Customer Loyalty Essay

Submitted By gusrobinson
Words: 1505
Pages: 7

Recently, the ‘customer loyalty’ approach to marketing has become a huge part of strategic

management, especially in the hope of increasing positive attitudes when associating brand

recognition with products and/or services. Customer loyalty is well described as the level of

continuity in the customer’s relationship with a brand or service provider (Soderlund, 2006).

Many businesses are increasing their customer research in order to determine whether

or not they have a high percentage of long term customers, or customers that would

recommend the brand to others. In order to understand what the customers are feeling a

measurement of customer satisfaction is required and these measurements of loyalty are

put in place. Furthermore, there are many predictors or factors that help explain ‘loyalty’

and customer satisfaction experienced throughout all customer relationships. Many

practitioners have researched the field from many perspectives, including the differences

in loyalty across cultures, such as the comparison of Caucasian and Chinese banking

within Canada, Australia and Asia (Bauman, Hamin & Tung 2012), to ensure businesses

are reaching all potential markets. Academic journals and studies allow us to broaden our

understanding and allow us to explore further avenues of investigation and research. But

before enveloping one’s mind into the thoughts and processes linked with customer loyalty

one must fully understand loyalty within businesses.

As customer loyalty is the relationship between consumer and company, it becomes

a necessity to ensure it can be properly controlled and monitored. A loyal customer is

a ‘returning customer’, someone who shall frequently use a product or service based on

previous experiences. Customer loyalty can be measured in many different ways, gaining

both quantitative and qualitative data with the use of Surveys, Questionnaires, interviews

and focus groups that can all be helpful in understanding consumer’s needs, wants or

feelings toward the service/product provided. In the case of Baumann, Burton and Elliot

in 2005, a survey was used to develop an understanding for the percentage of business

a company receives from certain customers. This reflects the customer’s share of wallet,

abbreviated to SOW. Simple survey questions shall allow for an understanding of customer

relations, which can be based on customer satisfaction. Understanding repeat business

or referral business can be extrapolated via a numbering system from 1, being ‘Strongly

Disagree’ and 10 being ‘Strongly Agree’. This allows for numerical data to explain the trends

of the customer loyalty-satisfaction relationship (Kavitha and Palanivelu 2012). This data

can then establish predictors of loyalty, such as relationship quality, overall satisfaction, and

service quality. Simple questions such as, “Would you recommend this product/service to

a friend” can determine how loyal a customer is. It is important when measuring customer

loyalty that the sampling for the study, depending on desired results, reflects all customers,

based on age, gender, ethnicity and income. A large amount of studies show, satisfaction is

a leading contributor to customer loyalty (Baumann, Burton and Elliot 2005).

It can be seen that daily operations are very different in Australia compared to a western

culture such as America, even with the obvious similarities. This is increasingly more evident

when comparing Australia to eastern cultures, such as China or India. With the world

becoming as a “Global Village” (Baumann, Hamin & Tung 2012), it is important to realise in

all businesses, it is necessary to adapt to the many surrounding cultures in order to excel.

In regards to customer loyalty a company must ensure its presence throughout the market,

with customers of different age, sex, and