Customer Loyalty and Relationship Marketing Program in Metro Housekeeping Limited - Case Study Example

Introduction Customer loyalty and relationship marketing is important in keeping a business running and ensuring success in a given business. Customer loyalty refers to the attraction of right customers as well as getting them to purchase often from a given place. It involves them buying in higher quantities as well as bringing in more customers to the stores. Building loyalty among the customers involves keeping in touch with them by the use of email marketing as well as thank you cards. It also involves rewarding the customers on several occasions for choosing to shop with you as well as treating them well. The most important factor however is treating them in a manner that one wants to be treated back. Relationship marketing on the other hand is a form of marketing that mainly emphasizes on customer retention as well as customer satisfaction. It focuses mainly on the long term customer value and not the short term. It also goes beyond the communication that goes beyond sales promotional messages as well as intrusive advertising. This report analyses the need for the implementation of a customer loyalty as well as relationship marketing program in Metro Housekeeping Limited. It looks into the aims, scope as well as findings and recommendations of the company. All of them aimed at improving the implementation of Customer loyalty and relationship marketing in the company. Background Information Metropolitan Housekeeping is a company that focuses on the act of cleaning rooms as well as furnishing of homes. Housekeeping encompasses several things including housecleaning. This includes activities like dusting, vacuuming and disposing off of rubbish. It can also involve the outdoor chores like washing of windows, removing leaves from the rain gutters and sweeping doormats. This company works mainly at ensuring that people’s houses are clean and that they have the services they need from cleaning to garbage disposal. In order for the company to achieve all its’ aims, it has to ensure that there is a successful implementation of a customer loyalty as well as a marketing relationship program. The marketing relationship mainly applies in the company while the customer loyalty applies to the customers. The management of the company must therefore ensure that there is an implementation of this program since it will not only benefit them but it will also benefit the customers at the long run. The customers will benefit by getting the services they need while the company’s profits go up (Danesh, 2012). Aims The aims of the company are to make a given home to look better and also to make the home to be safer. It also includes making a home to be easier to live in. Without housekeeping services, molds can grow in the wet areas and lime scale can easily build up on the taps while the bacterial action can also make the toilets to smell and the garbage disposal too. Cobwebs also end up accumulating. The tools used to achieve the company’s aims include mop, vacuum cleaners, brooms and sponges. There are also cleaning products like disinfectants, bleach and detergents. The company therefore ensures that there employees provide these services at these homes and ensures that the services are provided in a good manner. There are employees who work at getting feedback from the customers in order to ensure that the services provided are of high quality. Despite all this, the Metropolitan Housekeeping Limited ought to provide a customer loyalty program since this would enable customer satisfaction. Marketing relationship also allows the company to use its strategies to ensure that the customers are satisfied (Boonlertvanich, 2011). Scope Metropolitan Housekeeping Limited is strongly and highly influenced by reengineering. Reengineering in this case refers to the coming up of several ways aimed at ensuring that the customer has satisfaction. According to the process of reengineering, the organization of the company is structured mainly according to the complete processes and tasks rather than according to functions. The cross-functional teams are highly responsible for the whole process that is from the beginning to the end. This is highly preferred rather than working from one functional department to another functional department. The traditional methods used the functional department approach and the legacy is still visible in other companies. Metropolitan International Company uses the marketing approach in winning more customers. This has enabled the company to get more customers requiring their services (Wagner, 2009). Customer Loyalty and Relationship Marketing Relationship marketing in Metropolitan Housekeeping Limited is experiencing development. Relationship marketing has highly evolved and even moved forward. Technology opens highly collaborative as well as social communication channels. These include the tools used in the management of relationships with the customers. This goes beyond the demographic and simple customer service data. It even extends to the use of PR, application development, social media and inbounding marketing efforts. It is a widely implemented, broadly recognized and creative strategy aimed at nurturing and managing the interactions between the company and the clients as well as the sales prospects. This also involves the usage of technology to synchronize the business processes, to organize businesses and to promote the services of the company (Nitzan, 2011). There is also the aspect of automation of communication and marketing activities mainly on the concrete market sequences aimed at improving customer relations. The overall goals are mainly to attract, find as well as win new clients and the implementation of relationship marketing in Metropolitan International Limited would enable it achieve mush success economically. It will also reduce the marketing costs as well as client service. There are several ways that could come in handy in ensuring marketing relationship is implemented and is working. The first aspect is satisfaction. Relationship marketing mainly relies upon the acquisition of the consumer requirements and the communication with the customers. The communication and acquisition aims at providing a mutual and beneficial exchange that involves the creation of permission of contact by the customer mainly through an ‘opt-in’. The customer service mainly works towards customer satisfaction. It also works towards ensuring that relative prices of goods as well as the goods’ quality are in line with the customers wants. This mainly enables the determination of the amount of sales that is relative to the amount of sales in the competing companies. Groups mainly targeted using relationship marketing is large and in most cases bears fruits (Kursunluoglu, 2011). Retention is another method. It is a major principle in relationship marketing. It mainly works towards the retention of the customers mainly through various practices and means aimed at ensuring repeated trade from the preexisting customers. This is mainly by satisfying the requirements of the customers above those of the competing companies mainly through a mutual and beneficial relationship. This technique is currently used as a counterbalancing means for the new customers as well as the existing ones. This is mainly aimed at maximizing the profit found as well as counteracting with the new customers gained. The process of gaining new customers is achievable as well as retention of the customers at hand. Several companies in the competitive market will allocate higher amounts of resources. These companies will also redirect higher attention towards the customer retention in the company. It might cost close to five times more to find and attract more customers than to retain the current customers. However, gaining more customers is more profitable since it increases the profits achieved in the company. Retention must be applied in Metropolitan International Company with the aim of keeping their customers. The company must also seek to satisfy the needs of these customers in order to attract more customers into the company. Eventually, the company would gain more profit that earlier on. According to a survey done by Buchanan and Gilles, an increased profitability is highly associated with the customer retention efforts. This mainly occurs once there is the establishment of a relationship between the customer and the company. There are other factors that enable this and this includes long term customers initiating word of mouth referrals and promotions. It also includes the increased loyalty and customer retention aimed at making the workers jobs easier and even more satisfying. In turn the happy employees become more satisfied (Boonlertvanich, 2011). Customer loyalty on the other hand refers to the repeated behavior of customers visiting a certain store, company or shop over and over again. Some of the customers improve a given companies’ service mainly by providing favorable and interesting words on the publicity regarding a given product. This involves telling friends, family and relatives regarding a given product thereby increasing the number of the loyal daily customers. Offering quality products accompanied by a firm guarantee can in some cases lead to customer loyalty. Its achievement is also by rebates, extended warranties, free offers, coupons, incentives programs and other rewards. Its achievement can also be by using low interest rates mainly on financing as well as the use of higher value trade ins. The main goal of these customer loyalty programs is to achieve happy customers at the end that can be able to return for more purchases. These customers can also persuade other customers to transfer to the company’s services and products. Eventually this often leads to profitability and happy stakeholders (K, 2012). Customer program can either be a onetime program or an incentive. It can also be an ongoing group aiming at the enticement of more customers. The ‘buy one get one free’ incentive is a very popular incentive. The purchases that normally come with a risk free trial moment for some services or products are also common. The main incentive that aims at the achievement of the customer’s loyalty is the loyalty of the brand name. This mainly ensures that customers come back for the same product over and over again. The customers also start trying out the company’s other services and products. The provision of excellent customer service is a major element towards achieving customer loyalty. For example if a given client has a certain problem, then it is the responsibility of the company to do whatever it takes to correct the issues at hand. If a given product is for example faulty, then the company must replace the customer’s money or rather replace the item. This must be put as a standard procedure in any company or for any business. The people who want to achieve higher standards of customer loyalty can even go further by providing discounts or free gifts. All these incentives, free gifts and discounts with the aim of appeasing these customers (Schulze, 2012). Customer retention is the major key to customer loyalty and in order to achieve customer retention, relationship marketing has to be in place. This shows how important it is for the two to go in hand at the same time. This is customer loyalty and marketing relationship. One cannot push through without the other. The application and implementation of customer loyalty is very important in the achievement of customer satisfaction. The use of this in Metropolitan International will work towards customer satisfaction at it’s’ best. The customers will also come back every day for more products. Surveys show that retention itself acts as a major synergist towards the profit margin. Success is not a substance of chance on several occasions. A combination of time experience and customer loyalty makes a given customer to be a customer for someone’s services and products. Good customer service is therefore important towards achieving more buyers for given products and services. Customer loyalty is highly related to satisfaction, expectation, customer value as well as trust. Dealing with someone in person is mandatory to achieve more customer loyalty. It is therefore the work of the organizations, businesses and companies to train the employees towards being polite since human interaction is important in order to create a good impression. Literature-based evidence Literature based evidence mainly synthesizes the literature on customer loyalty and relationship marketing. This is mainly in the financial services areas. The literature based evidence works towards developing a very conceptual model as well as related hypotheses that suggest several things. This includes the differentiated services expected for the relationship customers. This mainly results in great satisfaction and in return increaser the loyalty among customers. This is for example in reusing the companies’ financial services as well as recommending them to others. There is also the extent into which the key demographic variables work towards moderating relationships. In order to come up with literature based evidence, a conceptual model and hypotheses is put under a test. This is by the use of questionnaires in a given telephone survey conducted. After an analysis by use of data variance, covariance techniques and variance, the analysis gave results. The results showed that the application of a proper relationship results in highly satisfied customers. There is also a high and corresponding loyalty level achieved than the customers who have no relationship with the company or business. After a total of 1,149 customers went under questionnaires form of testing’ results put into literature the importance of developing a market relationship and customer loyalty (Molapo, 2011). Although there has not been an achievement of conclusive evidence, the literature available from the test done proved the importance of customer satisfaction before anything else. The implementation of specialized relationship and loyalty protocols can be expensive but the end result is advantageous. They are the tools that ensure high value satisfaction among the customers. There should however be the tailoring of these relationship improvement protocols to suit income level, gender as well as age in order to serve the customers in a better way. Most literature on the consumption behavior of goods mainly focuses on the manufactured goods. A study on the financial services showed that it is more likely for the women to complain three times more than the men. This mainly suggests that men become less satisfied with a given product and service whereas women need to be satisfied therefore they complain in order to get high quality goods with value. Research also shows that more women pay more attention towards relationship in marketing more than the men. Because of this, the women become more satisfied as well as being loyal customers unlike the men who portray less interest. These assessments in the long run indicate that women are highly inclined towards the maintenance of a relationship with a specific company. The women mainly aim at avoiding the emotional difficulty that comes with switching mainly to another company. Men on the other hand portray less interest in the maintenance of a relationship. The men only develop interest for example in a given best offer. The close relationship developed with a company or with a financial institution with its’ given female customers must be more appealing to the company or business than that of the male customers. This must therefore lead to higher customer satisfaction as well as higher loyalty levels among the females than the males (Molapo, 2011). Managing Value through Loyalty Programs The aspect of maintaining value through loyalty programs is also important. Value in business, in an organization or in a company is important. The cost of keeping existing customers is less than trying to attract new customers. However many businesses refuse to understand this. Businesses that mainly fail to understand that long term value regarding customer loyalty often end up spending higher amounts of money. The money is often spent on advertising and marketing services aiming at the attraction of new customers. When there is an attraction of new customers, there is often the aspect of negligence of the existing customers at hand. Maintaining value through loyalty programs is also important especially during the tough business times. This is when the focusing on the existing customers is highly important. Loyal customers on several occasions focus on the value of the goods produced, are highly resistant to competition and are forgiving for example during an normal slip-up. These customers also reward the business with loyal patronage as well as shouting praises towards the business and even recommending the services and products to their families and friends. They also tend to buy more products as well as samples across the company’s service and product’s lines. The satisfied customers on the other hand focus mainly on the prices and are very easily lured out of one business by competition. On several occasions, such customers shop around mainly for bargains and they never provide any critical mouth advertising. They also buy fewer products and only test someone’s competitor’s services and products (Danesh, 2012). This can be maintained by collecting information from the customers on some patterns and references as well as how they want a product to be produced. This is very important since it enables the company not only to maintain its’ value but to also work towards achieving more customers which is the backbone of a given business. Improving the value of the customers’ needs is important as it also retains customers. Maintaining customers’ spending habits aimed at reversing the usual decline of buying activity is also important. This enables the customers to come back for the good quality goods. Appreciation for the customers for past purchases is mandatory mainly by providing rewards also comes in other occasions. This not only retains customers but it also ensures that there is that inspiration towards additional and extra buying activity in the same place (Schulze, 2012). Customer Benefits and Sacrifices in the Value Customer benefits and sacrifices in the value mainly deal with the benefits on the part of the customers. There is the concept of customer value and customer satisfaction as well as the relationship between them and the value of the goods. There is also the component of value among the customers and this includes sacrifice and benefit. This is based on that comparison in between the customers perceive and expectation. According to the specified relations, a hypothesis shows that there are different levels of sacrifices and benefits. These different levels result in different effects on the overall satisfaction of the customers. With the use of a given students’ credit card, there is the categorization of 34 sacrifices or benefits items. This is mainly according to the cost or the benefits of the items. Finally there is the verification of the assumption using questionnaires and interview (Nitzan, 2011). The value of the goods has to be high to enable the customers to achieve satisfaction. The concept of the value of the customer is currently an increasingly used strategy as well as a marketing strategy aimed at profiting businesses and people at the same time. Customer value is highly considered as a competitive and central advantage as well as a long term achievement to the business organizations. There is an attachment of a greater concept to this issue. There is the aspect of customer value build up, customer value mainly in exchange and the aspect of customer value dynamics. Equation The equation therefore on the issue of customer value lies in the satisfaction of the customer. Good customer treatment equals to more customers in the stores. These customers even go ahead to invite their friends, families and relatives to purchase things from the store. Poor customer treatment as well as their lack to get high quality goods reduces the number of customers in the stores. This equates to less profit to the store and the business in general. It is therefore important for the companies, the organizations as well as the businesses to ensure that their companies have customer loyalty and relationship marketing in order to ensure that the equation is balanced. This means that the businesses should consider producing higher qualities goods, maintaining a good relationship with the customers and ensuring the customers are satisfied (Zhang, 2011). Benefit of Retaining Customers Retaining customers leads to more delighted customers. Effective strategies of customer retention allow someone to move from a given zone of customer satisfaction to a zone of customer delight. Studies show that customer delight can only be achieved when there is a perfect synergy and strategy between the seller and the buyer. This is achieved when a seller understands what a given buyer needs and the buyers on their part understand what a given seller is able to deliver. If one can delight customers, then there are better chances towards the same customers coming back to buy the products. This is mainly because they understand and know the kind of treatment and goods offered. Fostering a great interaction between the customer and the business is another advantage. Today’s markets increasingly move away from combined standard services and products towards a market that is more customized. A customized market is whereby the services and the products are mainly tailored to meet specific customers’ needs and requirements. Having a customer that comes daily is a good chance for a given seller to build a focused relationship that focuses more on the customers’ requirements and needs. When a seller is confident that a certain customer has developed frequency to the shop then there is room for the development of improvements as well as the provision of insights towards the bettering of the needs and requirements of the customer (Homburg, 2011). There is also the importance of the possibility of a repeat business. This is the most important advantage of retaining customers. Effective services lead to satisfaction of customers. This often makes the customers to keep coming back over and over again. Repeat business is defined as a win-win proposition that is for a given business or a service provider as well as for the customer. The business on its part reduces the customer acquisition cost. The customer on his part reduces the costs incurred in finding reliable suppliers and vendors. While all this take place, there is the saving on costs that associate with the switching of vendors. The last benefit is the reduced cost for the acquisition of customers. Acquiring a given customer on several occasions has associated costs. These include the costs like following up, advertising, travel, sales demos as well as meeting costs. When a given business has a repeat customer, this means that the customer is aware of a given businesses’ processes and can also predict a given quality of an output. This therefore minimizes the costs mainly involved in a given new customers’ acquisition. When a given business also has a repeat customer, there is the potential of opening up another channel used in advertising a given business. This is mainly through the word of mouth. The use of this method of advertising is the most important method in ensuring a customer achieves satisfaction at all costs (Wagner, 2009). Survey Findings Survey findings on the issue of customer loyalty and marketing retention show that in order to achieve this, there has to be the implementation of several programs aimed at this. Coalition programs for example are highly effective. They involve mainly a group of many businesses working together towards offering membership benefits. A group of businesses for example Maui include hardware stores, lighting stores as well as restaurants. Consumers and customers on several occasions work towards earning points when they shop at these businesses. Points at the end are given out in exchange with gift certificates that are redeemable. Metropolitan Housekeeping Limited has to create surveys to know what the people need and how the services are to be offered. Conducting survey can be either through questionnaires or interviews. The conduction of these surveys on several occasions gives necessary feedback to the management for example on ways of improving the services given by the company. The services also enable the management to know the improvements needed in the provision of services (Kursunluoglu, 2011). Existing Loyalty and Relationship Marketing Programs Loyalty programs are programs, structured as marketing efforts that often reward. In marketing generally, loyalty cards, point’s cards, reward cards and advantages cards enable someone to join a loyalty program. By presenting the card, a given customer is entitled to a given discount on a purchase or also an allotment of extra points for future purposes. There are examples of existing loyalty programs. A membership program is one of the ways of making customers coming back. Several companies provide incentives aimed at keeping members as part of their membership. A rewards program on the other hand provides perks or gifts earned according to that amount of business the customers do with the company. For example in a hot tub industry, the manufacturers go on annual trip with their most successful dealers. There is also the loyalty program of creating a community. Each human being has an inner need for example to belong a community and a given business where they get their products. Marketing programs and strategies are plans as well as approaches for marketing a given businesses services and products (Boonlertvanich, 2011). In order to achieve a successful customer loyalty and marketing relationship program, there are certain principles that need consideration. The Metropolitan Housekeeping Limited has to keep the program very easy to either understand or execute. The program has to be simple for the employees to explain, execute, sell and even promote. If the members do not understand what is needed of them, or how they can get information then there will be minimal determination. There also has to be proper communication with the members whenever it is appropriate. This means that the business owners must only communicate to the members when they have anything relevant to tell them. The aspect of direct marketing is a frequently used term. It is a big idea. This refers to doing business directly with the customers. This takes several forms for example TV, catalogs, infomercials, DRTV, direct mail, internet, Shopping and match book covers. Anytime one tries to sell anything directly, for example to a buyer without going through a third party, one is doing direct marketing (K, 2012). Database marketing on the other hand is the use of customer database in marketing to the customers. This is for example by having a given list of customers in which someone mails things to them. This is for example the list of things available. This is without considering any customer profiling. In reality, this is often done by the broadcasting communications. It can also be by the use of a personal media channel. Database marketing on several instances leads to the formation of appropriate feedback. This is whereby; the behavior of the customer is put under analysis and later on taken into account. Any marketing approaches takes advantage of the customization of the data based marketing (K, 2012). Conclusion The Metropolitan Housekeeping Company has to implement the customer loyalty and relationship marketing program in order to achieve the company’s goals. The customer loyalty allows the company to relate well with the people. This is for example the vacuum cleaners sent to clean and provide other services at someone’s home. When there is a provision of these services well, the customer will keep using the company’s services in future. Some of the marketing strategies that the company can apply include doing cleaning services for free for the customers sometimes and even disposing of garbage for free. The company will get customer satisfaction and even more customers. When studying the customer loyalty and marketing relationship, it is highly important to look into the benefits, the value of both the business and the customers and finally the survey and the findings. Recommendation The recommendations on the implementation of customer loyalty and marketing relationship in Metropolitan Housekeeping Limited are important. The implementation of these services will work towards ensuring the attraction of more customers into the facility. The recommendations include the need to implement the loyalty programs in the company. This is mainly because it ensures that the superior delivery and value delivery as well as winning customer loyalty. It also ensures that there is high market share as well as revenues and profitability to the business. When the market share, profitability and revenues go up, then the cost of gaining more new customers tends to go up. This is an important recommendation. Another recommendation is creation of a structured as well as a clear customer induction program that will boost the loyalty of the customer as well as enhance customer retention. This will also enhance and increase the purchase frequency and increase the value of the dollar of every transaction made. This also leads to an increase in referrals. These customer inductions programs work towards ensuring business growth and the implementation of this in Metropolitan Housekeeping Limited will ensure an increase in the number of customers. They yield high profits and even yield a higher number of customers. Eventually the company will benefit by gaining more profit while the customers also increase and buy high value goods and even receive excellent services. Another recommendation on the implementation of customer loyalty and marketing relationship is to work towards gaining the trust of a customer. Building trust is a daily process and at the end, when it is firmly rooted the customers will never leave the shop or business for any other place. This involves providing the customers with high quality goods and ensuring their demands are met. When the customers receive high quality goods as well as gain satisfaction then they will not stop using the company’s services in future. References Boonlertvanich, K. (2011). International Journal of Business Researc. EFFECT OF CUSTOMER PERCEIVED VALUE ON SATISFACTION AND CUSTOMER LOYALTY IN BANKING SERVICE: THE MODERATING EFFECT OF MAIN-BANK STATUS 40-54. Danesh, S. N. (2012). International Journal of Business & Management. 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