Customer churn in the services industry is still a growing issue, primarily because many consumers have little or no allegiance to a particular service provider. I believe that customer churn adversely affects companies because they stand to lose a great deal of price premium, decreasing profit levels and a possible loss of referrals from continuing service customers. […]
Tips for maximizing on evolutionary trends to stimulate loyalty.
Most important lesson for managers is that loyalty schemes have a life cycle. Although they may be an effective sales strategy when introduced into a market, over time they lose their effectiveness as saturation occurs and customers become habituated to the loyalty schemes. Attitudinal loyalty seems to last longer than behavioural loyalty, but as behavioural loyalty is the only form that translates to dollars; this is not good news for business. However, the solution is to scrap the tired old loyalty scheme and come up with some innovative untried initiative that will capture the imagination of customers and stimulate both attitudinal and behavioural loyalty.
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