Table of Contents
2.1 Loyalty in Customer Relationship Management4
2.2 Benefits of loyalty4
2.3 Customer loyalty programs and costs5
It has been agreed from marketers all over the world that new customer gaining alone won’t ensure long lasting success, it will need to be balanced by customer retaining and development. Customer relationship management, customer relationship optimization, frequency marketing, customer loyalty programs and retention marketing are some of the factors that will help in keeping customers longer and the objective of these factors is to build Loyalty. Loyalty ultimately generates activist and noticeable financial results and it is how a customer feels about a certain brand. A considered objective for nearly all companies is the improvement of customer loyalty (Duffy 2003:480). Segment, grow, identify, and retain existing customers by cooperating and providing them a desired performance is the worldwide aim of loyalty marketing (Credit union executive newsletter 2003:4). At the end, deciding to built loyalty program in the company it whether form it’s own loyalty system or makes agreement with a loyalty program trader and there are some values to be aware of during the process of forming the system. It should be built upon the same business values, basic business benefits that company provides to its customers. Modesty and directness are the basic steps that customer loyalty system should follow so the customer could recognize and relate to the incentive as well as being able to obtain these rewards without unnecessary effort and time (Erbschole 2009:3). Three Points will be discussed in this paper, which are: 1-Loyalty in customer relationship management, 2-Benefits of loyalty, and 3-Customer loyalty programs and costs affecting them.
2. Literature Review
2.1 Loyalty in Customer Relationship Management
In order to increase customer loyalty, companies were looking for a tool that would help, and that tool was Customer relationship management (CRM). Assisting marketing programs, handling sales calls more efficiently, and better analyzing the documents of a customer are the various purposes of CRM technologies to provide customers customized service or product. Many efforts and searches are made by the companies to continuously search for ways to satisfy the customer therefore collecting information about the customer in order to analyze trends and that would help to deliver valuable information about customer habits and preferences. Personalized, custom-made services or products was shown to increase value for the customer and can lead to superior loyalty if the company guaranteed to do business on the customer standards. CRM helps in collecting the data of customer and that helps company do customized products that may lead to true loyalty, which is the state where customers may never consider supplementary choices and may stay with the company despite any transformations of the factors as the price. (Wetsch 2005:30-33; Research starters business 2003: 1)
2.2 Benefits of loyalty
There are several benefits for loyalty that CRM helps the company obtain, and these benefits will surely have a great positive effect on the company and some of these effects are channel migration, unaided awareness, referrals, cost savings, complain rather than defect, turn left than turn right and great awareness of brand assets. Only four of these benefits will be discussed in this paper and they are: * First, Referrals, Loyal customers will not hesitate to make suggestions to friends and acquaintances as they become aware with your product so they will start mentioning it to friends and family.
* Second, Complain rather defect, loyal customers feel like they are stakeholders so they start complaining when they are unpleased...