This particular assignment adheres to disagree with the statement made by the CEO at the same time find reliable points to agree with him as he said that, ‘To grow your brand, you need to encourage your existing customers to buy your product a little more often. It is far more important to maximize the number of times your buyers buy you than it is to get more customers. If you can make your existing customers become sole loyal – that is they buy only your brand then you have achieved success as a marketing manager”. As it is important that business nowadays should “try to grow tendencies across the board as this will tend to make a few non-buyers buy you and it will look like an increase in penetration’ and being in authority as the top level business personality, CEO’s of business should think if their customers are satisfied as customer satisfaction doesn't always lead to customer loyalty as these present tomes even if several customers are completely satisfied the company’s product or service, forty percent of them will leave the business behind and start doing business with a stance of competition as attracting new customers can cost nearly double the amount it takes to attract repeat business from your existing customer base. ( 2004)
What's the explanation? Simple, in order to retain loyal customers and increase business sales, there needs to go beyond customer satisfaction and develop the rapport that will make the customers adore product brands in doing so, the CEO as well as the management staff will then achieve true customer loyalty as increased technology could be a help factor in creating stable customer loyalty although it is quite challenging it is to build customer rapport as such technological marvels of today take business attention away from the customers and eliminate the human touch needed to build long-term customer relationships. Customers relate to those people most like themselves, they want to feel a connection with you beyond that of being just a client and there is a need to establish a common ground with each customer quickly. In general, people don't take an active interest in a stranger's life. (2002). Therefore, stand out by building a relationship through talking about the other person and offering compliments when appropriate. (1996) Furthermore, as (2005) said in his article that customer loyalty has been at the centre of much interest among marketing academics and practitioners for nearly six decades (2000). Since this time there has been a great deal of interest in the definition of loyalty, how it can be measured and influenced, together with its impact on profitability and brand growth.
The CEO in some stance of his argument is right as according to (2001), creating value by cross selling additional services is also an important aspect of customer relationship management. (2003) explains that building strong relationships with clients does more than keep them happy and loyal but it opens doors for a marketer to gain a greater share of their assets and presents cross selling opportunities. (2003), also explains that one of the spin-off benefits of gaining in-depth knowledge of clients’ lives is that an organization is able to fully understand their needs and views which presents opportunities to sell products or services which otherwise wouldn’t have been known about. Cross selling products and services to current customers is expected to have lower associated costs than acquiring new customers, because the firm already has some relationship with the customer (2003). Aside, (2003) supports the rationale for cross selling as a strategy for reducing customer ‘churn’ is very simple: “As a customer acquires additional services or products from a vendor, the number of points where customers and vendor connect increases, leading to a higher switching cost for the customer.
Additionally, cross selling allows the opportunity to learn more about the customer’s preferences and buying behavior, thereby increasing its ability to satisfy the customer’s needs more effectively than competitors.” It is believed that, to achieve an increase in this third dimension of loyalty, it is considered necessary to have an already existing information infrastructure that allows managers to offer customers products and services that tap into their needs, but have not been sold to them yet (2003). Although, points made by the CEO has its truth in it but, the argument is against the CEO because of the fact that customer loyalty presents a paradoxical sense in the business and several see it as primarily an attitude based phenomenon that can be influenced significantly by customer relationship management so, gaining customers involves really what is the essence of penetration that could be reflected on how products are communicated to the customers and from there, the incorporation of brand loyalty is alive and visible as there could be initiatives that implies popular loyalty and affinity programs and for one aspect, empirical research shows that loyalty in competitive repeat-purchase markets is shaped more by the passive acceptance of brands than by strongly-held attitudes about them as seen in the perspective, the demand-enhancing potential of loyalty programs is more limited than might be hoped having a framework for understanding customer loyalty that encompasses customer brand commitment, customer brand acceptance and customer brand buying and be able to succeed on any large scale that are useful enough for marketing managers in the process. (2004) Moreover, loyalty is built on a perception of value for one's investment of time and money, it's essential, easily compromised, and hard to rebuild, once lost of doing something good for customers and established practices cannot be ignored. (2003) Aside, business is using loyalty marketing programs to establish a relationship with their customers having a long-term contact strategy to keep in contact with the right customers:
Ø Selecting the right customers – target customers
Ø Delivering additional value – attractive enough to cause the customer to participate
Ø Nurturing the relationship – contacting customers with consistent and appropriate communications
Furthermore, targeting the right customers is quite simple: identify those customers with the highest probability to purchase often as success comes in contacting those customers who will listen to the message and respond to it. Thus, the CEO might lack horizon in his statement as the concept of customer apathy is just this: some people do not want a relationship as they have been doing business with a particular company for a long time and are comfortable with the delivery of services. The product does not represent an important element in their lifestyle, certainly not enough to warrant a relationship. (1996)
Also, good communications is to provide value to customers by enhancing the product use in their work or home life. The communications establish an emotional bond between the customer and the company that contributes to a long-term interactive relationship. ( 2005). The impact of lifestyle communications on customer behavior is influenced by how much the product represents the lifestyle – personal or professional of the customer. For an interactive relationship to exist there needs to be a reason to interact. The customer is made to feel special relative to other customers. (1999)
In addition, taking account to support such perspective, a study has indicated that customers have apparent ideas of what is meant by a strong brand loyalty as follows: (Albrecht 1992).
Ø A 'huge' brand as the customers interpret strength in terms of size, as measured by its pervasive ways as well as advertising
Ø Premium quality in the customer's mind as there were strong brands that was not viewed as premium quality
Ø Distinguished, obvious awareness a distinctive characteristic of strong brands is that customers tend to perceive them as having major points of difference compared with other brands
Ø 'Identification' among customers strong brands tend to generate more comments such as 'It's my kind of brand' or 'It understands my needs'
Ø 'Affinity' towards brand there exists an emotional part of the branding that consumers react to and led to a theory of branding that involves the sharing of values between successful brands and their customers
Ø Loyalty in buying and purchasing as the ultimate goal of every branding activity
Thus, customer loyalty are being evaluated in various ways as there are those who believe that 'loyalty is what they feel' a reflection of the emotional attachment that consumers feel for brands, so that this definition leads to a concern about the effectiveness of sophisticated and costly campaigns of communication and persuasion. (1996) For others, who hold that 'loyalty is what they do', nothing more than repeated behaviour over time, irrespective of any warm feelings then the primary concern is with the paramount importance of sales and the bottom line. The convergence of the brand's values with that of the person, and the degree to which the brand is regarded as having personal relevance. This is quite a distinct issue from the authority of the brand and important because customers believe that authority is in many ways necessary but not sufficient for brand strength. (1996)
Even though, growing propensities make certain buyers buy the brand because of its maker or name, the CEO has his better point for the situation, as he may see his customers as a unique people not as market units and aims to provide total quality service, there is really a need for wise handling and carrying out of certain decisions in order to successfully market the products and make your customers solely your own – meaning, these customers only goes for your products and ignore others of the same type and variety, as providing exclusive services to people is important as it will then encompass all the work being done by the organization giving your brands the applied strategies to persuade your customers and positively gain their trust and loyalty putting their heart into it. As there is the nostalgia that came about when brands of sufficient heritage have personal associations for people at formative stages of their life that is likely to meet a person's perceived needs in a social sense -- it is sometimes said that brands help people 'say something' about themselves to others. This could imply seeking approval of peers, superiors and involves social pressures that are taken into account by customers like for instance, clothing fashion brands or sports equipment. It means that in order to understand loyalty, therefore, people need to understand that what drives choice is not the absolute appeal of a 'value proposition', but rather its relative appeal when judged alongside alternatives as this is seldom sufficient to enable accurate predictions of customer behaviour on relative utility differences, while providing a reasonable account of buying actions respectively (1988).
Customer loyalty is the new marketing mantra for good reason – an important element in building a profitable brand. Marketers are fighting over who owns the customer as businesses do not own the customer, they own what the customer is loyal to and own the brands and then create, reinforce and grow the loyalty customers have to the brands you own as well as deal loyal customers and as a marketing manager, there is a need to reinforce such deal and provide brand loyal customers having the opportunity to reinforce and strengthen brand loyalty as it is true that winners in business ways generate brand loyal customers as they do not just create customers. (1996) In lieu of penetrating certain buyers to buy your brands, and will not only focus in encouraging your customers to buy your products alone as there is a need to have ways having the frequency and timing of transactions for a list of customers, it is natural to try to make forecasts about future purchasing, to individual-level conditional expectations. Moreover, there could be related issues may arise from a customer-level database, but these are typical of the questions that a manager should initially try to address. This is particularly true for any firm with serious interest in tracking and managing “customer lifetime value” (CLV) on a systematic basis as it is crucial to have a great deal of interest, among marketing practitioners in developing models to accomplish such work as it assumes that customers buy at a steady rate for a period of time and then become inactive. (1987)
For the increased in penetration, there maybe the use of Pareto/NBD is a powerful model for customer-base analysis, but its empirical application can be challenging in terms of parameter estimation. (1987) Perhaps because of these operational difficulties, relatively few researchers actively followed up on the SMC paper soon after it was published. ( 1987) However, it has received a steadily increasing amount of attention in recent years as many researchers and managers have become concerned about issues such as customer churn, attrition and CLV. As 1998, 2002, 2001 refer to the applicability and usefulness of the Pareto/NBD, only a small handful claim to have actually implemented it. Also, it is relevant that the greater the evidence of the truth of the promise, the greater the conviction customer will have that the promise is true since, they increase the evidence of the truth of the promise. Henceforth, the reason a lot of brands die and deserve to die, is that they make irrelevant promises – they are not brands, they are simply a result of distribution (2004). capability or the willingness to pay slotting payments because of the fact, several marketers have not been building brands, they have been distributing products as a result, the customer is not loyal to them because there is nothing to be loyal to, as it is true that irrelevant promises turn the brand marketplace into a bland marketplace. (2005)
Thus, much of today's marketplace is a bland, undifferentiated world of irrelevant promises that deserve to die, it is not because of some economic trend, not because the customer is becoming more demanding, not because of the decline of the discretionary income, but because these bland promises should not have been on the shelf in the first place. (2004) Customers are rational people, not irrational and wish to behave in a sensible manner and will do their to search for the value and believe that the value is the most highest quality, most trustworthy source of a relevant promise that is supported by quality product and service at the right price implying the essence of a rational behavior. (1996) In today's marketplace, the relationship between a customer and a supplier is added after the sale is made – this is fundamental to human behavior with emphasis on reinforcing the wisdom of the purchase; on creating and reinforcing and growing loyalty. Loyalty is not just a behavior, it is an attitude as well and for the people who are highly loyal but have a low attitude toward the brand, only small percent of them continue to exhibit brand loyal behavior – these are not loyalists but repeaters and that as the CEO or marketing manager there is need to always continue to promote to the customers and keep them as they can be deal loyal, not brand loyal in the end process. ( 1999)
Today’s market is characterized by highly competitive organizations which are looking for consumer’s loyalty. Profit-oriented firms are faced with the challenge to maintain their own competitive edge in order to survive and be successful. Strategies are carefully planned and executed to gain the ultimate goal of all: company growth as well as working components within the organization which shape the direction of the organization. Among this is the customer – the fuel of the organization. (2000) The dynamics of better living define most of the aspects of human life from traditional ways to technologically driven mechanisms, life indeed is no longer the same years ago. Along with the changing business world, customers change as well, becoming more knowledgeable and highly sophisticated as before, it is enough if they have purchased a product the way and condition possible. In return, business management had shifted their focus on their customers so as to stay successfully in business and that organizations have to reformulate their conventional business aims and purposes from being process-focused to customer-centered business. (2000) Also, customers evolved within the radical emergence and amalgamation of innovative and manipulative processes in the global marketplace as they play vital role in any economic endeavor. (2003)
Thus, believing on the idea that the customers are the fuel of every profit and/or non-profit organization, studying their behavior and identity remains parallel and important in every decision-making activity. Customers have always regarded as vital factors in relation to different organizational operations and functioning. (1997) They live and act in a constantly changing cultural, social, technological, legal, and economic environment. Shaped by the environment, marketing institutions, and activities in return have a major/minor impact on it. Their behavior and identity, on the other hand, significantly determine the business future in a particular part of country and given culture as region varies on its own, so does the customer behavior and identity of such group of people through observations of their respected behavior. (1997)
believes that understanding the behavior of the customer is a basic step in helping marketing authorities to visualize and predict future trends, reactions, and changes in the marketing mix. It may also serve as a reference in determining the potentials of new products and its adoption. (1990) Henceforth, financial services and institutions spend large amounts of money on cross selling and customer relationship initiatives with the hope of fostering loyalty from existing customers. Analysis of the double jeopardy pattern, found to occur in a wide range of categories, shows that loyalty scores vary to a much lesser degree than penetration scores between large and small brands (1990). The fact that such a pattern exists in many markets implies that the main source of growth is not likely to come from encouraging existing customers to buy more often, but from acquiring additional customers and increasing a brand’s penetration (2003;2004). Multiple loyalty measures, all of which measure loyalty in a slightly different way, were chosen to decrease bias that can be associated with single measures. Understanding how customers purchase financial service products, including the range of providers they consider, provided further insight into loyalty in this industry. (1997) This means that cross selling will actually be relatively easy as a brand’s customers are highly likely to purchase additional products again from that brand. (1997)
However, from the point of view of studying a whole market, it would also be expected that each brand within the market would gain a similar proportion of this repeat business. It would therefore appear to be difficult to outperform other brands in relation to cross selling and achieve any form of significant brand growth from such a performance (1992). In opinion (2000) the argument towards attitudinal loyalty is empty. “Those who prefer an attitude-inclusive definition of loyalty seem to rely on the argument that the everyday meaning of loyalty includes evaluations that validate the behaviour. There is no necessity for such a loyal colleague to have beliefs or feelings consistent with the behaviour. In fact, some people would see the loyalty as all the greater if there were unexpressed misgivings.” (1995; 1996; 1998). “The customers, we’re told, are the loyal ones.... Win loyalty therefore, and profits will follow as night follows day…For the last ten years, the gospel of customer loyalty has been repeated so often and so loudly that it seems almost crazy to challenge it”. (2002) The other argument that has been presented in literature to a lesser extent involves penetration, a focus on which means increasing the number of buyers of the brand, without expressly concentrating on how often the product is bought (1990).
While increasing loyalty and increasing a brand’s penetration may both seem plausible strategies for growth, in practice the only option for brand growth is a combination of the two, with penetration having the greater impact on brand growth ( 1990). Customer loyalty presents a paradox. Many see it as primarily an attitudebased phenomenon that can be influenced significantly by customer relationship management initiatives such as the increasingly popular loyalty and affinity programs. However, empirical research shows that loyalty in competitive repeat-purchase markets is shaped more by the passive acceptance of brands than by strongly-held attitudes about them. (2001)
Most marketers would agree that if consumers like a particular brand, they will buy more of that brand. As marketers have long suspected, emotional loyalty does drive behavioural loyalty. But the correlation is not linear. The greatest gains in purchasing and retention are only achieved when a consumer’s attachment to the brand reaches the highest level. So powerful is the effect on sales, the leader in market share is usually the brand with the greatest number of emotionally loyal customers. ( 2001).
Therefore, It is crucial to grow propensities across the board and intend to make some non-buyers buy the products or brand being sold and not force your existing customers to be a sole buyer of these brands in turn, it is also a must to maximize effectiveness of loyalty programs for the development of high level brands for customers and not just simply integrate repetition of the buying process. Aside, the reality that relationships are the essence of marketing life but, it could be hard to think about such business to survive without relationships as it entail invisible threads which build a unique bond between customers and CEO’s business organizations and be able to deliver consistent service standards for sustaining the interest of customers. ( 2003) As it is vary much important that loyal customers should be in a situation to rely on the CEO and the management team to take decision for their brand satisfaction and better welfare as buyers to see trust in them as it is the basis for any human interaction in the market and its influence on communication, feedback, effective delegation and the acceptance of common goals and sharing of balanced views for the benefit of both sides of the situation (2002).
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