Page 86 - DMGT524_TOTAL_QUALITY_MANAGEMENT

Unit 6: Customer Retention

Customer loyalty is a company’s ability to retain satisfied customers. Maintaining customer Notes
loyalty is one of the toughest challenges for any marketing department in a business enterprise,
since the wants of a customer are modified at much faster rate than their needs. It requires a
business enterprise to follow a pro-active approach that includes formulating strategies for
brand consolidation, researching and continuing with new product development, following
TQM (Total Quality Management), implementing CRM systems, and also, working out Pipeline
Management tactics.
A customer loyalty program is based on a simple premise: as a company develops stronger
relationships with their best customers, those customers will stay with the company longer and
become more profitable.
Since every marketer wants customers, a logical question to ask is “what affects customer
loyalty”. The factors that affect the customer loyalty are:
Customer satisfaction
Emotional bonding

Trust
Choice reduction and habit
History with the company

Figure 6.1: Factors affecting Customer Loyalty

For most organizations, the goal is to measure and manage customer satisfaction with the
cumulative experiences customers have with the brand, product, organization, or location. Over
time customer loyalty requires emotional bonding. Customers have a positive brand affect,
which is an affinity with the brand, or they have a company attachment, which means they like
the company.

LOVELY PROFESSIONAL UNIVERSITY 81