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CUSTOMER LOYALTY

CUSTOMER LOYALTY. Britannia to offer £40m loyalty bonus. CUSTOMER LOYALTY CARDS. Components of a loyalty system. The right customers Lifetime products and services Loyal employees Measures of loyalty. The Service-Profit Chain. Operating Strategy and Service Delivery System.

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CUSTOMER LOYALTY

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  1. CUSTOMER LOYALTY

  2. Britannia to offer £40m loyalty bonus CUSTOMER LOYALTY CARDS

  3. Components of a loyalty system • The right customers • Lifetime products and services • Loyal employees • Measures of loyalty

  4. The Service-Profit Chain Operating Strategy and Service Delivery System EmployeeRetention Revenue Growth Internal Service Quality Employee Satisfaction External Service Value Customer Satisfaction Customer Loyalty Employee Productivity Profitability • retention • repeat business • referral • workspace design • job design • employee selection & development • employee rewards and recognition • tools for serving customers • service concept results for customers • service designed and delivered to meet targeted customers’ needs

  5. The Heskett-scheme Apostles 100 % Zone of affection 80 % Hostages 60 % Zone of indifference Loyalty (Retention) -- monopoly __ normal competition 40 % Mercenaries Zone of defection Terrorists 20 % Indifferents 1 extremely dissatisfied 2 somewhat dissatisfied 3 slightly dissatisfied 4 satisfied 5 very satisfied Satisfaction Measure

  6. The Virtuous Circle of Loyalty Deliver Superior Value Continuous investment in hard-to-match capabilities Increase customer satisfaction Demonstrate trustworthiness Increase customer loyalty Tighten connections

  7. When are loyalty programs successful? • Use rewards to strengthen the value proposition • Change customer behaviour • Learn more about your customer: the learning relationship

  8. The Relationship Spectrum Transactional exchanges Value-adding exchanges Collaborative exchanges Anonymous transactions/ Automated purchasing Complete collaboration and integration of supplier with customer or channel partner

  9. Devising a Relationship Strategy Understand the sources and consequences of customer retention “What is loyalty?” Identify the reasons for defections “Why do customers switch?” Select the customers to retain “Which customers are valuable?” Design programs to enhance the value proposition and create barriers to imitation “How can we gain an advantage?” Align the organisation to retention as a top priority How will we implement the strategy?” Monitor performance and collect feedback for continuous improvement programs “How are we doing?”

  10. The Price of Loyalty • The programs are expensive • Loyalty programs take on a life of their own once they start • Despite their number and apparent popularity with customers, these programs often fail to increase customers’ loyalty

  11. Loyalty and customer satisfaction • Satisfied customers will spread the word • Service is the key to customer loyalty • Customer service beyond the sale • Make a difference with an extra-special touch

  12. Loyalty and customer satisfaction • Know your products • What your customers want Discover customers' buying styles

  13. Loyalty and customer satisfaction Not all satisfied customers stay with their supplier Solution: go beyond customer satisfaction Develop the rapport that will make that your customers adore you.

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