Customer Loyalty The Basis for Long Term Profitability Not

1
Customer Loyalty

• The Basis for Long Term Profitability

2
Not All Customers Are Equal

• Treating customers as though they are all the
  same destroys profitability
• Segmentation is based on this fact.
• Steps
• First, sort by Customer Lifetime Value
• Second, sort by Needs

3
Three Types of Loyalty

• Brand Loyalty Customer Allegiance to a Specific
  Brand (Tide, BMW, Coke).
• Brand Equity Overtime a Particular Brand Builds
  Strength and Acquires Real Value (Hallmark, Radio
  Shack, Coke, Listerine)
• Customer Loyalty Process of Building Repeat
  Purchases and Positive Attitude.
  top-of-the-mind Awareness

4
Customer Retention

• Customer Loyalty consists of
• Retention (repeat buying)
• Important to Track Transactions
• Positive Attitude Toward Product/Firm
• Survey Customers to Assess Attitude

5
Relationship Between Customer Satisfaction and
Retention
6
Benefits of Loyalty

• Creates Virtual Cycle Among Customers, Employees,
  and Investors
• Increases Customer Spending, Referrals, Value and
  Reduces Operational Costs
• Fosters a Learning Relationship

7
Database Marketing and Customer Loyalty

• Database Marketing Method of Using Prospect and
  Customer Database Information to Initiate
  Consistent Communication to Convert Prospects and
  to Develop Repeat Customers
• It Targets Top Customers. Grows Good Customers
  into Top Ones

8
Developing a Loyalty Program

• Integrate Loyalty Efforts Into Existing Marketing
  Communications
• Ask Customers to Help
• Target Specific Messages to Specific Target
  Audiences
• Be Realistic
• Track Results and Build Database
• Consider Exit Strategies

9
Tracking the Success of a Loyalty Program

• Its Crucial to Track Results
• Before
• During
• After

10
Loyalty Program Examples

• Airline Frequent Flyer
• Hotel Frequent Visitors
• Discover Card
• Frequent Buyer
• Frequent Eater

11
Developing a Loyalty Program

• What factors actually build loyalty?