Editorial

Citation

Leventhal, R.C. (2006), "Editorial", Journal of Consumer Marketing, Vol. 23 No. 7. https://doi.org/10.1108/jcm.2006.07723gaa.001

Editorial

In this special issue of the Journal of Consumer Marketing, we will be examining the concept of customer loyalty, retention and customer relationship management (CRM). Why do some companies tend to succeed in their attempts at not only attracting customers who tend to repeat their purchase of that company’s specific brand, but also tend to have these customer’s become “brand advocates” in attracting new customers for that company?

It is a necessity that a company invests in making that company (or brand) more enjoyable to deal with. By attracting a more loyal customer, a premium price could also be charged for that product/service. It is not an easy task, but we can see that a company such as Starbuck’s has taken, what was once a regional brand, and has turned it in to a global powerhouse.

Loyalty may be said to rely on having the customer make a connection that transcends the actual purchase of that product or service. The buying experience and the chance to own/use that product/service must be perceived as positive – in essence, a state of mind, which may even reflect that consumer’s personality.

All too often a company believes that by improving customer satisfaction, they may increase their customers’ loyalty. Realistically though, loyalty may breed satisfaction, rather than satisfaction creating a loyal customer. Even though coffee has become a commodity item, tell that to a Starbuck’s customer. S/he could most certainly drink a less expensive more powerful coffee, but they choose not to.

In addition, it has become commonplace that whenever customer loyalty is discussed, the idea of customer rewards is introduced. This is a reflection of the fact that many of the more “successful” loyalty programs are simply structured reward systems, designed to provide tiers of compensation for their repeat customers. But competition can easily duplicate these efforts, and any competitive advantage obtained early on may be lost. In the long run, those rewards programs that deliver a unique brand asset may be the most successful.

Many of these loyalty programs never become self-funding. Why? Inadequate program planning and a lack of true customer insights. From what we have observed about customer loyalty, retention, and the development of positive customer relationships, what could we as marketers do to succeed in our endeavors? We can begin by clearly defining what we want to accomplish. Then we have to determine how we are going to measure our efforts. And, of course, we have to be clear about whom we will be targeting.

Strategies abound in terms of achieving loyalty, being able to retain our customers, and developing a positive relationship with said customers. Consider the following suggestions:

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  Make every effort to create a positive experience.

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  Create a strategy that is built around your best customers.

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  Avoid mass targeting.

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  Emphasize what differentiates you from your competition.

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  Create a cadre of brand advocates.

The bottom line is that in order to succeed, a loyal customer will remain so if they perceive that they are receiving exceptional value from the defined relationship with a company. This cannot occur without an excellence of effort from the prospect to the product/service itself. Anything less than this will not reap the long-term customer relationship that is so important.

Ferguson examines the effectiveness of retail private-label credit cards in a crowded marketplace. The author also presents some suggestions on how to incorporate the strategies of some major retailers into existing (loyalty) programs.

Stevens presents a methodology that allows us to compile a Customer Equity Model in order to calculate the true profitability of customers. Such a model allows one to describe past (customer) behavior, predict a customer’s next-year profitability and explore other variables that factor into marketing decisions.

Papadatos presents a case study of how one organization reaches out to its customers to glean information that could be used to re-brand a (loyalty) program. The bottom line is that to be distinctive in an overcrowded market, a loyalty program must provide the consumer user with an emotionally engaging experience in the redemption process.

Pearson reports the findings of a recent study to explain the reason for a disconnect between consumers and marketers, and why some brand loyalty programs fall short. The author then presents some ideas for rebuilding a relationship with consumers.

Garcia Gomez, Arranz and Cillan analyze the behavioral and affective loyalty of retailer customers in order to establish the role played by loyalty programs in the development of these variables. Companies should focus their efforts on developing a reward plan as adapted as possible to concrete needs of each participant in the (loyalty) program so as to be successful.

Mascarenhas, Kesavan and Bernacchi explore the concept that it is necessary to both understand and deliver total customer experience in order to sustain lasting customer loyalty given the pressures of commoditization, globalization and market saturation in developed countries. The authors examine three essential interactive elements: physical elements, emotional involvement moments, and value chain moments. They then propose a typology of customer loyalties as a function of “high” versus “low” levels of these three consecutive elements.

Story and Hess propose and test segmentation of multi-dimensional customer-brand relationships as a superior method of defining, understanding, and predicting customer loyalty behaviors. These relationship groups display different levels of commitment to the brand and engage in significantly different levels of loyalty behaviors.

Rundle-Thiele compares and contrasts marketer’s views on loyalty with their own consumers’ views. The finding reveal that marketers must consider loyalty as a reciprocal concept and must put into place “a look after me and I will look after you” philosophy to be successful in their efforts.

Pitta, Franzak and Fowler integrates concepts in consumer loyalty and ongoing case developments in internet practice that provide information and action approaches to consumer markets that may increase the success of providing the want satisfying market offerings. The authors also outline the costs and benefits of some online customer loyalty building practices.

Zineldin examines and develops a better understanding of the triangle relationship between quality, customer relationship management and customer loyalty. The author also presents a five qualities model to measure quality and customer loyalty.

Svensson presents us with a case study detailing a marketing approach used by Volvo in the Australian marketplace. This “masochistic marketing approach” is one that is dependent upon the outcome of a series of cause and effect relationships. This is a rather risky strategy, which seems to border on the humiliation of the corporate image itself and which seems to “violate” the basic fundamental of marketing.

Donio, Massari and Passiante explore the links existing between customer loyalty attitude, customer loyalty behaviors (measured by customer purchase behaviors) and profitability. The authors present us with a conceptual framework of this relationship, which then could be applied to set up a customized marketing strategy

Lacey and Sneath examine the fairness of loyalty programs to consumers regarding two emerging criticisms of loyalty programs: discriminating value proposition segmentation and potential exploitation of captured personal information. The authors posit that if customer loyalty programs are equitably administered and thoroughly communicated, they will then be perceived favorably by consumers.

Mundt, Dawes and Sharp examine the concept of “cross-category” loyalty which is a most important concept to service organizations as they seek to grow by selling additional different products to their existing customer base. The authors find that investments in CRM and cross selling initiatives seem to have less effect on loyalty metrics than previously thought.

Keiningham, Aksoy, Andreassen and Estrin investigate the relationship between parent satisfaction and child retention in terms of the childcare provider industry. Their results of this study indicate that parent satisfaction is most important to child retention when the child is very young (infant to one year of age). As children increase in age, parent satisfaction for childcare becomes increasingly less predictive of children’s continued enrollment at a childcare facility.

In this issue you will also find another one of our regular features that you will enjoy reading – Misplaced marketing.

Richard C. Leventhal