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While the idea of keeping customers loyal is timeless, new ideas and theories regularly emerge about the best ways to build and maintain customer loyalty. Along with these new ideas come new terms you need to learn to help you keep your loyalty programs current. We've compiled this list of customer loyalty concepts to help you understand, create and manage customer loyalty programs in today's organizations.
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Table of Contents Customer loyalty concepts: Top 10 buzzwords
1. Relationship marketing
2. Transactional marketing
3. Coalition loyalty program
4. Frequency marketing program
5. Enforced loyalty
6. Personalization
7. Post-sales support
8. 'Growable' customers
9. Below-zero customers
10. Punch-card loyalty programs
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Customer loyalty concepts: Top 10 buzzwords
Relationship marketing is a marketing strategy that emphasizes customer loyalty, customer retention and long-term customer engagement. Using the relationship marketing approach, an organization aims to develop strong, long-term connections with customers by providing them with information directly suited to their needs and interests. This approach often results in increased word-of-mouth activity, long-term purchasing behavior and a willingness to provide information.
Learn how relationship marketing is changing the way marketers look at customers.
Transactional marketing is a marketing strategy that focuses on a single transaction and not on the customer relationship as a whole. This approach creates passive, reactive and short-term customer relationships and does not focus on long-term customer loyalty and customer retention, as relationship marketing does. Many organizations compare transactional marketing to relationship marketing when creating a marketing strategy.
A coalition loyalty program is a set of customer benefits from multiple organizations packaged together in one customer loyalty program. This type of loyalty program is especially beneficial for small and medium-sized businesses (SMBs) because it allows them to offer their customers a variety of benefits in a cost-effective fashion.
A frequency marketing program aims to maximize the number of visits, purchases or orders from customers by rewarding customers based on their purchasing behavior. For example, many supermarket chains offer loyalty programs where cardholders get discounts on certain products and coupons based on their purchasing behavior.
Learn how to create your own customer loyalty program.
Enforced loyalty is created when an organization requires a long-term contract for use of its products or services. For example, an Internet Service Providers (ISP) may create enforced loyalty by requiring customers to sign up for their service for a specific length of time.
Personalization, often referred to as one-to-one marketing, is the process of tailoring an organization's website, products or services to meet the needs of each specific customer. Personalization is used to effectively meet customer needs, increase customer satisfaction and build customer loyalty.
See if Gartner recommends using personalization to improve the customer experience.
Post-sales support includes the services offered by the company after the sale has been completed, usually as a way of ensuring customer satisfaction and building customer loyalty. These services often include monitoring the order process, making sure the product is delivered, installed and used correctly and providing maintenance and product care information to the customer.
'Growable' customers are customers who may not have much current value to a company, but have the potential to become solid, loyal customers in the future. These customers may never be the most valuable, but can be "grown" into more valuable customers if the company takes their needs into consideration and markets to them.
Find out how one car company is targeting its most 'growable' customers.
Below-zero customers are customers who cost an organization more money than they are bringing in. These customers end up costing an organization's most valuable customers money, and most experts will recommend that an organization identify and attempt to get rid of their below-zero customers.
Get tips for getting rid of below-zero customers in the call center.
Punch-card loyalty programs are loyalty programs that reward a customer's purchase by bribing that customer to make that purchase. A popular example of a punch-card loyalty program is a frequent flier program, which rewards airline customers who purchase a flight with miles towards a future flight on their airline. This type of loyalty program is not popular with industry experts because it does not attempt to gain detailed customer information and market to customers based on their preferences.
View this list of additional customer loyalty buzzwords.
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