Buying loyalty VS. building commitment developing

Date of publication: June 15, 1997

Author: Trevor Richards

Abstract:

The paper examines the role of customer loyalty in maximising opportunity, and will argue that loyalty, as measured by customer spending, is simply a reflection of short-term behaviour and can only be sustained by one of two routes: building the customer relationship with the brand; and “buying” sustained loyalty through price and/or promotions. In order to build sustained loyalty it is necessary to first build brand commitment, a precursor (and hence predictor) of loyalty. In order to maximise the return from customers it is necessary to obtain a clear understanding of customers’ relationship with the retail brand and the degree of their involvement in the shopping process. The findings also illustrate the importance of understanding which segments offer the most potential value to the retailer: particularly where different marketing strategies might be needed for different segments. Only by understanding the dynamics of the market in this way can it be possible to effectively prioritise marketing expenditure.

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