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Article
Publication date: 2 October 2019

Gökcay Balci, Aylin Caliskan and Kum Fai Yuen

In recent years, the business of container lines has faced severe challenges such as overcapacity and low profitability. To survive in such a competitive market, container…

Abstract

Purpose

In recent years, the business of container lines has faced severe challenges such as overcapacity and low profitability. To survive in such a competitive market, container lines need to maintain long-term customer relationships by enhancing the satisfaction and loyalty of customers. The purpose of this paper is to adopt a social exchange theory (SET) approach and investigate the impact of relational bonding strategies on the satisfaction and loyalty of customers in container shipping.

Design/methodology/approach

Drawing on SET, a theoretical model that specifies the relationships between relational bonding strategies, customer satisfaction and loyalty was proposed. Survey data were collected from 175 freight forwarders. The obtained data were analyzed using structural equation modelling.

Findings

The results indicate that financial bonding strategies have the most significant direct effects on customer satisfaction, while social bonding strategies have the strongest direct impact on customer loyalty. Financial bonding strategies, on the other hand, have the strongest total effects on customer loyalty. Intermodal and basic operations are found to have the equal total effects on customer loyalty.

Research limitations/implications

By identifying the most effective relational bonding strategies for enhancing customer satisfaction and loyalty, this study’s findings allow container lines to better allocate their resources and implement effective relational marketing policies to satisfy and retain their customers.

Originality/value

This research analyses and validates the determinants of customer satisfaction and loyalty from a relational lens and empirically contributes to the field of relational marketing in the container shipping industry.

Details

International Journal of Physical Distribution & Logistics Management, vol. 49 no. 8
Type: Research Article
ISSN: 0960-0035

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Article
Publication date: 14 December 2017

Baolong Ma, Xiaofei Li and Lin Zhang

This paper aims to demonstrate both the positive and negative effects of loyalty programs. The study proposes a model to demonstrate why and how loyalty program strategies

Abstract

Purpose

This paper aims to demonstrate both the positive and negative effects of loyalty programs. The study proposes a model to demonstrate why and how loyalty program strategies can result in good customer relationships and customer entitlement behaviors. Various configurations of three different loyalty program strategies are analyzed – tangible rewards, preferential treatment and perceived status.

Design/methodology/approach

The authors’ hypotheses were tested by analyzing the survey data of 152 frequent flyer program members in China through partial least squares-structural equation modeling. Fuzzy-set qualitative comparative analysis (fsQCA) was used to test different configurations of the three loyalty program strategies.

Findings

A net effects analysis demonstrates that loyalty programs are a double-edged sword. While loyalty programs can improve customer relationships, strategies based on perceived status have a positive relationship to customer entitlement, which may lead customers to expect extraordinary efforts from companies, such as greater discounts and extra privileges. Using fsQCA, the authors determined four sufficient configurations of high level of relationship quality and high level of customer entitlement, which also support their findings.

Originality/value

First, this study expands the research on loyalty programs by providing an examination of their positive and negative consequences. Second, by proposing the configuration paths that lead to high level of relationship quality and high level of customer entitlement using fsQCA, this research enriches research on the net effects of loyalty programs, providing researchers and practitioners with a more comprehensive understanding of loyalty programs. Third, this research extends the concept of customer entitlement to the context of buyer–seller relationships by introducing perceived status as an important antecedent of customer entitlement and by identifying four sufficient configurations.

Details

Journal of Services Marketing, vol. 32 no. 3
Type: Research Article
ISSN: 0887-6045

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Article
Publication date: 1 October 1998

Dennis L. Duffy

Takes a look at the worldwide trend toward loyalty marketing and highlights the reasons for this emphasis on loyalty. Asserts that building customer loyalty is a business…

Abstract

Takes a look at the worldwide trend toward loyalty marketing and highlights the reasons for this emphasis on loyalty. Asserts that building customer loyalty is a business strategy, not just a marketing program and that all businesses should seek to boost loyalty and maximize share of customer. Explores the various approaches to structuring customer loyalty strategies. Uses some real‐world examples to illustrate different approaches. Provides a consistent framework for developing a loyalty strategy and program. Offers insight to reduce the amount of time required to develop a loyalty strategy and touches on ways to help marketers avoid some classic mistakes. Maintains that the pursuit of customer loyalty is a perpetual one ‐ more of a journey than a destination.

Details

Journal of Consumer Marketing, vol. 15 no. 5
Type: Research Article
ISSN: 0736-3761

Keywords

Content available
Article
Publication date: 15 July 2019

Ángel López-Jáuregui, Mercedes Martos-Partal and Jose María Labeaga

This study aims to propose a theoretical framework and provide empirical evidence on the most successful marketing strategies for obtaining behavioural loyalty in small…

Abstract

Purpose

This study aims to propose a theoretical framework and provide empirical evidence on the most successful marketing strategies for obtaining behavioural loyalty in small and medium enterprises (SMEs).

Design/methodology/approach

The data are based on 475 telephone surveys conducted among Spanish hairdressers. The authors have used ordinary least squares to estimate the empirical model.

Findings

Pricing, services and communication (Web page and in-store communication) are the main drivers of customer loyalty. SMEs have to be cautious with the use of social networks to avoid damaging loyalty. In addition, those positioned at high-price segments should pay more attention to communication on the Web, and all companies should find a balance between in-store communication and the sale of products for use at home.

Research limitations/implications

Further research should try to replicate the findings with data from consumers and firms.

Practical implications

Service managers need to understand the optimal strategy to succeed in the market. The key insights of this study could also apply to other sectors, such as health, personal care and wellness services.

Originality/value

Previous research focussed mainly on large companies, while the role of loyalty in the success of SMEs has been poorly studied, with focus only on the antecedents and the measurement of loyalty. This study contributes to the previous research by analysing the effect of the strategy (price, range of services, communication, size and location) in the achievement of loyalty in SMEs.

Objetivos

Este trabajo propone un marco teórico y aporta evidencia empírica sobre las estrategias de marketing más exitosas en la consecución de lealtad comportamental en PYMEs.

Metodología

Se ha realizado una encuesta telefónica a 475 peluqueros españoles. El modelo utilizado para la estimación es el de mínimos cuadros ordinarios.

Resultados

Precio, servicios, y comunicación (página web y comunicación en la tienda) son los principales generadores de lealtad. Las PYMEs tienen que ser cautelosas con el uso de las redes sociales para evitar dañar la lealtad. Además, aquellas posicionados en altos precios deben prestar más atención a la comunicación en la web y todas deben encontrar un equilibrio entre la comunicación en el tienda y la venta de productos para su uso en casa.

Limitaciones

Investigaciones futuras podrían replicar este estudio usando datos de consumidores y de empresa.

Implicaciones prácticas

Los gerentes necesitan entender la estrategia óptima para tener éxito en el mercado. Las ideas claves de este trabajo podrían aplicarse a otros servicios personalizados de salud y bienestar.

Originalidad/valor

La investigación previa se centra principalmente en grandes empresas mientras que el papel de la lealtad en el éxito de las pymes ha sido escasamente investigado y se ha centrado en los antecedentes y la medición de la lealtad. Este estudio realiza una contribución al analizar el efecto de la estrategia (precio, surtido de servicios, comunicación, tamaño y localización) en la consecución de la lealtad en las pymes.

Palabras clave

Lealtad; pequeñas y medianas empresas; Pymes; peluqueros; estrategia de marketing; salon

Tipo de artículo

Artículo de investigación

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Article
Publication date: 1 April 2002

William Finnie and Robert M. Randall

Loyalty in the workplace has become a radically misunderstood concept. In this interview, Frederick Reichheld argues that loyalty drives financial success ‐ especially, in…

Abstract

Loyalty in the workplace has become a radically misunderstood concept. In this interview, Frederick Reichheld argues that loyalty drives financial success ‐ especially, in today’s volatile economy. As companies face the harsh realities of an economic downturn, holding onto their customers must be a priority for growth. Reichheld believes companies must focus on building a loyal customer base by forming strong relationships with front line employees. By keeping profitable customers and growing relationships with them, the “loyalty leader” companies identified by Reichheld out‐performed their competitors in the stock market by a factor of 2.2 on average during the 1990s. Bain research shows that a mere 5 percent increase in customer retention generates 30 percent to 40 percent increases in a customer’s lifetime profitability in industries like software and building management, and as much as 90 percent gains in financial services and advertising. Reichheld concludes that companies can only build a sustainable competitive edge by creating enduring, mutually beneficial relationships built on trust with employees, customers and suppliers. The ability to build and nurture loyalty over time has become an invaluable differentiator for successful organizations.

Details

Strategy & Leadership, vol. 30 no. 2
Type: Research Article
ISSN: 1087-8572

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Article
Publication date: 1 August 2006

Rick Ferguson and Kelly Hlavinka

This paper seeks to examine three evolutionary trends that are pushing the boundaries of loyalty marketing in 2006 and beyond. These trends incorporate the power of…

Abstract

Purpose

This paper seeks to examine three evolutionary trends that are pushing the boundaries of loyalty marketing in 2006 and beyond. These trends incorporate the power of networks, the power of data, and the power of convergence.

Design/methodology/approach

The paper thoroughly describes three new trends in loyalty marketing, which the authors believe have the potential to affect the strategies of all existing loyalty programs. Various programs that represent ongoing experimentation and innovation are used as examples of each of the trends.

Findings

The paper suggests that by incorporating some of the components of the three trends in loyalty marketing, marketers will see their boundaries expand and their strategies and tactics change. The results will power profits and growth.

Practical implications

It may be true that the biggest revolutions in loyalty marketing happened in the past. But micro‐revolutions in loyalty marketing are happening everywhere. By examining those programs that are innovative and willing to experiment, marketers can learn strategies that can grow their own programs.

Originality/value

The paper takes a look at evolutionary trends in loyalty marketing, with suggestions on how to incorporate these trends into existing programs.

Details

Journal of Consumer Marketing, vol. 23 no. 5
Type: Research Article
ISSN: 0736-3761

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Article
Publication date: 30 July 2018

Jenni Romaniuk, John Dawes and Magda Nenycz-Thiel

The purpose of this paper is to examine what happens to key brand performance metrics as brands change in market share, in the context of packaged goods. The metrics are…

Abstract

Purpose

The purpose of this paper is to examine what happens to key brand performance metrics as brands change in market share, in the context of packaged goods. The metrics are: penetration—the number of buyers a brand has; and loyalty—measured as purchase frequency (PF) and share of category requirements (SCR).

Design/methodology/approach

The study utilizes 24 data sets in 17 packaged goods categories in three emerging markets: China, Malaysia and Indonesia. The authors examine changes in penetration, loyalty and SCR in the context of volume and value market share change. In addition, the authors examine whether initial price point and price movements influence the results.

Findings

The primary finding is that market share change is accompanied by a greater change in penetration than in any other metric. This finding is very consistent across categories and countries. The relative importance of the two loyalty metrics varies by country. SCR was a stronger factor in Indonesia, while PF was stronger in Malaysia. Analysis indicated that pricing strategy (initial price and promotional depth) did not alter the main pattern of results, suggesting the results hold for brands with different price levels and tactics.

Practical implications

Irrespective of circumstance, to grow in value or volume market share, brands should aim to grow in penetration, while the importance of changes in specific loyalty measures depends on market conditions.

Originality/value

This research extends past research on brand growth to the very different economic, geographic and cultural conditions of three crucially important emerging markets. Its main value lies in recommendations on how much to invest in building the size of the customer base vs consumer retention.

Details

International Marketing Review, vol. 35 no. 5
Type: Research Article
ISSN: 0265-1335

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Article
Publication date: 1 August 2005

Dennis L. Duffy

The purpose of this paper is to examine the methods used by marketers over the past years to develop loyalty among customers. Furthermore, the paper considers the…

Abstract

Purpose

The purpose of this paper is to examine the methods used by marketers over the past years to develop loyalty among customers. Furthermore, the paper considers the shortcomings of these methods and certain societal and technological changes that have further impacted on the potential effectiveness of these methods in the future.

Design/methodology/approach

The author uses his experience working with hundreds of marketers around the world developing, managing, analyzing, measuring and improving customer loyalty strategies and tactics. The author combines these experiences with analysis of certain dynamics in the marketplace that have changed the way marketers must interact with customers. Finally, the author has combined this experience and analysis to formulate a point of view about the impact on marketing strategies in the future.

Findings

Many of the past efforts used by marketers to develop customer loyalty have been ineffective because they have been based on tactics used in the airline industry. These shortcomings will become greater in the future unless marketers change their ways. Corporate scandals have eroded the trust that customers have in marketers and, therefore, marketing efforts must be more genuine and easily understood or customers will react skeptically. Concerns about privacy and identity theft have heightened concerns among customers and made them more wary and, therefore, less willing to openly share information and engage in a relationship with a brand unless there appear to be genuine value and behavior by the company that engender trust and faith.

Practical implications

Marketers must step back and make absolutely certain that their efforts are based on customer needs and desires and do more to enhance customer trust than to erode it. Marketing strategies and programs must be believable. One of the most important components of customer relationships moving forward will be the development of trust that further enhances the customers' willingness to interact with certain brands and companies.

Originality/value

There is a great deal of talk in the marketplace about customer relationships. This paper seeks to bring the dialogue down to earth and incorporate the customer's point of view rather than just the theoretical marketing point of view. This paper suggests that marketers should work harder and work smarter to be sure that their programs are worthwhile to customers.

Details

Journal of Consumer Marketing, vol. 22 no. 5
Type: Research Article
ISSN: 0736-3761

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Article
Publication date: 18 March 2019

Bahman Hajipour and Molud Esfahani

The purpose of this paper is to evaluate the relationship between strategy and customer lifetime value (CLV). A new model was proposed for defining customers’ values based…

Abstract

Purpose

The purpose of this paper is to evaluate the relationship between strategy and customer lifetime value (CLV). A new model was proposed for defining customers’ values based on the RFM model and segmenting bank customers using the K-means algorithm. In addition, the authors combined a new category with the delta model in order to analyze the behavior of each cluster.

Design/methodology/approach

This case study was based on an applied method following its objectives and a descriptive-analytic method in terms of data collection. In this research, the AHP, data mining and K-means clustering methods, as well as the discriminant analysis were applied for computing the weights of the indices, examining the relationship between the identified variables, clustering the records and ensuring the clustering accuracy based on the RFM model, respectively.

Findings

The paper confirmed the relationship between the strategies and CLV. For a cluster whose strategy was the best product, customers had a minimal CLV. For a cluster whose strategy was based on total customer solutions, customers had a median CLV. For a cluster whose strategy was a lock-in system, customers had a maximal CLV. The results suggested that the delta model with these three strategies could act as the CLV developers in two stages: conversion of transient customers to attached customers and conversion of attached customers to locked-in customers.

Research limitations/implications

One of the limitations of this study was the lack of access to all the bank accounts and assessment of only the strategy type, while highlighting the exact association between every component of the strategies (e.g. structure, environment, etc.) and CLV as a dependent variable deemed to be of a great necessity. Hence, it is recommended that several studies on the relationships presented in this paper be performed to provide further insights into and guidelines on this issue in the future.

Practical implications

This study emphasized the relevance of strategy and CLV. Managers should differently treat customers in distinct CLV and loyalty levels. In other words, managers must segment their customers based on CLV and apply appropriate strategies for each segment.

Originality/value

This research tried to fulfill an identified need to study how strategy can be effect CLV through the application of the delta model with three strategic options.

Details

Marketing Intelligence & Planning, vol. 37 no. 3
Type: Research Article
ISSN: 0263-4503

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Book part
Publication date: 15 August 2019

Laila Ouhna

In the agri-food industries, particular importance is given to distribution. Indeed, maintaining good relationships with distributors is a necessity for industries seeking…

Abstract

In the agri-food industries, particular importance is given to distribution. Indeed, maintaining good relationships with distributors is a necessity for industries seeking sound marketing performance. In this context, Moroccan agri-food companies recognize the importance of developing customer loyalty. They focus on maintaining good relationships based on trust with their distributors. Considerable research has investigated trust in business-to-business (B-to-B) relationships; however, research in the agri-food industry needs further investigation. Indeed, some past research studied the effect of benevolence on loyalty (Chen, 2008; Rampl, Eberhardt, Schütte & Kenning, 2012) but they ignored studying the effect on two types of loyalty – attitudinal and behavioral – in agri-food industries.

The paper here contributes to the literature in a number of meaningful ways. First, we explore loyalty strategies used by agri-food industries to maintain distributors. This enables us to better understand how trust can boost agri-food B-to-B relationships and distributor’s loyalty. We also investigate exactly the trust dimension (benevolence; credibility) that affects more loyalty in the agri-food industry. A better understanding of the trust dimension should provide practical guidelines as to how to facilitate loyalty in B-to-B relationships. In addition, we test the two dimensions of loyalty and the importance of the attitudinal one. Using structural equation modeling to analyze data, our findings confirm the importance of benevolence in relationships between Moroccan agri-food industries and their distributors. Indeed, the results explain that the development of customer loyalty is influenced by the development of benevolence in relationships with distributors, especially on attitudinal loyalty.

Details

New Insights on Trust in Business-to-Business Relationships
Type: Book
ISBN: 978-1-83867-063-4

Keywords

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