Customer loyalty: rational, emotional and structural
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 loyalty 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 is the process aimed at the degree of bonding 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 Douwe Egberts coffee or Saint Marc cleaning agent for preparing a paint job.
Customer loyalty leads to customer loyalty. But what is needed for that? Stephen van Belleghem explains it briefly here, in his key note about 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 the 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 a little more, without charging any costs. That way you offer the better offer.
As an organization you can also commit yourself to a customer on a social and emotional level. The focus is on feeling and the way of communicating with customers. More intensive contact moments usually provide a positive experience around a brand or organization. This can improve you image lead. Central to this bond is attention to your customer. For example, think of a small surprise, a pleasant telephone conversation, being recognized when entering the store and thinking along from the customer's point of view.
Finally, there is the structural level. You improve the binding on a structural level by shaping the binding in subscriptions and contracts. The customer commits himself for a certain period of time, but so do you. You see this form of bonding especially in situations where parties are dependent on each other. In the B2B sector, for example, you see this much more, when servers and office equipment must always be available. In B2C, companies such as AH and Hema work with loyalty cards: if you keep shopping with them, you will get discounts and extras.
Research into customer loyalty
Harvard Business Review investigated the customer retention process. This research showed that no less than 30 percent of customers are convinced on a rational level. The other 70 percent of those surveyed were convinced on an emotional level by organizations. 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 immediately be considered a loyal customer. The same Harvard Business Review study showed that 20 percent of satisfied customers would easily switch to another party. Only when one of a very satisfied customer, one can classify this customer among the loyal customers. So to get really loyal customers, you really have to go the extra mile. You have to score with your customers on each of the three levels of customer loyalty: structural, emotional and rational.
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