Customer loyalty can be defined as a demonstrable and positive state of unselfish commitment and trust towards a specific service provider as a result of the evident and consistent satisfactory service levels it has provided to its customers, and can lead to repeat purchases or a lasting relationship. It also includes actions like positive word-of-mouth references and influencing their friends to support the same service provider.
Benefits of Customer Loyalty
Cost saving –
They are familiar with the brand and know how to transact with the organization. They also use the resources more efficiently.
They mention their preferred brand to their friends and associates (also called word-of-mouth)
Complain rather than defect –
Customer will give the organization a second chance in case of a service failure and report it. Customer might even offer advice on how to prevent a recurrence of the problem. This is an extremely valuable early warning system and should never be ignored or detested, but always welcomed. It provides an opportunity to rectify a problem that could have led to several customers terminating their relationships if it was not reported and identified.
Channel migration –
They are more likely to buy through alternative channels from their preferred brand (like the Internet). refer to this as a seamless customer experience. They state that an organization must first understand the customers‘ level of brand loyalty and how much brand equity they have in the marketplace.
Unaided awareness –
Loyal customers are more likely to have their preferred brand top of their minds. This is what any organization should strive to achieve, as it illustrates a very high level of satisfaction, loyalty and awareness.
Greater awareness of band assets –
They are more aware of the auxiliary benefits or hidden assets.
it is clear that the creation of custom. it is clear that the creation of customer loyalty can not be considered as a luxury, but as a mutually-beneficial instrument on several levels. It is important to comprehend the cost-saving-benefits at several levels, including the principle that it is cheaper to retain existing customers than to recruit new ones.