Types of Customer Commitment in Marketing - Term Paper Example

Fullerton (2003:334) notes that it is difficult to define what commitment is. Out of this academic limbo, various kinds of literature identify different types of customer commitments. This section examines different types of customer commitment in marketing and how they can be measured.

Types of Customer Commitment in Marketing

One type of commitment is called affective commitment. This concept is adopted from the framework that tried to explain how employees get attached to their firms. The building pillar for this concept is a need and sense of belonging. It is premised on emotions where consumers would like to identify and relate with a certain organization on a consumption basis. Sharma, Young & Wilkinson (2001:2) corroborate the same statement. Moreover, they note that this kind of attachment has the advantage of others in that it is effective in building a long-term relationships. This mostly happens when the seller and buyer share common values and goals or the buyer feels there is a need for the same (4:3). When a consumer is affectionate about a product or company, she or he is likely to do repetitive purchases every now and then. Moreover, he/she is likely to use social connections to influence others.

The second one is the continuance commitment. This is derived from theoretical models that aimed at explaining how employees feel bound to an organization. The essence of a customer developing commitment to one supplier/ producer is a result of associated switching costs (1:335). This is actually one of the marketing strategies of locking in customers away from other competitors by creating high switching costs for those already using that product. The punitive prohibitive costs consign the buyer to the same seller thus, not allowing him to explore new relationships. This is also called calculative negative cognitive commitment, continuance commitment, or locked-in commitment. The challenge of this is that the main strategy is cost-based.

The other types include calculative positive cognitive commitment. The driving force here is a value-based relationship rather than switching costs. The aim here is to influence the client positively by creating value while reducing costs. The approach is based on a psychological-behavioral approach where one feels motivated if he or she is rewarded. This concept appreciates the fact that most customers are utilitarian people. Hence, if the company can’t create value for that person, they are likely to switch their allegiance. Value-based relationship means that the client benefits from the goods he/she has bought while the firm earns revenue from sales. Here the firm realizes that if it bases its commitment on switching costs, at one time another competitor might undercut them in prices and thus, make them lose its clients.

The second last is an obligation-based commitment where the customer feels there is a need to be responsible towards the producer. This is underpinned by one's morality. Social psychologists note that this kind of relationship is built on normative ethics. An instance that this kind can apply is through emotional advertising based on nationalism. In this context, one would feel loyal enough to buy products from his own country to build the local economy. The same can be said to be normative commitment as it is based on social pressure to operate in a certain pattern such as reciprocity.

The last is a behavioral commitment that is pinned in the premise of behavior to maintain relationships and behavior towards the same. It noted that in earlier cases the premise was on attitude as the building block for commitment. Here the two parties value the efforts that have been injected to build the process and thus, can’t easily let it go.

Measuring Commitment

Measuring the level of customer commitment is not an easy process. The first approach is called the standardized multi-factor index. This combines quantitative and qualitative indicators. The second is the tailor-made multi-factor index. This is formulated by factoring in the strategic concern of the firm. Moreover, environmental factors and client needs in the product are factored in. The standardized approach incorporates cross-sectional comparison, multi-period tracking, international comparison & detail down to product, demographic & psycho-demographic factors, shopping behaviors, and correlation of commitment with financial performance.

Conclusion

The business environment has become very competitive. It only takes those who are able to adapt to change and satisfy their customer’s dynamic needs by creating value to survive. The ultimate goal of commercial enterprises is to make a profit. This goal can only be realized if a business organization is able to attract and retain valuable customers. The essence of achieving the latter is to create a working rapport that guarantees customer commitment. Commitment can be valued through collaborative effort where the firm seeks feedback from the customers. However, the major trends are in-house valuation methods through standardized multi-factor indexes and tailor-made multi-factor indexes.