Drivers of Customer Loyalty

It is very important for an organization to identify the factors and facets which drive customer loyalty. These factors help the organization to manage customer loyalty in a better and efficient way. Following are the drivers of customer loyalty:

  1. Attitude: A customer to bear on his loyalty can have following types of attitude:

    a. Emotional and sentimental- Some customers stick to a particular supplier due to the emotional and sentimental attachments with that supplier. This attachment may be due to the physical location of the supplier, product pattern provided by the supplier that exactly suits customer or may be due to the esteemed assistance and services provided by him. This type of bonding enhances customer loyalty and it is very difficult to break this bonding under any circumstances.
    b. Rational Type- Such type of customer makes purchase decision rationally. Before making any purchase they evaluate the suppliers and assess the profitability criteria.
    c. Entrepreneur Type- These types of customers have a habit to try new options. Their decision to choose supplier is normally irrational and can change their loyalty to other suppliers even if they are satisfied with existing customers. It’s difficult for the supplier to retain or manage these types of customers as no situation could bind them.

  2. Product and services: Following are the important aspects of product and services that could substantially help in retaining loyalty of customers.

    a. Differentiated Products and Services- Differentiation in products and services help the organization to reduce competition in market and have substantial influence on customers’ mindset.
    b. Multiple Products for the same customer- By manufacturing multiple products for the same customer enhances the relationship with customer which increases loyalty. If the customer is loyal towards any one brand then there are good chances to retain his loyalty for whole range of brands.
    c. High Service Component- The products having a high service component captures more customer loyalty. This is because the customer does not want to experiment with other products provided by different supplier. Hence they become loyal to the existing customer due to the provision of high service components.

  3. Technology: The technological aspects of product manufactured by the supplier plays a vital role in customer loyalty. The more products are technologically sound, more is the loyalty.

  4. Human Resources: Organizational human resource plays a vital role in marketing segments where customer comes in direct contact. In some consumer sectors like household and automobiles, the customer gets a chance to evaluate capability of organizational human assets. If the customer evaluates these human assets as useful and is influenced by the aspects then he develops a positive feeling against the supplier who posses these enhanced human assets.

  5. Supplier’s Culture: Supplier’s culture is most important driver of customer loyalty. In consumer sector this culture means quality and in core sector it can be related to technology. For example, in US ‘Friedrich’ has ranked with good quality, enhanced design and user friendly features which have created brand loyalty. In Indian the supplier of almost all the dairy product called ‘Amul’ has pursued customer loyalty because of their overall culture. In core sector the image of the supplier is the biggest driver of loyalty. This image could add a status symbol for most of the customers. ‘Mercedes’ automobiles and ‘RayBan’ sun-glasses are example of this. The customers uses these products only for maintaining or enhancing their lifestyle and always be loyal to them.

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Customer Relationship Management