Clear and Customer Friendly Loyalty and Relationship Marketing - Term Paper Example

Customer loyalty and relationship marketing (CLRM) Table of Contents 1.0. Introduction 2 1.2. Aim 5 1.3. Scope 5 2.0. Customer loyalty and relationship marketing 5 2.1. Literature based evidence 7 2.1.1. Managing value through loyalty programs 7 2.1.2. Customer benefits and sacrifices in the value 9 2.1.3        Benefit of Retaining Customers 9 2.1.3.1. Possibility of recur business 9 2.1.3.2. Reduced expenses in getting customers 10 2.1.3.3. Fostering good relationship between the company and the clients 10 2.2. Survey findings 11 3.0. Conclusion 11 In conclusion there are various characterizes that make a successful customer loyalty and relationship marketing. The first and the most important one that really counts in all companies, is the idea of making every customer feel that she or he counts and is important to the organization. The first strategy that this Company has really embraced is the art of building a strong relationship with its customers. No customer; however small his contribution is should be demeaned or taken for granted. Every single opportunity to serve customers should be treated as a precious chance and value should be attached to it. this company just like any other with a success story have by use of a preset criterion has come up with a focus group that is made up of people who are royal to the company products in their buying and consumption behavior (Callaghan, 1995, p. 10-65).. It is a challenge to all companies or organization in general to be quick and always provide goods and services that surpass customer needs. 12 4.0. Recommendations 12 5.0. List of References 14 Executive summary This is a report targeting the audience of the CEO of a fictitious company looking at giving a detailed analysis of the Customer Loyalty and Relationship Marketing. The report handles the introduction to the study and goes ahead to give background information of the concept of Customer Loyalty and Relationship Marketing. The statistics have it that customer loyalty and relationship marketing has a positive influence on the issue of retention of customers in a company. The report goes further to look at both the company aim and scope, which are generally geared towards getting not just satisfied, but also delighted customers. The central issue of the company Customer Loyalty and Relationship Marketing is given a wider look and broadly discussed. Both the issue of managing value through preset loyalty programs and the advantages that accrue to both the customer and the company as a result of ensuring that customers are retained are discussed. The last section will look at the study findings herein referred to as survey findings, the conclusion and recommendations. 1.0. Introduction Study in relationship quality indicates that more companies are capitalizing on firm customer as well as supplier links so as to acquire valuable information on the best ways to serve customers and suppliers as well as coming up with strategies to keep them away from the company’s competitors. A researcher explains that relationship quality has a significant impact on the quality acknowledged by customers. On the other hand, another study put forward that that the satisfaction of customers and the quality of services offered has a significant impact on relationship quality. It is indicated that customer loyalty is greatly influenced by confidence as well as satisfaction with the vendor, whereas other studies are of the opinion that confidence, demand, incorporation as well profits of the company has a big influence on customer loyalty. The study on customer loyalty indicates that the quality of the relationship that exists between the involved parties is important in determining the loyalty of customers. Although, there has been no agreement on the matter concerning the dimensions of relationship quality, the little practical fact on the nature and amount of the general impact of customer loyalty on service quality (Berry, 2003, p. 25-28). This research is aimed at identifying the relationship quality dimensions that facilitates qualified services firms to come up with lasting relationships with their customers so as to maintain the loyalty of these clients. 1.1. Background information It has been accredited that customer loyalty and relationship marketing has a positive influence on the issue of the retention of customers in a company. However, the subject of getting to understand the things that may prompt a client to be loyal to a firm is one of the most important issues that require more emphasis. The study has highlighted various approaches to relationship quality although a consensus has not been arrived at, so far. The study evaluates clearly the dimensions of relationship quality that relates positively to customer loyalty that will be further provided. Communication is the major element of a company relationship, commencement, as well as progress. In addition, it is a variable that is mostly measured so as to approximate the progress of relationship with the clients of the company as this will help the company to determine the loyalty of its customers. In the perspective, of customer loyalty and relationship marketing, communication entails maintaining a firm relationship with loyal customers of the company, supplying consistent and timely information on the services offered or the intended changes and modification of services and a practical teamwork whenever a problem arises (Callaghan, 1995, p. 10-65). The objective of communication is to establish joint understanding in the early stages of relationships, progress of customer loyalty and to encourage preferred decisions of the customers. Customers are supposed to feel the company is exhibiting authentic interests in customers themselves, and in their demands, obligations, value systems and in a convincing manner, introduce new products and services. In addition, they should actually make sure that the company values feedback, as well as make sufficient decisions. In a past study, a philosopher projected that the basis of customer loyalty to the company if trust. In this context trust means confiding in partner dependability as well as sincerity. The philosophers think that service providers are supposed to be reasonable and unbiased. Trust is also defined as credit or confidence in a positive purpose of the other party concerned in the relationship. The amount of confidence attained by the partners is an important principle, facilitating assessment of the quality of relationship (Boersma, Buckley & Ghauri, 2003, p. 1031-1042). Additionally, confidence minimizes the apprehended by clients risks that mostly come as a result of wrong transactions, and is the major variable towards booming relationships with customers. On the other hand, lasting relationships encourage customer loyalty, which in turn motivates the company as well as customers to acknowledge each other in a better way. This also gives room for the service providers to understand customers better, as well as to satisfy the needs of the clients which in turn helps in developing customer loyalty. 1.2. Aim The company takes pride in meeting the goal of building long-lasting customer loyalty and relationships. The company aims at retaining at least 90 % of the entire customer that for any time do business with it. 1.3. Scope  The pledge of this company can be seen from an outside perspective as simple, but it is highly effective. What is very important to the company is the customer, and they are thus treated as trade partners whose contribution is important for the company success. The company seeks to involve customers in developing solutions and delivering excellent quality of both products and services. It is this kind of commitment that has enabled the company to create proper relationship with the customer and hence, gets a cost-effective means of marketing it products in the long run. 2.0. Customer loyalty and relationship marketing This company has its roots in two different places. One was in the United States where it was ignited by technology. Under the instruction of marketers, information technology and arithmetical algorithms were established so as to increase the dependability as well as efficacy of marketing the products of the company. The company’s systems like the call the call centers web links, services offered to customers, as well as programs to reward clients are used to maintain good relationships with customers. Database driven company has recorded significant progress in identifying customers who are profitable, increasing the dependability and efficiency of the targeted market, as well as increasing satisfaction to the needs of its customers. Reviewers argue that obtaining widespread information concerning customers raises the fear about the client privacy (Boersma, Buckley & Ghauri, 2003, p. 1031-1042). Managers of the company do not pay more attention on what the clients really needs, and more on what the pattern of the data suggest they may need. Relationship rarely develops ahead of satisfaction into a bond because, they begin with the supplier targeting the client with the attempt to woe them to buy their products. Programs of the company have in the recent past been experiencing significant problems in the implementation process. Examples includes the high revenue rates of employees in call centers, the recurrent expenses blowouts that are linked with building a data store, problems in putting into action the new systems of information technology, as well as the hiked costs in crafting a new information structure to maintain accumulated customized marketing. It can also be as a result ease and self interests. The bottom line of the impacts catalogue well accepted results to the data extraction activities. Jointly, these two combinations of results have inspired the company to put more investment in the creation of a data base operated system. 2.1. Literature based evidence 2.1.1. Managing value through loyalty programs The moment these programs are well established in the market, their mold of use mostly reflects the patterns of purchase of the products and services they prop up. For instance, most common flyers in Europe are constituents of three or four common flyers projects; they show evidence of polygamous devotion to the projects and airlines. Usually, the flyers that are not common are members of only a single scheme. It gives the impression that these golden ties up neither encourage loyalty to a single brand neither among the strong users nor notably by light users (Nelson, 2007, p. 98 – 106). To start with, customers need a product or service that satisfies their needs. In satisfying the needs of customers, the company has a sure way of getting unending loyalty from the customers. If there is an additional offered by the loyalty program to reward customers, then individuals will join the company if the program is for free. In the situation of common fryer programs, they will utilize suitable airlines treaty partners so as to achieve every right they can. Many people have the tendency to participate in these loyalty projects because, for instance, they like to bring together entitlements or they view these projects as means of offering discounts in prices. Few of these people give the impression that they participate in these schemes simply because they want to alter well known purchase patterns or create a deep seated relationship with the company (Nelson, 2007, p. 98 – 106). Researchers however, has indicated that that the clients join the loyalty schemes of the companies they make use of rather the companies whose loyalty schemes have been joined by many. This view point implies that only modest alternations in the customer conduct can be created from a customer loyalty program that is well designed. The study involved in customer loyalty program suggests that the program will neither have significant nor a lasting impact on the purchasing habits of customers or the amount of purchased products. In addition to the findings, there are continuous gossip from the world of business that propose that airlines coalitions and loyalty schemes to reward customers have failed totally. Other studies suggest that companies should consider the idea of re-assessing their loyalty projects as an urgent matter. Managing value through loyalty programs 2.1.1.1. Purchase ahead discount: this type of program intends to lock in devotion at the first instance of purchase by the use of a card that give the buyer the right to enjoy instant bonus, as well as discount on purchases to be made in the future. 2.1.1.2. Amount of purchase amount: these loyalty programs provide customers with a free gift or bonus when they exceed a certain spending amount which is usually fixed by the company. For example, a clothing seller might offer a bonus to customers who spends more than $20 in the shop on clothing. 2.1. 1.3. Rebate against the level of spending: as a substitute to discounts that are offered, this program adds up the value spent on the year and provide an end year refund. 2.1.1. 4. Upgrades and unique treatments: this program is mainly focused on the value of unique and unexpected rewards. 2.1.2. Customer benefits and sacrifices in the value The current literature on marketing gives particular attention to the value of customers because of the possible effect on the conduct of the customer and eventually the company’s performance. While some research conceptualize the value of customer in a way that is not dimensional (Nelson, 2007, p. 98 – 106). More current approaches adapt a multidimensional move, basically conceptualizing importance as composed of different advantages as well as sacrifices. The company upholds the planned relevance of having a firm foundation of loyal clients so as to maintain survival, development as well as the financial performance of the company. Scholars and successful companies emphasize the delivery of the value of customers, as the major strategy that can be used to acquire customer loyalty as well as reduce the rates of defection 2.1.3        Benefit of Retaining Customers 2.1.3.1. Possibility of recur business This is certainly the obvious benefit that a company enjoys for retaining its customers over a long period. Valuable services that can lead to client satisfaction is what makes a customer to come back therefore, giving the company a repeat business. The act of customers coming back for more purchase is not just beneficial to the company, but also to customers themselves. The issue is twofold such that the company will obviously incur less cost to acquire new customers and to customers, the probable cost of finding good and reliable supplies is considerably cut. 2.1.3.2. Reduced expenses in getting customers The process of acquiring customer for a company has certain costs that are linked to it. They include the costs incurred in advertizing the company’s products, sales demonstrations as well as transportation and meeting costs. Having repeated customers minimize these costs since the customer are aware of the products offered by the company. 2.1.3.3. Fostering good relationship between the company and the clients The current markets are increasingly shifting from heap manufactured goods and services toward a market that is more customized, where goods and services are produced to meet the specific needs of customers. When the company is sure that its customers will come back, it has more confidence to implement developments. Actually, repeat buying always make sure that there is a chance for collaborative effort between the buyer and the seller to make the product better with time. At the same note the company is assured that their customers are a delighted lot. Generally speaking, when a company is able to retain its customers, it largely succeeds in moving the customer from the common zone of simply being satisfied to being delighted. Past research has established that a scenario where a customer is delighted is only achievable by the existence of an ideal synergy between the customer and the company in question. When the company has a clear understanding of what exactly the customers need, then it can deliver to the customer expectation (Nelson, 2007, p. 98 – 106). A company that has delighted customers can stay confident that such will come back to make more purchases. This is because customers consider that company to be of different in terms of the services it provides compared with its competitors. 2.2. Survey findings A research was conducted on two companies of which, one registered more profits than the other which was exposed to a client oriented policy. The company that recorded less profit had been subjected to a policy that was sales oriented. No major differences were seen between the categories on the client’s assessments of the service relationship or their devotion towards the company. The positive impacts of a relationship marketing policy on client perceived relationship contentment, as well as devotion has not been confirmed in this research (Boersma, Buckley & Ghauri, 2003, p. 1031-1042). However, the findings seem to indicate that the company is pursuing a valuable policy, since the amount of anticipated client relationship satisfaction and devotion are reasonably high, and clients have perceived improvements in the company relationship since the policy was launched. 3.0. Conclusion In conclusion there are various characterizes that make a successful customer loyalty and relationship marketing. The first and the most important one that really counts in all companies, is the idea of making every customer feel that she or he counts and is important to the organization. The first strategy that this Company has really embraced is the art of building a strong relationship with its customers. No customer; however small his contribution is should be demeaned or taken for granted. Every single opportunity to serve customers should be treated as a precious chance and value should be attached to it. this company just like any other with a success story have by use of a preset criterion has come up with a focus group that is made up of people who are royal to the company products in their buying and consumption behavior (Callaghan, 1995, p. 10-65).. It is a challenge to all companies or organization in general to be quick and always provide goods and services that surpass customer needs.                A successful customer loyalty and relationship kind of marketing is one that believes in following up on the different commitments and claims from customers in relation to its products and services. For a business to succeed in the use of this marketing model, then very specific promises need to be made to customers, and the organization must ensure that the promises are met. This serves to win the loyalty of the customer and hence, increase sales and profitability level alike. 4.0. Recommendations To be a long term success a company need to adopt a very clear and customer friendly marketing strategy. This being the case, it is advisable that a company generate a blog site about its products and services and ensure that the site is not too formal so as to encourage open and casual discussions. Just like it is in most technological advancement, the issue of blogging is not going anywhere anytime soon. In other word it is the high time business embraced it particularly in their marketing efforts. Most companies have however embraced the concept using blog including the company in question here. Basically a blog of can in the simplest terms be referred to as an influential tool of communication that can go a long way towards helping a company or organization stay connected with its customers particularly the loyal set. In a nutshell to be successful in ensuring that there is positive customer loyalty and relationship marketing, a company should establish a user or rather customer friendly blog. By and large, a blog can possibly be used as an avenue where customers can post immediate feedback concerning the company products and the quality of service they get (Andersen, 2001, p. 167-182). Finally, it is important to note that creating a stable and admirable customer relationship is not an uphill task as such. What is most important is that the company knows what is of importance to the customer and makes decisions informed by such. Building relationship and wining customer loyalty makes the customers feel appreciated and taken as an integral part of the organization. Customer loyalty and relationship marketing encourages customers and makes them tell friends and colleagues about and company product and services. 5.0. List of References Andersen, P.H 2001, Relationship Development and Marketing Communication: an Integrative Model, Journal of Business & Industrial Marketing, 16, 2, pp. 167-182. Berry, L 2003, Relationship Marketing: Emerging Perspectives on Services Marketing, American Marketing Association, Chicago. pp. 25-28. Boersma, M. P., Buckley, P. G 2003. Trust in International Joint Venture Relationship, Journal of Business Research, 56(3), pp. 1031-1042. Callaghan, M 1995, Dimensions of a Relationship Marketing Orientation: an Empirical Exposition, Proceedings of the Seventh Biannual Word Marketing Congress, 7(2), pp. 10-65. Nelson, O. N 2007, Relationship marketing and Customer Loyalty, Marketing Intelligence & Planning, 25 (1), pp.98 – 106. Read More