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What Role Does Loyalty Play?
Generally, businesspeople accept a hierarchy linking satisfaction and loyalty to the bottom line.
Reasons It’s Smart To Keep Customers (myths?):
- The Economic Reason:
- Customer loss means lost profits
- The Replacement Reason:
- It’s far less expensive to keep a current customer than to win a new customer
- The Goodwill Reason:
- Loyal customers persuade others to buy
- The Lifetime Value Reason:
- Lifetime value increase disproportionately over a customer’s lifetime
- The Efficiency Reason
- Loyal customers are less expensive to serve
- The Exploitation Reason
- Loyal customers are less price sensitive