BU412 Chapter Notes - Chapter 12: Relationship Marketing, Data Integration, Loyalty Program
Document Summary
Targeting, acquiring, and retaining the right customers is at the core of many successful service firms. The objective is to build relationships and to develop loyal customers who will do a growing volume of business with the firm in the future. Loyalty in a business context describes a customer"s willingness to continue buying from a firm over the long term and recommending the firm"s products to friends and associates. Customer loyalty does not refer to customer behaviour. It also includes preference, liking, and future intentions. Why is customer loyalty so important to a firm"s profitability. The longer customers remain with a firm the more profitable they become. Four factors that cause customer loyalty to grow: profit derived from increased purchases, profit from reduced operating costs, profit from referrals to other customers, profit from price premium. Loyal customers are not always more profitable than those who make one-time transactions.
