Prof R K Gupta
BE (Hons), MBA, FIE
Aravali Institute of Management
Jodhpur (Rajasthan)
E-mail : /


It has been widely recognised that customer loyalty is built around several important parameters, a few of which are very important:

    1. The intrinsic quality of product or service as a satisfier of consumer need

    2.  High perceived value of the service benefits to the customer

    3. consistency in delivery of product/service

    4. After sales service i.e. customer care

    5. Bonding of personal relations with service staff

    6. Excellent two way communication channel.

    7. Listening to customer needs which often change and are widely varying.

    8. Technological leadership in delivery of service

    9. And that extra bit called Delight in marketing literature.

    However it is seen that above areas are scarcely paid attention to by service providers. These are some of situations that often emerge when a customer establishes first or repeat contact with service provider

    1. Every time a new person attends to the customer making it difficult to establish personal bond

    The information given by different people varies with little or no promise and commitment.

    2. Delay in responding to first contact or sending required information in expected time frame by the customer.

    3. Rough and indifferent tone and attitude shown. Sometimes even bored attitude. Lack of reliable information available with the service representative

    4. Missing empowerment with the service executive. In other words  no authority or clarity of role is available for  faster decision and customer satisfaction

    5. Unanswered service enquiries.

Almost every reader of this article must have gone through one or more of above experiences. Sadly even world class and MNC organisations in India are found lacking basic ingredients for customer satisfaction which is pre-requisite to loyalty.

Although organisations have inducted call centre technology, CRM databases software, toll free numbers and big customer care setup, the practical aspects of these are seriously deficient.

The author's personal experience with companies like Compaq, Citibank, GE-Capital Services, Maruti , Casio , and likes, is far from satisfactory based on recent interactions to investigate efficiency of customer care in these leading companies.

The question is- Can a company make a strong brand image and develop customer loyalty? The principles apply equally well to Manufactured goods, particularly value added and engineering goods where service component is now a primary differentiator in Brand Equity of competitors.

Three areas have been identified that point to causes of weakness:

    1. Inefficient induction of modern technology in customer service

    2. Lack of product information and authority to take decision, with the customer care executives

    3. Lack of training particularly attitudinal training.

It is also interesting to observe high correlation between customer loyalty and the employee loyalty in most of service organisations. This area is also being seriously neglected by most of companies. This needs drastic change in work environment, human resource practices and organisation structure of service providers, which is time consuming and painful process requiring clear top level policies and commitment.

Some of the rules that can be laid down for building customer loyalty are presented hereunder:

Aggressively seek out customer complaints

For most companies, only 10% of complaints get articulated by customers. The other 90% are unarticulated and manifest themselves in many negative ways: unpaid invoices, lack of courtesy to your frontline service reps and, above all, negative word of mouth.

With the Internet, an unhappy customer can now reach thousands of your would-be customers in a few keystrokes. Head off bad press before it happens. Make it easy for customers to complain, and treat complaints seriously. Establish firm guidelines regarding customer response time, reporting and trend analysis. Make employee complaint monitoring a key tool for executive decision making

Stay responsive

Research shows that responsiveness is closely tied to a customer's perception of good service. The advent of the Internet has changed the customer's perception of responsiveness. More and more, customers are coming to expect round-the-clock customer service.

Moreover, customers now arrive at Web sites time-starved and eager to locate answers. Technology tools such as customer self-service, email management and live chat/Web callback are proving increasingly critical for companies as they address the demanding customer's responsiveness needs.

Know your customer's definition of value

The loyalty password is "value." Knowing how your customers experience value and then delivering on those terms is critical to building strong customer loyalty.

But knowing your customer's true definition of value is not easy, because your customers' value definitions are constantly changing. Invest in customer loyalty research that enables you to understand, through the eyes of the customer, how well you deliver value.

Use multiple channels to serve the same customers well

Research suggests that customers who engage with a firm through multiple channels exhibit deeper loyalty than single-channel customers. But take note: this finding assumes that customers get the same consistent service whether coming into the store, logging on the Web site or calling the service center.

To achieve consistency, your firm must internally coordinate sales and service across multiple channels so that customer preferences are accessible no matter how the customer chooses to interact. Today's customers expect to hop from channel to channel, and they expect good service to follow.

Give your frontline the skills to perform

Increasingly, for many companies, the employee "frontline" is a call center where agents interact with customers. These agents will be the "loyalty warriors" of the future. Converged call centers that bring together multi-channel access points (phone, fax, email, Web) are on the rise.

Gartner Group estimates that 70% of North America's call centers will migrate to multi-channel contact centers by 2005. This means that those agents need to be as equipped to write a well-written email reply and navigate the company Web site as they are in being helpful and friendly on a phone call.

Store your data in a centralized database

Most firms lack a 360-degree view of their customer because they have no centralized database. Billing departments, sales divisions and customer service centers might all have their own databases, with no effective means for creating a complete customer-information composite.

To effectively implement a sound customer loyalty strategy, data from all customer touch-points must be combined into a centralized customer database. Without it, the firm is greatly handicapped in its efforts to serve the customer.

Know your loyalty stages and ensure that your customers are moving through them

Customers become loyal to a company and its products and service one step at a time. By understanding the customer's current loyalty stage, you can better determine what's necessary to move that customer to the next level of loyalty. There are six stages of customer loyalty: suspect, prospect, first-time customer, repeat customer, client and advocate.

If your customer relationship processes and programs aren't moving customers forward, rethink them.

Build staff loyalty

It's a fact: firms with high levels of customer loyalty have also earned high levels of staff loyalty. It's darn near impossible to build strong customer loyalty with a staff that is in constant turnover.

Why? Because, customers buy relationships and familiarity. They want to buy from people who know them and their preferences. Key rule of loyalty: serve your employees first so that they, in turn, can serve your customer.

Involve Customers and Employees

Customers love to stay with the organisations which the customers think they are part of

Same applies to employees. As per Services Triangle model of Valerie Zeithaml, the promises created by the organisation are essentially delivered through the employee. A strong bond between customer and employee and employee and organisation is therefore a must. Many things can be done, like rewarding loyal customers, enhancing product value, sharing company performance data with employees and customers and inviting suggestions and feedback from time to time. The run of mill loyalty award points are no longer a USP as almost all competitors follow them quickly. It is the implementation and convenience and the transparency of information that will count.

The companies should share positive results immediately with the employees.

The customer should feel that s/he is valued by organisation and the needs are met with earnestness and happily.

How often we buy services and products that may not be best in class but have a friendly salesman, a friendly customer care and a quick response record.

Money back guarantees boost confidence of customers in making buying decisions. Well, not only buying but repeat buying decisions. That is the key for organisation success and building powerful brands.

Branding can help companies build customer loyalty

A holistic approach to branding can help companies in many ways, including in building customer loyalty, ensuring consistency and improving value for stakeholders.

Brand building was not a one-time affair as it created values, goodwill and customer loyalty. Organisations not taking a holistic view of branding were doing so at their peril, since brands helped to create a sustainable customer relationship.

Though strong brands promised tremendous benefits and helped to attract good employees, customers and business partners, they required the companies to exhibit quality, be consistent in what they did and to continuously innovate. The `India Shining' advertisement series was a good effort at branding the country, he said


Customer Loyalty: How to Earn It, How to Keep It; Jill Griffin; The griffin Group, Austin, Texas
The Hindu; Sunday March 14 2004/stories
Who Stole My Customer?? Winning Strategies for Creating and Sustaining Customer Loyalty
by Harvey Thompson (Author)
Creating Consumer Loyalty in Healthcare (Management Series) -- by R. Scott MacStravic; Paperback

Prof R K Gupta
BE (Hons), MBA, FIE
Aravali Institute of Management
Jodhpur (Rajasthan)
E-mail : /

Source : E-mail May 22, 2004




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