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Loyalty types and situations underwhich they are likely to occur

Different loyalty types and under what situations are they likely to occur.

Creating a loyal customer base is a dream of every business. let’s understand the different loyalty types and its impact on business. Building customer relationships and knowing the buying motivations of customers is an important part of understanding customer loyalty. Brand loyalty has three basic components: Commitment, Preference and Repeat Purchase (Ref: Oliver, R. L. “Whence Consumer Loyalty.” Journal of Marketing). Accordingly, there are:

Four levels of loyalty based on these components:

  • Cognitive – A brand is preferred based on superior brand attributes.
  • Affective – Preference and affection towards brand has developed over the course of multiple purchase situations and transactions that were satisfying.
  • Conative – Affective stage with a hard and quick intention to re-buy.
  • Action – An intention to re-buy and an active desire to overcome situational influences and marketing efforts that may have the potential to cause switching behaviour.

Loyalty is a result of good Customer Relationship Management. The factors that majorly attribute to developing good customer relationship and business relationships are: commitment, trust, and interdependency. These factors also relate to the quality of relationship interactions.

The major outcomes of the quality of relationship interactions are satisfaction, profitability, positive evaluation of your organization, intentions to generate referrals for you, and the ability to compromise or bargain fairly.

Loyal customers can also be categorized into three loyalty segments:

  • Emotive loyalists: They are the most loyal. They feel that your product or service is the best for them and rarely reassess their purchases. This group often spends more money than those consumers who deliberate over purchases.
  • Inertial loyalists: These set of customers are uninvolved with the product, or experience high switching costs. This results in inaction and repeat purchase based on inertia.
  • Deliberative loyalists: They maintain their spending levels for your brand because they feel it is superior. They have selected your brand through a rational process such as reviewing the price and performance among the various options. Be aware they often reassess their purchases in light of new information and alternatives to find the new, better alternative.
Naga Darshan J
Darshan is a CRM Strategist, Entrepreneur, Author and Business Coach. He heads the sales and marketing for Rapid GPRS and has been instrumental in transformation of several businesses.

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