Loyalty business model

In addition to measures which serve the customer satisfaction and customer loyalty that go beyond mere customer orientation, there is in most forms of business programs for customer loyalty, ie for the production of regular customers from walk-in customers. Classic initiatives for customer loyalty, such as bonus points and programs are now supplemented by psychology-based customer relationship management and in some cases even replaced. Psychological customer loyalty measures prove itself as effective and customer - more opportunity for customer loyalty, will only play a minor role in the classic bonus programs in the future. Considering the fact that human beings per se is not (or only to a limited extent ) rational acts and makes decisions, pricing policies must be assessed as long term little efficient means of customer loyalty.

Also established the Customer Experience Management of significantly increasing customer loyalty in this field.

Acquisitional potential - market theory to customer loyalty

Under the acquisitive potential is the ability of a company to retain customers. After the height of this potential, the individual configuration of the price-demand function depends. From acquisitive potential occur in conjunction with the price-demand function of Polypols at the lack of market transparency and the existence of preferences of market participants (eg, regular clientele ).

In monopolistic (or acquisitive ) area, the company can behave like a monopolist in pricing: Increases the company in this area the price, it does not lose customers to the competition (although some customers buy less, some nothing more). Lowers the company, however, in this area the price, so it will not win any customers from the competition ( some customers buy more, some who bought nothing before, buy now ).

Price changes in the upper and lower polypolistic areas have the following effects: massive loss of customers to competitors in the event of a price increase and massive immigration clients from the competition in the event of a price reduction.

Customer loyalty in retail and service

Of trade and service enterprises, customers, especially repeat customers, often

• Rewards according to the act of purchasing: premiums, gifts or bonuses ( exclusive offers on Preis-/Angebotsebene, such as lounge - use)
• Rewards before the act of purchasing: Announcement of discounts or other benefits (such as additional free baggage allowance ) or
• Reward during the Kaufakts: preferential treatment, such as reduced waiting time at switches.

The provider is to set incentives for repeat business. Customer loyalty programs are often associated with a customer card ( club card, bonus card). The poster receives thereby also the name and address of the customer and these can for the analysis of purchasing patterns and the creation of customer profiles and use them again for targeted advertising or other marketing measures in the context of customer relationship management. From market psychology is important to note that the acceptance of the customer card with increasing fear of data misuse is decreased.

The most common reason for households to participate in customer loyalty programs has been " saving money " in a study of arvato services mentioned by 78 % of respondents.

Especially effective customer loyalty programs prove to business customers when benefits can be taken privately to complete. In this case, the selection of the provider stronger effect than the actual purchase price under certain circumstances the premium. Here, however, it should be noted that, even partial, private use of such facilities in many businesses prohibited for reasons of compliance or is regulated.

A classic example are the discount coupons, which were introduced in the 1950s in Kaiser's coffee shops.

Frequent customer loyalty measures are

• Customer magazines and electronic newsletters
• Loyalty cards and frequent flyer programs
• Couponing
• Promotional games ( Ad-Games )
• Advantage cards / value added programs to the customer various monetary values ​​(or stateful ) benefits such as discounts at hotels, restaurants, golf clubs, etc. are obtained

100 million debit cards in circulation in Germany (May 2005 ). The frequent flyer programs of the major airlines to increase customer loyalty by rewarding frequent use by the same company with discounts in the form of free flights or premiums. The research project Kundenmonitor Germany has conducted extensive studies and surveys related to customer loyalty.

Specifically, the trading psychology points out that the instrumental caused customer loyalty may becomes a form of "artificial ", that is, labile or short-term customer loyalty leads. Important for trading companies is customer loyalty, ie a long-term customer loyalty, the (ordinary ) customers out of their satisfaction and develop in the long term even.

Customer loyalty in the industrial environment

Gehrke (2003) describes customer loyalty in industrial supplier-customer constellations as the increased willingness of the buyer to enter into a long term relationship with the supplier and to generate non-random connection requests within one, based on the specific transaction item, usual period. Customer loyalty expresses itself here so the high probability of a repeat order from. Customer loyalty programs are graded according to the attractiveness of the customers for the vendor companies. The most attractive customers are "treated" most intense. The gradation of the action is performed with the following customer classification:

• A customers (those with the highest sales or profit share ) are bound (sometimes in very pleasant surroundings ) or loyalty programs (for example, for achieving certain annual decrease) for example by means of offers of cooperation in research and development, through individual training. In this segment, are often preferred services with shorter reaction times, 24-hour on-call service and personally assigned consultant ( Key Account Manager).

• B customers (with a high proportion of regular business days ) often receive targeted promotional discounts, frequent advice and written information industry will be invited to joint training or enjoy a particular service offering that would regularly incur additional charges.

• C customers ( walk-in customers and problem customers ) are rarely bound in practice. Nevertheless, it should be at least offer a satisfactory standard of service here. Claimant clients are often good potential regular customers if the company they targeted support. Should the effort pay off, those customer relationships are addressed in part with the help of specially trained staff.

Often, the procedure is as follows: A- Customers: 80 % revenue share, B customers 15 % revenue share, C- customer: 5% of sales.

Customer loyalty is promoted especially in the area of ​​differentiated capital goods marketing. Depending on the importance of a customer (see customer value and ABC analysis ) can increase customer loyalty different marketing tools. When in use are always expenses and to bring the expected yield in the economic relationship.

There is a trade fair that deals with the topic of customer loyalty. The CRM -expo is the leading European trade fair for customer relationship management.

Customer loyalty through " experience management "

Far more than mere loyalty programs beyond the so-called customer experience management ( Customer Experience Management, CEM). It aims at creating positive customer experiences to build an emotional bond between user and product or provider. The primary goal of CEM is to turn satisfied customers from loyal customers and loyal customers, " enthusiastic ambassadors" of the brand or product ( "satisfied - loyal - advocate" ). This CEM relies not only on direct impacts, such as willingness to buy, sales or the intensity of use, but specifically also to indirect effects such as the word of mouth. Customers were " emotionally " bound.