Customer loyalty

I chose this article because it focused directly on my subject of research and I’m interesting in the process of building customer loyalty. It can be done through many ways, but the most relevant keywords in building customer loyalty according to T. van Vuuren, M. Roberts-Lombard and E. van Tonder are customer satisfaction, trust and commitment.

According to Iyer, Sharma and Bejou (2006: 3–10), organizations need to identify relationships that are worth pursuing and will contribute to the overall business objectives. Stated differently, relationship management is a matter of balancing the different stakeholder interests and creating added value through trust, commitment and social norms (Garcia & Valor 2007: 426). Relationships are established through voluntary repeat business between a supplier and a customer where the behavior is planned, cooperative and intended to continue the mutual benefit of both parties. An understanding of trust and commitment is required to build this long-term relationship. Businesses need to show customers that they are committed while offering customers the core service benefit. If these issues are addressed correctly, it could lead to the customer developing long-term relations with the business, which will then create loyalty. (T. van Vuuren, M. Roberts-Lombard & E. van Tonder 2012, p. 83-84)

Roberts-Lombard (2009: 73) defines customer satisfaction as “the degree to which a business’s product or service performance matches up to the expectation of the customer. If the performance matches or exceeds the expectations, then the customer is satisfied, if performance is below par then the customer is dissatisfied”. Customer satisfaction is influenced by expectations, perceived service and perceived quality (T. van Vuuren et al. 2012, p. 83-84).

High levels of service quality may lead to increased customer loyalty, higher profitability, increased market share and lower employee turnover. If a customer feels that he has a satisfying relationship with the business, he may perceive the business to have a high level of service (Rootman 2006: 77).

According to Morgan and Hunt (1994), relationships can be viewed as a series of transactions that foster an awareness of a shared relationship through trust and commitment. Higher levels of trust and commitment in turn are related to higher levels of customer retention, and this could result in higher organizational profitability. Trust is an important factor in affecting relationship commitment and customer loyalty. If one party trusts another, such a party is willing to develop a positive behavioral intention toward the other party. Accordingly, when a customer trusts a business or brand, that customer is willing to form a positive buying intention towards the business. (T. van Vuuren et al. 2012, p. 85)

References:

T. van Vuuren, M. Roberts-Lombard & E. van Tonder (2012), Customer satisfaction, trust and commitment as predictors of customer loyalty within an optometric practice environment, Department of Marketing Management, University of Johannesburg,Southern African Business Review Volume 16 Number 3

//Rasmus