Building Customer Loyalty is all about creating a personal bond with your customers, this bond helps you escape the commodity pricing wars and retain your customers in the face of competitiveness.

Customer loyalty is both an attitudinal and behavioral tendency to favor one brand over all others, whether due to satisfaction with the product or service, its convenience or performance, or simply familiarity and comfort with the brand. 

In order to achieve customer loyalty, you just need to follow the Customer Loyalty Cycle which involves three stages.

Customer Loyalty Cycle
Customer Loyalty is a continuous process

1. Attract: You attract new customers by offering a unique value. To do this you must have an idea of the competitiveness within your industry. And thus, your unique service proposition (USP) will stand you out and offer you a competitive advantage. Customers are already bored with the usual varieties and they would be attracted to whoever offer the “unique”. It is not difficult to make a unique offer; you just need to discover the unmet needs. The uniqueness may be fairness in pricing, superior quality or accessibility.

2. Delight: This is the stage where customer satisfaction is required. This is achieved with a unique delivery. Unique delivery entails speedy turn-around time, conducive environment, delightful packaging, interesting engagement, and quality delivery. If you mess up the first chance, you have lost the opportunity to retain the customer. If your door slams back on customers and you don’t have personnel to open the door for walk-in customers, this may amount to inconvenience – an awkward experience which wards off customers. If your toilets stinks and the WC does not flush easily, that is enough to send customers away.

3. Retain: This is the third stage of customer loyalty cycle, where you need to retain the customer. Yes, it is a deliberate effort!  To achieve this, we shall explore Relationship Marketing (RM) and Switching Cost (SC). What do they really mean?

Relationship Marketing (RM) are marketing activities aimed at developing trust with customers rather than interest; and developing and managing long-term relationships rather than transactions. Relationship marketing is attracting, maintaining and – in multi service organizations – enhancing customer relationships.

Relationship Marketing and Profitability
Relationship Marketing is both internal and external. Staff as well as customers must be satisfied

Roles of RM

  1. Protects Emotional Well being of Customers
  2. Understands customer psyche
  3. Builds Trust with Customer
  4. Gets Customer Attention
  5. Relationship technology such as CRM software
  6. Builds partnering
  7. Moment of Truth

Switching barriers or switching costs are terms used in microeconomics, strategic management, and marketing to describe any impediment to a customer’s changing of suppliers. It is:

  1. The cost that will be incurred by a customer if he/she defects to another brand.
  2. The benefits that a customer will lose if he/she defects to another brand.

The most easily understood example of Switching Cost model may be the Wifi Router. Once you purchase a particular brand of Wifi Router, you keep subscribing on the router whether you like the internet service or not. This is because you do not want to be on the losing side, as you have already invested in the router. Another example of switching cost model is the HP printer – once you have the printer, you keep buying HP ink. You cannot easily switch to another brand of ink. However, Switching Cost Model does not help a bad product and does not cover for bad customer service. The customer is King and can always choose from many other options available to avoid poor service delivery.