makes for a consequential part because its nature is unique in this sector. It is a topic of discussion that frequency in the process of buying value in accommodation industries, for example, telecommunication sector. reports of Loyalty and Retention studies suggest that on an average, the cost to magnetize an incipient customer is more than what it takes to implement a retention strategy . Kelley, Gilbert, & Mannicom, 2003)[ 12]. Reichheld and Sasser (1990) found in their study of internet apparel market that the cost of customer acquisition is 20 to 40 percent more than preponderant than the

The relationship between customer satisfaction and brand loyalty has proven its role and importance in Management as well as in marketing. Throughout previous decades, Marketing researchers have acclaimed the advantages of satisfaction and loyalty, and have mentioned them as directories of an organizational competitive benefit. On the other hand, brand loyalty is one of the most important constructions in marketing, due to its final effect on customers’ repeated purchases, and in fact, those loyal customers who purchase repeatedly are

Creating and maintaining strong brand and a band wagon of loyal customers have become increasingly difficult in today's competitive environment due to proliferation of numerous brands in a generic product category. Brand loyalty has been shown to be associated with higher rates of return on investment due to increase in the market share. Past studies in this area reveal the dependence of researchers to administer the scale developed by Kapferer and Laurent as well as