Companies try to retain existing customers for their organization in different ways. We call this process customer loyalty. It is a loyalty strategy that is not only aimed at retaining customers, but also at increasing their spending. This customer loyalty can be worked on at three levels: emotional, rational and structural. Improving customer loyalty reduces the chance of a customer switching to a competitor and price playing a significantly smaller role. Customer loyalty ensures brand preference.
What is customer loyalty?
Customer loyalty is the lolyality strategy aimed at retaining customers and increasing customer spending. The goal is to create a preference for the brand.
There is an important difference between B2B and B2C customer loyalty. Bee B2B customer loyalty the process is aimed at the degree of connection with your organization by a customer. In the case of B2C customer loyalty, the focus is more on the preference for specific products, such as, for example, Douwe Egberts coffee or Saint Marc detergent for preparing a paint job.
Customer loyalty leads to customer loyalty. But what is needed for that? Stephen van Belleghem briefly explains this in his key note on extreme customer focus:
Three different levels of customer loyalty
Customer loyalty is a process that can be influenced by organizations at different levels. We speak of a rational, emotional and structural level. At a rational level, it is about creating financial benefits for a customer. By offering additional services or by giving a discount, the chance of a positive response will be increased. Offer the customer just that little bit more, without charging any costs. This offers you the better offer.
Also on a social and emotional level you can commit yourself as an organization to a customer. The focus is on feeling and the way in which you communicate with customers. More intensive contact moments usually ensure a positive experience around a brand or organization. This can improve you image lead. Central to this bond is attention for your customer. Consider for example a small surprise, a pleasant telephone conversation, being recognized upon entering the store and thinking along with the customer.
Finally, there is the structural level. You improve bonding at a structural level by giving form to subscriptions and contracts. The customer is committed to this for a certain time, but so are you. You see this form of bonding especially in situations where parties are interdependent. You see this much more in the B2B sector, for example, when servers and office equipment must always be available. In B2C, companies such as AH and Hema work with loyalty cards: if you just keep shopping with them, you get discounts and extras.
Research into customer loyalty
Harvard Business Review investigated the process of customer loyalty. This research showed that no less than 30 percent of customers are convinced at a rational level. The remaining 70 percent of respondents were convinced by organizations on an emotional level. It is therefore advisable for organizations to focus on the emotional bond they have with customers. In this way they can strengthen customer loyalty. This prevents customers from switching to a competitor.
Customer satisfaction is not customer loyalty
Keep in mind that a satisfied customer cannot be considered directly as a loyal customer. The same study by Harvard Business Review showed that 20 percent of satisfied customers would easily switch to another party. Only when one of one very satisfied customer speaks, one can classify this customer among loyal customers. To really get loyal customers, you really have to make those extra meters. At each of the three levels of customer loyalty you must score with your customers: structural, emotional and rational.
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