In the last module, we discussed about the Wheel of Loyalty.
Under its second strategy of creating Loyalty Bonds, we covered two sub-themes, viz deepen the relationship and give loyalty rewards.
Today, we'll start with the next sub-theme; build higher-level bonds.
BUILD HIGHER-LEVEL BONDS
One objective of loyalty rewards is to motivate customers to combine their purchases with one provider or at least make it the preferred provider.
However, reward-based loyalty programs are quite easy for other suppliers to copy, and they rarely provide a sustained competitive advantage.
Incontrast, higher-level bonds tend to offer a more sustained competitive advantage.
Customization Bonds: These Bonds are built when the service provider succeeds in providing customized service to its loyal employees.
Structural Bonds: They are created by getting customers to align their way of doing this with the supplier’s own process, thus linking the customers to the firm.
Social Bonds: Based on personal relationship between providers and customers
Churn Diagnostics: To gain a better understanding of why customer defect
ENABLERS OF CUSTOMER LOYALTY STRATEGIES
Most strategies discussed in the Wheel of Loyalty require an in-depth understanding of its customers to actively improve theirloyalty.
Enablers of customer loyalty strategies provide this understanding and include the creation of “membership-type” of relationships such as
through loyalty programs and CRM systems,
account managers, and
Transaction is an event during which an exchange of value takes place between two parties
Membership Relationship is a formalized relationship between the firm and an identifiable customer, which often provides special benefits to both parties.
CUSTOMER RELATIONSHIP MANAGEMENT (CRM)
Service marketers have understood for some time the power of CRM, and certain industries have applied it for decades.
However, mention CRM and immediately, costly and complex information technology (IT) systems and infrastructure come to mind.
But CRM actually signifies the whole process b which relations with the customers are built and maintained.
It should be seen as an enabler of the successful implementation of the Wheel of Loyalty.
Many elements are involved in gaining market share, increasing share-of-wallet, and cross-selling other products and services to existing customers, and creating long-term loyalty.
CRM is a key enabler for the strategies discussed in the Wheel of Loyalty and is often integrated with loyalty programs.
Loyalty programs help to create membership-type relationships with customers even in transaction-type businesses, which, together with effective CRM systems, enable marketers to track the behavior of high-value customers.
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