Facts About Customer Loyalty In CRM

Facts About Customer Loyalty In CRM



In this chapter, we want to take a look at what customer loyalty is.


·      What are those things that make customers to be more loyal to an organisation?


·      What is a brand promise?


·      How caii you use brand promise to your organization’s advantage. All these will be examined in this chapter



A customer is loyal if he continues to buy a particular product, or service after the first purchase. It can also be seen as the desire of an organisation person to resist offers from competitors and stick to a particular product(s) or service(s).


Importance of Customer Loyalty

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Customer loyalty helps businesses to retain lower costs, higher margin and greater profits than businesses that fails to satisfy and retain their customers. What we are saying here is that, if an organization has loyal customers, they will spend less on adverts or other drives that are aimed at attracting new prospects into the organization. That is why it is said that loyal customers are the principal drivers of profit.


In any organization that is customer-centered, the main reason why they have decided to tow that line is to retain their customer Research shows that the cost of acquiring a customer is almost five times of that of retaining them. Heavy advertisers confirm this too. Loyal customers continue to purchase your products and services. As they grow with your organization, their value increases as they also introduce new businesses to your organization.


Components of Customer Loyalty

We have two basic components of customer loyalty, Perceptual and transactional components. Perceptual component are loyalty that is based on perception. This happens when customers become          based on their attitudes, opinions and emotions. It happens when customers feel fined after they have used a particular product. It has to do with how much the organization is able to meet the customers’ pre-purchase expectation. For an example, a customer that bought Mercury soap or cream because he wanted to tone his body.


Transactional measurement of loyalty has much to do with customers intentional or tangible purchase behaviour, such as inclination towards making repeat purchase. Some just like to make repeat purchase, not necessarily because the product satisfied their needs.


Customer might decide to stick to an organisation because of the stress involved in searching for another product that will do just the same thing. This might be attributed to search costs, transaction cost, learning cost and other forms of risk associated with switching to a competitor.


Wallet Share

This is one of the ways of measuring customer loyalty. It has much to do with the amount of money a customer is willing to share w¼th the an organisation over a particular period of time. You can determine this by dividing total purchase of the corporate brand in a particular category, say toothpaste by their total purchase in a specified category


Note:  It is reasonable to assume that loyalty is re-purchase behaviour


Loyalty is also a process, it is not something that happens overnight but an organisations can evolve means of bringing it alive by fostering behaviours and implementing processes and technology that will make customers to stick to the organisations minding mouth watering offers from competitors.


How to Create Customer loyalty

When an organisations wishes to build a loyal customer base, they must be intentional, consistent and different. They must be ready to add values to their customers. The must be able to serve their customers in such a way that serving customers in a unique way becomes an engine for growth in the organisations.


An organisations that wishes to build a loyal customer base must be able to identify their profitable customers. They must be able to do things differently. Not only that, they must be able to offer services in such a way that they leave a lasting impression in the mind of their customers.


If customer loyalty is based on customer behaviour, it will more be effective in making customers  to be more loyal and satisfying their needs.  It will also turn loyal customers to advocates who advertise your products and services without your paying a dime!


Brand Promise

This heading is self explanatory enough. Brand promise is just what customers should expect from your product. It is what customers expect your product to do for them. It should be stated from the onset that, what you expect your product to do will determine how you invest in your employees, your business, your product, technology and delivery channels. Therefore, brand promise lies at the core of the customer strategy


Loyalty depends on how the customers view your brand and other organisations that produce the same goods and services that you are producing. Customers are loyal to you because they believe that, that is the best decision to make at any given time. They might likely consider what it will cost them to switch over to a competitor such as time, effort, money or all the three.


This is telling us that if you want your customers to remain loyal to your organisation, you must go the extra mile. Do more than your competitors will do for them. It has been observed that when an organization does more than their competitors will do, their customers will remain loyal until one of the competitors raise the bar. That is why a customer-centric enterprise must have a consistent customer relationship strategy. With time, loyalty becomes an attitude. The customer finds it very difficult to shift to another brand. He will also gladly accept higher price which might be perceived as higher value by the customer.



So far in this chapter, we have talked at length about customer loyalty which we defined as repeat purchase. We also said the components of customer loyalty are perceptual and transactional.


We also discussed ways of creating customer loyalty which we said must be intentional, consistent and different. They must be ready to add values to their customers.


Finally, we talk about brand promise which is what people had in mind before they purchased your product. If you fall short of their expectation at any given time, they arc likely to look V the direction of our competitors.


Brainstorming Session

  1. What is a call centre?’ do you think that the establishment of a cell centre translates to the fact that an organisations is customer centered?


  1. Explain Segmentation and Profiling in relation to Etisalat products and services.
  2. Why do you think that organisation needs to segment and profile their
  3. “Without a proper customer strategy, a CRM strategy cannot succeed” how
    truth is this assertion.




Action Point

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Action Point
PS: If you would like to have an online course on any of the courses that you found on this blog, I will be glad to do that on an individual and corporate level, I will be very glad to do that because I have trained several individuals and groups and they are doing well in their various fields of endeavour. Some of those that I have trained include the staff of Dangote Refinery, FCMB, Zenith Bank, and New Horizons Nigeria among others. Please come on Whatsapp and let’s talk about your trainingYou can reach me on Whatsapp HERE. Please note that I will be using Microsoft Team to facilitate the training.

I know you might agree with some of the points that I have raised in this article. You might not agree with some of the issues raised. Let me know your views about the topic discussed. We will appreciate it if you can drop your comment. Thanks in anticipation.


Fact Check Policy

CRMNUGGETS is committed to fact-checking in a fair, transparent and non-partisan manner. Therefore, if you’ve found an error in any of our reports, be it factual, editorial, or an outdated post, please contact us to tell us about it.

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Adeniyi Salau

Adeniyi Salau is a highly dedicated and committed Blogger of repute. He likes sharing his IT knowledge with others. My desire is to impact as many lives as possible with my IT skills. You can download my mobile APP. Download the ICTLOAD APP on Google Playstore. Thanks.

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