The evolution of customer loyalty strategy

Purpose – The purpose of this paper is to examine the methods used by marketers over the past years to develop loyalty among customers. Furthermore, the paper considers the shortcomings of these methods and certain societal and technological changes that have further impacted on the potential effectiveness of these methods in the future. Design/methodology/approach – The author uses his experience working with hundreds of marketers around the world developing, managing, analyzing, measuring and improving customer loyalty strategies and tactics. The author combines these experiences with analysis of certain dynamics in the marketplace that have changed the way marketers must interact with customers. Finally, the author has combined this experience and analysis to formulate a point of view about the impact on marketing strategies in the future. Findings – Many of the past efforts used by marketers to develop customer loyalty have been ineffective because they have been based on tactics used in the airline industry. These shortcomings will become greater in the future unless marketers change their ways. Corporate scandals have eroded the trust that customers have in marketers and, therefore, marketing efforts must be more genuine and easily understood or customers will react skeptically. Concerns about privacy and identity theft have heightened concerns among customers and made them more wary and, therefore, less willing to openly share information and engage in a relationship with a brand unless there appear to be genuine value and behavior by the company that engender trust and faith. Practical implications – Marketers must step back and make absolutely certain that their efforts are based on customer needs and desires and do more to enhance customer trust than to erode it. Marketing strategies and programs must be believable. One of the most important components of customer relationships moving forward will be the development of trust that further enhances the customers' willingness to interact with certain brands and companies. Originality/value – There is a great deal of talk in the marketplace about customer relationships. This paper seeks to bring the dialogue down to earth and incorporate the customer's point of view rather than just the theoretical marketing point of view. This paper suggests that marketers should work harder and work smarter to be sure that their programs are worthwhile to customers.