Customer Loyalty

Table of Contents
1. Introduction 2
2. Literature Review 4
2.1The evolution of Customer Loyalty strategy 4
2.2 Benefits of Loyalty 4 2.2.1 Cost savings……………………………………........................................................4 2.2.2 Referrals……………….…………………………………………………………….4 2.2.3 Complain rather than defect…………………………………………………………4 2.2.4 Channel Migration…………………………………………………………………..4 2.2.5 Greater awareness of brand asset……………………………………………….…...4 2.2.6 Turn left rather than right………………………………………………...………….4 2.3 Customer Loyalty approaches……………………………………………..………………..4 2.3.1 Behavioral measurement…………………………………………………………….5 2.3.2 Attitudinal measurement…………………………………………………………….5 2.3.3 Composite measurement…………………………………………………………….5 2.4 Choosing a Loyalty Strategy……………...……………………..………………………….5 2.4.1 Strangers………………………………………………………………….................5 2.4.2 Butterflies……………………………………………………………………………5 2.4.3 Barnacles…………………………………………………………………………….5 2.4.4 True Friends…………………………………………………………………………5
3. Conclusion 6
4. Reference List 7
1. Introduction

This paper will mainly focus on customer loyalty. Thus, this will be discussed furthermore exhibiting the evolution of customer loyalty strategy where customer loyalty began in the 1980s as a series of tactical programs. These programs started as simple promotions but then evolved into longer term strategies and by time, companies also developed and implemented some forms of the customer loyalty strategies as stated by Duffy (2005: 284). He also pointed some breakdowns in the past and their solutions in addition to the benefits of loyalty. Tepeci (1999:213), Toh et al. (1993:214), Pritchard and Howard (1997:214), Hunter (1998:214) and Wong et al. (1999:214) agreed with Duffy (1998:435) that approaches need to be conducted in order to structure efficient customer loyalty. And these approaches fall into 3 types: behavioral, attitudinal, and composite. Finally, Reinartz and Kumar (2002: 4) discussed