Customer Loyalty

Essay by sevdaeceUniversity, Master's April 2009

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ABSTRACTCustomer and customer loyalty have an increasing importance in today's competitive world. The companies follow customer share intelligence instead of market share intelligence. The most used method for this is information technology based customer relationship management.

In this paper it is examined the factors that affect this loyalty, the place of information technology based customer relationship management variables such as club cards, calling centers and web sites under KIPA and MIGROS examples.

After a brief discussion of loyalty behavior and the variables which affect the customer loyalty in positive and negative ways were given in Chapter I, Chapter II explains the customer loyalty in retail sector with some examples.

CHAPTER I1. CUSTOMER LOYALTY1. 1. Loyalty Behavior in Competitive WorldAccording to Richard L. Oliver, loyalty is "A deeply held commitment to re-buy or re-patronize a preferred product or service consistently in the future despite situational influences and marketing efforts having the potential to cause switching behavior."

(Oliver, 1997)In 1978, Jacoby and Chestnut, formed the psychological meanings of loyalty for separating it from behavior meanings (such as buying again). According to them, buying continuously is not an indicator of loyalty, for this reason they separated the continuous buying behavior from loyalty. After this, they analysed the customer beliefs, feelings and traditional customer behavior. Due to them, if there is a true loyalty, then the three decision levels should be seen while choosing the company;1. The classifications for the company's qualities should be chosen against the competitive alternatives.

2. This information must certainly be connected to the affective preference to the company.

3. When the customer compares the alternatives with the company, he should show a high tendency for buying the product/service from the company.

Don Peppers and Martha Rogers define loyal customers as the people who are so pleased with the...