Customer Service has always been important to customer loyalty in the shape of satisfied customers. Nevertheless, as customer satisfaction measures how well a customer’s expectations are met and customer loyalty measures how likely a customer is to repurchase and engage in partnership activities it is not the same. Nevertheless, Heskett et al. (1997) and Shoemaker (1999) argues that, “Satisfaction is a necessary but not a sufficient condition for loyalty.” So there is a clear link.
Even if there are models available to give management insight in the service process like e.g. SERVQUAL. They need to be updated to newer models that can include online experiences like e.g. WEBQUAL that also handles e-service. Apart from this also the emotional parts need to be understood better. Earlier studies by Edvardsson (2005) and Sigala (2005b) also argues that, “service quality needs to be understood from both a cognitive and an emotional side. This also relates to customer loyalty as loyalty to a large extent is based on the human relationship in which we encounter emotional aspects in most actions, even a company relationship.
Customer loyalty is a developed and well proven concept but in the end it is fully controlled by the customer, not by the company. This is more important than ever with the increasing international competition. Therefore, giving good service in today’s global and tech savvy society have been made crucial and with that understanding and embracing new technology, media and strategies.
It is no longer a sustainable business model to not care or understand your loyal customers. The power shift from company to customer has now been even further amplified by the entry of web 2.0 and the massive stream of user-generated content. Used in the right way all this can increase customer loyalty, repeat purchases and contribute to sales. However, Customer loyalty can be just as easy as asking, more complex when looking into facilitating customer process (offline/online) or enhancing the customer experience. Better service, more accessibility and more reliable service creates more satisfied customers, hopefully turning loyal. Either way, improving customer strategies, -understanding and -relationships will improve and create a deeper level of loyalty.
The key is creating a Win-win situation and to be able to do this using a structured holistic approach is necessary. The Loyalty Triangle is looking at, 1) how the service works, involving both guest and service perspective, 2) focus on the value creation both thru value added and value recovery strategies, 3) and customer communication. This makes it possible to rank, evaluate and measure- , as well as to plan future customer loyalty strategies.
In the high-end market you live or die by creating epic customer experiences as this is what your guests are expecting and paying for. In order to still be able to also deliver flawless 5-star service in the future, companies will first have to understand customer loyalty, the customer and the potential of how a holistic 360 view can benefit the customer relationship and by that customer loyalty.
One of the most important parts of customer loyalty is the customers own actions and engagement (bringing them back to do a purchase again) this part has to be enhanced in order to further improve and strengthen the customer’s engagement. This is also one of the current challenges and the main trend in 2012 according to Loyalty 360 (2012).
