Brand Customer Relationship

Brand Loyalty and Customer

Loyalty, Loyalty Segmentation,
Concept of Relationship Marketing
 Customer loyalty defined
Customer’s commitment or attachment to a
brand, store, manufacturer, service
provider, or other entity.
• A behavior toward the product
• An attitude to behave
 Customer Loyalty Ladder

Advocate

• Suspect Client
• Prospect
• Customer Customer

• Client Prospect

• Advocate
Suspect

*One Stop Marketing by Jonathan Trivers

 Customer Loyalty Ladder
• Suspect
Anyone who reads or hears an ad, looks at a brochure
or encounters some other type of promotion is a suspect
• Prospect
Someone who pays attention to your promotion

• Customers
Those who buy your product or service
• Client
A customer who buys a second time

• Advocate
A customer who gives unpaid advertising for the
products or services of a business
 Perceived Value

Defined by your customers

What is a Loyal Customer
Worth?
What affects customer loyalty
Guidelines for enhancing loyalty
 Relationship Marketing
• Premise of relationship marketing: current
customers are the key to long –term brand
success.
• Benefits of relationship marketing
– Acquiring new customers can cost five times as much
as satisfying and retaining current customers.
– The average company loses 10% of its customers each
year.
– A 5% reduction in the customer defection rate can
increase profits by 25% to 85%, depending on the
industry.
– The customer profit rate tends to increase over the life
of the retained customer.
 Important Benefits

1. Increased purchases
2. Reduced costs
3. Free advertising through word of mouth
4. Employee retention
5. Lifetime value of retained customer
 Issues in Relationship Marketing

Mass Customization Aftermarketing

Loyalty Programs
 Mass Customization
– Making products to fit the customer’s exact
specifications.
– The advent of digital- age technology enables
companies to offer customized products on a
previously unheard-of scale.
– Example, Dell’s built-to-order computers, sold
directly by the company on the internet or over
the phone, helped make it the most successful
computer manufacturer of the 1990s.
– The NikeiD program enables customers to affix
an eight character personal ID to their creation.
 Mass customization

• Supply-side benefits of mass

customization\
– Retailers can reduce inventory
– Saving of warehouse space
– Saving the expense of keeping a track of
everything and discounting leftover
merchandise.
• Mass customization is not restricted to
products.
 Aftermarketing

– Those marketing activities that occur after

customer purchase.
– To enhance consumers’ consumption
experiences, marketers must develop user
manuals that clearly describe both what the
product can do for consumers and how
consumers can realize these product benefits.
– Aftermarketing can include the sale of
complementary products to make up a system
or in any other way enhance the value of the
core product.
 Seven Aftermarketing Activities
1. Establishing and maintaining a customer
information file
2. “blueprinting” customer contacts
3. Analyzing customer feedback
4. Conducting customer satisfaction surveys
5. Formulating and managing
communication programs
6. Hosting special customer events and
programs
7. Identifying and reclaiming lost customers
 Loyalty Programs
• Also known as frequency programs
• Identifying, maintaining and increasing the yield from
a firm’s ‘best’ customers through long-term,
interactive, value-added relationships.
• Loyalty programs include:
– Specialized services, newsletters, premiums, and
incentives.
– Often these programs include extensive co-
branding arrangements.
Tips for building effective loyalty programs

Know your Change is good

audience

Engage people
Listen to your best
customers
Overview: Segmentation, Targeting &
Positioning

Why do this?
 Market Segmentation -
Principles
• Segmentation Variables
– Geographic
– Demographic
– Psychographic
– Behavioral
– Other (anything!)
• No single best way to segment a market.
• Often best to combine variables and identify smaller,
better-defined target groups.
 Behavioral Segmentation
• Occasion • Loyalty Status
– Special promotions & – Nonusers, ex-users,
labels for holidays. potential users, first-
– Special products for time users, regular
special occasions. users.

• Benefits Sought
– Different segments • Usage Rate
desire different benefits – Light, medium, heavy.
from the same products.
Loyalty Status Segmentation

Hard-core

Split loyals

Shifting loyals

Switchers
User & Loyalty Status Segmentation