Customer loyalty
Another core facet of relationship marketing is its focus on increasing customer loyalty,
particularly of the MVCs and MGCs. Sargeant and West (2001) describe loyalty as:The desire on the part of the customer to continue to do business with a given supplier
over time.To successfully develop retention strategies, it is useful to acknowledge that there are
two types of loyalty, behavioural loyalty and emotional loyalty. Behavioural loyaltyis the
name given to behaviour that proves loyalty to the brand through sales. It means that the
customer behaves in the way the brand wants, i.e. by spending money. Measures of behav-
ioural loyalty include response rates to direct marketing to the customer base, ‘share of
wallet’ and market share. Emotional loyaltyacknowledges that perceptions and emotions
drive behaviour. A customer who is emotionally loyal has empathy and attachment with a
brand and company and is more likely to recommend it to potential customers.
This distinction, which is not always acknowledged, is critical to retention marketing.
The two types of loyalty reinforce each other if they can be achieved together and strate-
gies need to be developed to achieve both. On the other hand, customers who are only
behaviourally loyal are at risk of lapsing as soon as they become aware of or can readily
switch to another supplier. Likewise there is relatively little value from an emotionally
loyal customer who does not exhibit behavioural loyalty!
Sargeant and West (2001) extend the concept of behavioural and emotional loyalty
through categorising customers into one of these four types:1 No loyalty. Customers in a category move from one supplier to another for reasons such
as cost or price promotions or because they don’t discern any difference in supplier.
2 Spurious loyalty. In this case the customer does not switch supplier due to inertia
although they have limited emotional loyalty.
3 Latent loyalty. A buyer does have an emotional loyalty but it doesn’t necessarily trans-
late to behavioural loyalty – they may still ‘shop around’.
4 True loyalty. The behavioural pattern indicates a single favoured supplier or product in
a given category.The relationship between satisfaction and loyalty
Although the terms ‘satisfaction’ and ‘loyalty’ are sometimes used interchangeably, we
have seen that they do not necessarily correspond. ‘Customer satisfaction’ refers to the
degree a customer is happy about the quality of products and services. As a customer’s
satisfaction with products and/or services increases, so should their behavioural and
emotional loyalty.
As we have seen, though, there may be customers with a high degree of satisfaction
who don’t exhibit behavioural loyalty, and conversely, customers who are behaviourally
loyal may be at risk of defection since they are not satisfied. The implications are that it is
important not only to measure satisfaction with online services, but loyalty also. In this
way we are able to identify customers at risk of defection who are likely to choose an alter-
native and those in the zone of indifference. These are an important category of customers
who, although they may have a high degree of satisfaction, are not necessarily loyal.KEY CONCEPTS OF RELATIONSHIP MARKETINGCustomer loyalty
‘The desire on the part
of the customer to
continue to do business
with a given supplier
over time.’
Behavioural loyalty
Loyalty to a brand is
demonstrated by
repeat sales and
response to marketing
campaigns.
Emotional loyalty
Loyalty to a brand is
demonstrated by
favourable perceptions,
opinions and
recommendations.
Customer
satisfaction
The extent to which a
customer’s
expectations of product
quality, service quality
and price are met.