What Is Customer Loyalty Management?

N. Madison
N. Madison

Customer loyalty management is a process of building customer loyalty and then taking steps to maintain it. The general idea behind the process is that it costs much more to attract a new customer and convince him to buy than it does to retain a current customer. As such, companies often employ customer loyalty management strategies meant to engage their customers, such as reward programs, feedback analysis measures, and social networking tools. Companies can also implement customer relationship management techniques to help increase customer satisfaction.

A customer loyalty program might offer a free car wash for every six that are paid for.
A customer loyalty program might offer a free car wash for every six that are paid for.

Consumers have many options when it comes to companies to patronize. As such, they can move on to another company if they become dissatisfied with one. To prevent this and to hold onto customers, many companies employ customer loyalty management strategies that are designed to encourage customer loyalty and help maintain it. When businesses employ successful customer loyalty management strategies, they can benefit in a few ways. They can save the money and effort they would usually invest to acquire new customers, avoid losing income from having customers walk away, and have the opportunity to increase sales to the retained customers.

There are many strategies businesses employ for customer loyalty management, and rewards programs are often among the most common. These programs reward consumers for returning to a business to spend more money. For example, a shoe store may give a customer a discount for every five pairs of shoes he buys. Sometimes companies also give away free products and services as part of their customer loyalty campaigns. For instance, a company may give away a free ice cream cone for every 10 a customer purchases or a free car wash after every six paid washes.

Companies that establish customer rewards programs may also give away rewards that are unrelated to the products or services they sell. For example, a pharmacy might give away gift cards for another store as a reward for its customers. In such a case, the business may provide the gift card reward for its own store or for a business that is not one of its competitors.

In addition to customer reward programs, companies often use other methods of establishing and maintaining loyalty. They may, for example collect feedback and implement customer suggestions in an effort to meet customer expectations more effectively. They may also usual social media to engage their customers and keep them interested. Additionally, some companies use customer relationship management strategies, such as providing customized shopping experiences, in an effort to retain buyers.

N. Madison
N. Madison

Nicole’s thirst for knowledge inspired her to become a wiseGEEK writer, and she focuses primarily on topics such as homeschooling, parenting, health, science, and business. When not writing or spending time with her four children, Nicole enjoys reading, camping, and going to the beach.

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