Why it pays to build customer loyalty

base, you ought to be involved more with areas that focus on customer loyalty.

A number of research studies have suggested that the emphasis on the 4Ps in the marketing mix is no longer the dominant marketing strategy. It has now been irrevocably replaced by relationship marketing.
I believe this is rightly so, how many business transactions have we realised out of the strong use of business connections and developing the right kind of strategic relationships.

Relationships are not easy to maintain, though they can be complex with some that must be kept for a long term and some that require social interactions and some that can simply be based on one-off transactions.
But is creating a relationship an end in itself? Certainly not. The benefits are only realised when you use other forms of maintenance like product differentiation and barriers to switching. I have realised that some customers prefer relationship marketing because of the prestige, reduction in risk and increase in recognition.

The manager must be careful, though, not every type of service business is appropriate for relationship marketing, some require a more detached approach. In some instances, it is determined by the stage of the business life cycle you are in — one runs the risk of making it counter-productive.

Sheth and Parvatiyar (1995) aptly describe the benefits of relationship marketing — it includes improved understanding of customer requirements, gaining the ability to customise and tailor solutions, reducing choice thereby simplifying the buying task, reducing information processing, lowering risk and maintaining psychological and cognitive comfort and consistency. Quite rightly put, in Zimbabwe, we are facing a very sensitive customer who is easily swayed by the slightest tidal wave. Who would have thought that the Internet would take over at the rate it has done for most businesses. A business must become more innovative than before.

Customer loyalty
Oliver (1995) describes customer loyalty as a deeply held commitment to re-buy or repatronise a preferred product/service consistently in the future, thereby causing repetitive same brand or same brand set purchasing, despite situational influences and marketing efforts having the potential to cause switching behaviours.

For one to know how loyal a customer is, you need to research more into the consumer’s sequence of purchase, the proportion of purchase devoted to a specific brand and the probability of a purchase.

Quantitative and qualitative measures can be used to measure loyalty. One researcher, however, said that there is more to brand loyalty than consistent buying of the same brand.

Attitude has been found to be a strong contributory factor. A view has been propelled which suggests that customers are willing to pay more because they perceive a unique value in a specific brand.

Cognitive loyalty
An interesting observation I made recently pointed on cognitive loyalty which has been viewed as a more superior level which seeks to involve the consumers’ conscious decision-making process in the evaluation of alternative brands before a purchase is made.

There is a high chance that your service contract would be renewed, less customers that change patronage and more customers that provide a positive word of mouth.

Other scholars have gone further to research on the two aspects of loyalty- true loyalty and spurious loyalty. Bloomer and Kasper concluded that true loyalty implies (in addition to repetitive purchasing) a true commitment to the brand.

True loyalty is bent on assessing consumer beliefs, feelings and intentions within the traditional consumer attitude. He further suggested that true loyalty only exists when brand attributes are preferred over comparable offerings and when the buyer has greater intention to purchase that brand and not the other alternatives available.

Managerial implications
One must try and build a strong emotional bond with customers through trust and service delivery. It’s not enough to have customers that are merely satisfied because they can easily switch over to your competitors.

It is important to not only fulfil and exceed a customers’ expectations, there is need to create that psychological attachment. If a customer feels a positive association, they can easily recommend it to the next person.

Services are generally purchased and consumed at the same time, they typically require direct human contact. The appropriate image must be communicated through the logos, graphic design, mission statements, and office layout.

A positive corporate image is achieved if employees are trained ad motivated.
It would be interesting to learn more on commitment, how it is achieved developed and maintained in relationship marketing.
Till next week, may God richly bless you.