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Article

Kerry Mundt, John Dawes and Byron Sharp

Many service organisations seek to grow by selling additional different products to their existing customers. Many managers are evaluated on the level of customer loyalty…

Abstract

Purpose

Many service organisations seek to grow by selling additional different products to their existing customers. Many managers are evaluated on the level of customer loyalty in terms of cross‐product holdings – for example, the average number of bank products or insurance policies held per customer. The purpose of this paper is to provide managers and researchers with some contextual knowledge and norms concerning “cross‐category” loyalty.

Design/methodology/approach

In order to compare the levels of loyalty for competing brands, five relevant loyalty metrics were used in the analysis, with data sourced from two service industries, banking and insurance.

Findings

The results show little variation in loyalty scores between competing brands, and what variation there is can be explained by historic factors, without reference to CRM strategies. This suggests that investments into CRM and cross‐selling initiatives seem to have less effect on loyalty metrics than many marketing textbooks and CRM advocates have assumed.

Practical implications

Marketers should be very cautious of setting ambitious goals for increasing loyalty to their brand at a cross‐category level.

Originality/value

Very few research papers have explored the issue of cross‐category loyalty. This is despite the value of the specific loyalty metrics as key performance indicators in service industries such as banking and insurance.

Details

Journal of Consumer Marketing, vol. 23 no. 7
Type: Research Article
ISSN: 0736-3761

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