The Paradox of Loyalty

Part of the problem surrounding the whole issue of consumer loyalty, according to new analysis from Through the Loop, is that all too often marketers are focusing on attracting new customers rather on satisfying their existing customer base.

The result is not only that they take their eyes off the ball but also there may be promotions such as low-price deals to attract customers that have the potential to alienate existing customers who pay a higher rate and over a longer-term.

Loyal customers are important as they are the best source of long-term profitability for a company. The costs of maintaining these relationships are lower than those of customer acquisition yet companies persist with giving away hard-earned margins to attract what may frequently be disloyal consumers. Customer promiscuity is encouraged while genuine loyalty is not.
Loyalty or reward schemes do have a role to play in helping marketers understand consumer behaviour. However, these often appear to be launched without any clear strategic objective or overriding consumer benefit. Understanding of the behaviour of individual consumers is the best way to achieve genuine satisfaction and a reward scheme can be a useful way to do this.

This is one of the consumer issues facing marketers that is analysed and discussed in the latest edition of BrandLoop from Through the Loop Consulting. For further information, contact Martin Payne on 020 8334 6300 or email at martin@throughtheloop.com

All articles 2006-22 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.

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