loyalty marketing

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A technique for growing and retaining existing customers and encouraging repurchase through incentive schemes. Loyalty marketing is also focused on persuading customers not to switch to a competitor. Most companies lose 50% of their customers every five years. Loyalty can be both emotional and practical. The role of the marketer is to bind in customers with compelling programmes that dissuade them from moving to a competitor. The strongest contemporary manifestations of manufactured loyalty marketing are frequent flyer miles from airlines, loyalty points in stores and credit cards, and hotel reward programmes. The original loyalty marketing programme attached coupons to consumer products giving a discount on a repurchase of the same product. The next advance in loyalty marketing was the issue of stamps (from the likes of the Co-op, or the Green Shield Stamp programme) that accumulated in personal books and could be surrendered in exchange for other goods, either made by the company making the incentive or by another company. More advanced uses of loyalty marketing go beyond individual repurchase, and focus on the loyal customer becoming an advocate for the product and service to other potential buyers through referral and recommendation.

Subjects: Marketing.

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