Ever since the man has become civilized, there has been a market which caters to all his basic needs. However, gradually the human beings have started refining their emotionally driven wants and demands. This prompted the sellers to implement a proper thinking pattern while selling or manufacturing a product. Earlier the focus was mainly the product but the times have changed now. The new word is customer. Many companies in the past decade have really started focusing on their customers by implementing one or the other program of customer relationship management (CRM). Every firm now has a properly established customer loyalty program. These schemes can now be evident in almost all the business segments varying from retail, airlines, banks, automobiles to telecommunications, educational institutions and fashion outlets.
These loyalty programs’ major aim is to increase the sales by increasing the usage levels and raising the variety of goods purchased from the suppliers. This one is a bullish approach. They do have a defensive aim as well which is to build a strong and close relationship between the product or brand and the present customers. This helps in retaining and maintaining a good solid consumer base. However, loyalty programs also concentrate on other areas like cross selling, preparing data base, assisting brand PR etc.
In a layman’s business language, loyalty is a trait, which is showcased by consumers towards brands, services, activities, and categorized products. This research keeps aside the brand loyalty and focuses on customer loyalty which implies loyalty is a human feature or a notion and is not affected by a brand. Though, there isn’t any proper definition of customer loyalty but there are three models which are widely accepted. These are:
- Loyalty is an attitude which sometimes builds a relationship with the brand. It has often been argued that a strong “attitudinal commitment” towards a brand has to be there to make sure the true loyalty exists. It’s a set of consistent beliefs which a consumer has developed towards a brand over a period of time. These attitudes can be gauged by interviewing people on their liking and commitment towards a brand, whether they feel positively about it and if they would recommend that brand to others. This all will be in comparison with rival brands. The value if these attitudes reveal the chances of the brand’s sale and repeat purchases. This theory holds some substance and is quite profitable. Attitude driven customers don’t get strayed by the negative publicity of a brand and are less prone to depressing information about their product.
- Loyalty mainly expressed in terms of revealed behavior. This theory is quite controversial as it defines loyalty on the basis of past purchases without measuring the consumers’ commitment towards a brand. Through an extensive research it has been observed that only a few consumers are “monogamous” (100% loyal) or promiscuous (not loyal to any brand). Infact, most customers are “polygamous” (loyal to a range of brands in a product category). Loyalty to the brand is gauged by repeat purchases. It is mainly because of the ongoing satisfaction which often results in frail commitment. Consumers buy the same brand every time largely due to the lack of time for looking for alternatives. Though this type of approach is best supported by data but people who follow attitude driven and relationship approach would not subscribe to such behavior.
- Buying moderated by the individual’s characteristics, circumstances, and/or the purchase situation: This is also called contingency approach which states that it would be the best practice to measure the individual’s current circumstances, their traits or the purchase situation. These variables play a starting and an important role in measuring the consumer behavioral pattern. This helps in predicting the future purchases by bringing together repeated satisfaction and frail commitment along with several relevant contingency variables.
All these models have been tested on varying samples and have proved to be successful, however, there isn’t a guarantee that all the components would work for sure. This is due to the fact that while the businesses are growing, the customer is also going through an evolution. Hence, companies now need to go through some brain storming and try to find a solution which will at least cater to a particular section of society, if not all and hence wow the consumer.