Towards achieving consumer loyalty

2.3.1. Does my company need it?

As discussed above, implementing a customer loyalty strategy can bring benefits for companies. Especially in the following three cases, companies should adopt customer loyalty strategy so that obtain more advantages. (Nykamp, 2001)

Case1. Competitive differentiation suggests that it is difficult to compete in the business world on any other basis. For instance, when product, price, promotion strategy, and place of distribution can all be matched or bettered by competitors; or in some industries where the price of entry is high, you may not have the upper hand on one of these factors.

Case2. Heightened customer expectations are also difficult to ignore. The innovations quickly become the norm, and the barrier continues to be raised for those who seek to compete. For instance, those who maintain the status will find that they are increasingly disappointing their customer, as well as failing to attract new customer.

Case3. Adopting new technology, for example, the Internet, databases, analysis engines, make implementing of customer loyalty strategy easier and with more efficiency. More and more companies or organizations will implement customer loyalty strategy and these tools. Those companies that don’t adopt those tools will fall behind its competitors.

According to Nykamp’s (2001) book, successfully implementing customer loyalty strategy have two key points. First, companies should recognize the potential value of current customer relationship. Second, companies should identify more opportunities to meet customers’ need. In this case, companies tend to be tied more closely with customers. In addition, customers view companies as trustworthy providers. In Duffy’s (2003) article, there are two factors that have impact on customer loyalty strategy to be mentioned. The first is High involvement. It has impact on customers’ choice and continuance on a brand. Before analyzing loyalty, companies must understand what facilitates the beginning of the relationship. Determine the extent to which the choice is a high involvement decision (Duffy, 2003). Moreover, when continuing to utilize a brand customers there will be habit. It can keep customer from defect. High involvement will make the habit stronger. The second is bad service experience. Deal with the factor correctly can bring companies valuable experience when dealing with customer relationship. Otherwise, customers may defect from companies or give up the brand (Duffy, 2003).