driving customer loyalty recovered]

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DRIVING CUSTOMERLOYALTY

Six Myths

Submitted to:- Submitted by:- Varun GuptaMBA-1st Sem.

Sec-A


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Though companies consider customer loyalty crucial totheir marketing plans, they often focus on low-valuemeasures that do not provide significant competitiveadvantage.

Reality

Facts

Action Steps

Source: HT MINT


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1. A satisfied customer is a loyalcustomer

Most companies use the terms customer loyalty and satisfactioninterchangeably. In reality, satisfaction is not the same as loyalty andfocusing on drivers of satisfaction can be misleading for your loyaltyplans

Satisfied customers often switch when competitive offers

emerge or switching costs decrease. Not surprising, given

that satisfaction and loyalty show very little correlation.

First understand the drivers of loyalty, which could be very different

from drivers of satisfaction. Loyalty is an attitude that leads a customer

to consistently repurchase, increase spending and recommend yourbrand.


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SATISFACTION VERSUSLOYALTY

H

L H

Source : Marketing leadership council loyalty survey


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2.Loyalty efforts help you retainbusiness, not acquire new business

Loyalty efforts can support revenue growth through their impact onportfolio penetration, new product adoption and share of walletgrowth. This requires marketers to go beyond their preferred approachof merely eliminating issues that cause customer dissatisfaction.

Nearly three-fourths of customer experience investments are skewedtowards eliminating customer dissatisfiers as these are easier toidentify, justify expense and act on.

To leverage loyalty efforts for growth, you need to shift focus to

increasing loyalty (and not just reducing disloyalty) by creating

momentsof delight in customer experience and working with the objective of

increasing the likelihood of preference (instead of merely reducingrejecters).


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3.Loyalty efforts should focus on theattributes that

customers say are most important

Customers usually consider the functional attributes of aproduct more important, but emotional attributes are muchmore important in driving loyalty.

The ability of a brand to differentiate itself on emotionalattributes can lead to a 60% greater impact on loyalty.

High-loyalty brands deliberately over-invest in emotional

attributes. To achieve emotional differentiation, high-loyaltybrands identify those

emotional attributes"shared values"they can own.


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CT OF FUNCTIONAL AND EMOTIONAL DIFFERENTIA



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4. Enrolling a customer in a loyaltyprogramme

will result in loyaltyImprovements in loyalty from loyalty programmes are

fleeting unless programmes can be made exclusive

Marketeers can expect to see a 6% positive boost in

loyalty from programme membership. However, thepositive effects wear off as consumers join competitiveprogrammes

Rather than focus on programme penetration, lean

towards programme exclusivity. Concentrate on acquiringcategory entrants and stealingnot sharingprogrammemembers


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IMPACT ON LOYALTY



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5. Developing personal relationshipswith customers is the best way for

sales to drive loyaltyThe true potential of sales interactions is in leading the

customer to learn something new, as this has the greatestimpact on customer loyalty.

The traditional role of sales representativesdevelopingdeeper relationships with customers and responding well totheir requestsactually has very little impact on developingloyalty. These attributes contribute to just about 1% impacton loyalty. Teaching customers about the category hassignificantly higher impact (nearly 8% impact on loyalty).

Do not underestimate the power of the sales interaction todrive customer loyalty. Equip your sales representative toteach customers and not just serve or sell to them.


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Loyalty impact from differentsales attributes



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6. Employees who dont face customerscannot

affect customer loyalty

Marketing usually sees itself as the sole guardian of loyalty initiativesand thus rarely involves other line functions in loyalty programmes.Involving other functions can not only drive loyalty, but also result inother benefits

Empowering employees who dont face customers not only improved

loyalty scores but also enhanced employee satisfaction scores by 14percentage points for a leading company.

Marketers should view their role as facilitators of customer loyaltyactivities in the organization and equip colleagues from other functionsto contribute to the process. Systematic customer immersion

programmes that enable staff to gain first-hand knowledge of acustomers experience can sensitize employees who dont facecustomers to the impact on customer loyalty, enabling improvementsin previously undervalued internal processes.


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EMPLOYEE SATISFACTIONSURVEY

Do you believe you are empowered

to satisfy the customer?

Are you executing this to

your satisfaction?



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driving customer loyalty recovered]

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