© 2012 Pearson Education, Inc. publishing Prentice Hall. Note 22 Loyalty-Based Marketing, Customer Acquisition, and Customer Retention

© 2012 Pearson Education, Inc. publishing Prentice Hall. The Logic of Loyalty  Loyal customers:  Provide the base profit that all customers presumably deliver  Buy more  Cost less to serve  Provide referrals  Pay a price premium  Spread their initial “acquisition cost” across more occasions 2

© 2012 Pearson Education, Inc. publishing Prentice Hall. The Logic of Loyalty  The ambiguous relationship between loyalty and referrals is clarified by the difference between “attitudinal loyalty” and “behavioral loyalty”  Attitudinal loyalty – customers really like the product or brand and recommend it to others  Behavioral loyalty – customers stay with company or brand for unflattering reasons 3

© 2012 Pearson Education, Inc. publishing Prentice Hall. Figure Note Why Loyal Customers Are More Profitable 4

© 2012 Pearson Education, Inc. publishing Prentice Hall. Figure Note 22-3A - Returns on Investments in Customer Retention 5

© 2012 Pearson Education, Inc. publishing Prentice Hall. Figure Note 22-3B - Profits on Investments in Customer Retention 6

© 2012 Pearson Education, Inc. publishing Prentice Hall. Figure Note Customers Differentiated by Loyalty and Profitability 7

© 2012 Pearson Education, Inc. publishing Prentice Hall. Tools of Customer Loyalty: Improving Customer Satisfaction 8 Improving Customer Satisfaction Customer Relationship Management

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2012 Pearson Education, Inc. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall