Loyalty Flashcards
(19 cards)
Information sharing should be reciprocal; make the customer feel listened to and respected
Dependability
Accountability
What are the relationship expectations that consumers have for brands to which they are loyal?
“Rich affective grounding reminiscent of concepts of love and interpersonal domain, the affect supporting brand relationship endurance and depth was much greater than implied in simple notions of brand preference”
What is at the core of strong brand relationships?
Habit is a behavioral response to a cue; loyalty is driven by emotion with repeat purchases as the result. Loyalty means faithfulness and unswerving devotion
How does habit differ from loyalty?
Customers tend to spend more time with you as their incomes increase and they feel more attached
They feel the brand is theirs
They feel the offering is more superior
More likely to spread + WOM (putting their reputation on the line)
More likely to bring new customers to the brand
More likely to talk about the brand as “relationship partners”
Loyalty value
Aggregate or individual sales date can be used for
Forecasts
Understanding consumption patterns
Customizing offerings
Identifying needs / preferences and changing
Identifying upcoming life changes
Customer data is a “loyalty programs most valuable asset”
Assume that a customer bringing information is speaking on behalf of others (positive or negative)
Information value
Communication from the company to customers and
positive WOM
Sharing news
Sharing products
Sharing discounts
Customers communicating with other customers, especially important with:
Customers who are part of large social networks where peers are influential
Customers who are particularly influential (wealthy, well connected people)
Services / experiences where people seek WOM before buying
Communication value
Sources of income, generation of sales, funds, profit
Old customer retained is worth more than new customer won
Loyal customers tend to spend more
Customers can be incentives w/ loyalty programs
Reduction of costs
Repeat customer can be less expensive to serve
Costs to acquire new customers is high
CLTV may be calculated to determine expected economic value of a customer to the firm
Monetary Value
Michael Kors purse example
Loyalty
Targets pregnancy predictor score, asking chat rep to clarify return policy example
Information
positive WOM, sharing news, sharing products, sharing discounts; Important communicators: pediatricians, hair stylist, spas example
Communication
Starbucks loyalty targeting example
monetary
Behavioral segmentation strategy (silver, gold, platinum)
Higher CLTV, higher marketing budget can be to acquire each customer
Aim of loyalty programs is often to identify and nourish those customers w/ high CLTV
How do companies use CLTV to make decisions?
What do we need to understand about the Pareto principle (80-20 rule)?
20% of customers provide 80% of orgs revenue
Updated 20-200 rule
20% of customers provide 200% of revenue
How likely are you to recommend (brand) to a friend or college?
Scale 0-10
10 = extremely likely, 5 = neutral, 0 = not likely at all
9 or 10 = promoters
7 or 8 = passively satisfied
0-6 = detractors
NPS
Typical NPS score falls between
10-30
Average NPS score is
16
NPS Range
-100 to +100
Measure loyalty
Training and communication tool
Make numbers transparent
Emphasize importance of promoters & dangers of detractors
Compare region to region or brand to branch
What are the various ways companies use NPS?
