Customer Loyalty

Length: 893 words

Customer Relationship Marketing is best appreciated when viewed from an organisational perspective. There are companies such as Hewlett-Packard (2008) which actually has a personnel allocation for this. By looking at the job description, one could gain insights at some of the critical areas that need to be evaluated and improved if CRM is to be uplifted. The complete job title of this post at Hewlett-Packard is Relationship Marketing Manger for Retention and Loyalty.

His/Her main responsibility is oversight of all retention and loyalty programmes in the areas of development, evaluation, end-to-end execution, as well as for the improvement of these programmes. His/Her objective would be to increase the lifetime value of customers, as well as overall revenue and profit. It should be noted that the job of the manager also involves close association with owners of businesses and that the goal is to accomplish their programme objectives.

It is interesting to see that one principle that can be learned based on this: the success of the CRM officer would depend on the success of the businesses they engage with in terms of accomplishing their goals. There are four areas which the CRM Manager is actually directly responsible for: (1) Marketing Strategy and Planning,

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(2) Programme Execution and Analytics, (3) Targeting and Segmentation and (4) Channel Optimization.

The first involves setting measurable goals for retention and loyalty programmes with respect to the existing programmes, developing comprehensive strategies for marketing and promotion based on positive ROI, and develop and test new programmes while maintaining and optimizing current programmes. The second responsibility has something to do with retention and loyalty programmes, as far as end-to-end execution is concerned. Emails, direct mail and on site advertisements would also be utilized in executing integrated programmes as a result of collaboration with different channel owners.

Moreover, he/she would also be responsible for the analysis of the results of any promotions as well as for the development of test agenda and campaign promotional calendar. The third area is concerned with driving segmentation and targeting strategies for retention and loyalty programmes. The manager will also lead main analytical and modeling projects in partnership with analytical teams inside the company. Current segmentation and targeting capabilities, competition and market trends will also be the concern of this personnel, as well as making recommendation for the improving technology.

Finally, the fourth area involves internal and external creative teams in order to promote retention and loyalty programmes through all available marketing channels. Moreover, he/she is also expected to maintain annual catalog as well as keep up with the latest trends and developments in the area of channel optimization and ROI. Customer loyalty, as discussed in Sections 2. 1 and 2. 2, is indeed a very important factor in evaluating customer relationship marketing. According to Dick and Basu (1994), it refers to the potency of an individual’s relative attitude in relation to its repeat patronage.

This relationship is affected by social norms and situational factors. Moreover, consequences in line with motivation, perception and behaviour, as well as cognitive, affective and conative background of relative attitude all have effects on loyalty. Moreover, congruence in terms of the social and ideal images have indirect effect of loyalty and direct effect on their satisfaction. (Back 2005) There are other factors affecting loyalty – belief, affect, intention, and action and this was framed as a four-stage model by Oliver (1997, cited in Muenster & Wunderlich , 2006).

Also, Clark and Maher (2007) there is an expected 60% variance in attitudinal loyalty in terms of trust, satisfaction, commitment, value, and past behaviour, suggesting that customers must be segmented based on the frequency of their visits. Finally, to prevent customers from switching, the quality of the product, costs of switching, and the present demand for products and services for the energy supplier should also be considered as they are important determinants. (Wieringa, J. & Verhoef, P. 2007)

All Business (2008) suggest ten ways on how to build loyalty. The first is communicate. This can be effectively done by providing monthly email newsletter, flier, reminder, greeting card or any other means to appreciate steady customers. Customer service is second. This means that the management should train staff to do a little extra to meet customers needs. It also means treating them well. Third would be employee loyalty. The management should be loyal to employees so that they would have a positive feeling towards their jobs.

Employee training is fourth. Employees should be empowered to decide for the benefit of customers by providing them the necessary training in interfacing with customers. Fifth would be customer incentives. In the case of the hotel for instance, new members of the HHonors Club may be given one free night in recognition of their continued patronage. Product awareness is sixth. Products which regular customers usually buy should be complimented with other products or services. Seventh is reliability. What ever commitment given to customers must be fulfilled.

If, for any reason, this cannot be fulfilled, customer should be advised right away and compensation. Flexibility is eight. Problems or complaints of customers must be resolved to the best of the staff’s ability. “That’s our policy” would simply not do. Ninth is people over technology. If customers are given hard time to speak to a human being when problems arise, the higher is the probability of losing customers. Finally, tenth is to know their names. By knowing them, customers feel that they are valued.

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