Customer Loyalty

Customer loyalty increases profits by

• reducing sales costs
• reducing marketing costs
• facilitates longer term profitable contracts

Some companies calculate what incremental profits exist at different levels of customer loyalty.

Customer loyalty is different than customer satisfaction. When Toyota first came out with their Lexus, their customers were very satisfied. When they increased the cost of Lexus closer to market level, their satisfied customers left. They were satisfied but not loyal.

Afors, Cristina and Marilyn Zuckerman Michaels, “A Quick Accurate Way to Determine Customer Needs”, Quality Progress, July 2001, p. 82

 Greengard, Samuel, “Cementing Solid Service,” Business Finance, January 2001, P.63

 Lederer, Chris; Hill, Sam, “See Your Brands Through Your Customer’s Eyes,” HBR, June 2001, P.125

 Ness, Joseph, Michael Schroeck & Rick Letendre & Willmar Douglas , “Role of ABM in Measuring Customer Value,” Strategic Finance, March 2001, P.32

 Reichheld, Frederick , “Lead for Loyalty,” HBR, July-Aug. 2001, p.76

Call John Antos or Jim Brimson at 972-980-7407 or email us below to find out how we can calculate benefits of customer loyalty so you can implement programs to increase loyalty and profits.