Marketing strategies to develop customer loyalty
There are various strategies used by marketers to develop loyalty among existing customers. Marketers can use defensive or offensive strategies to develop relationship among their customers and thereby develop loyalty among them. The offensive strategy of the company aimed to develop relationship with new customers whereas defensive strategy of the company aimed to develop relationship with their existing customers (Fornell, 1992). Earlier companies were interested to attract new customers but due to competitive business environment today companies are focused on developing relationship with their existing customers as well as among new customers- Customer loyalty switching barriers .
Customer loyalty switching barriers
Today companies are using both offensive as well as defensive marketing strategies in order to remain competitive in this business environment. The main objective of defensive strategy of the company is to reduce switching cost of their customers as well as to retain their customers by enhancing their brand image and by satisfying their existing customers’ needs so that they can satisfy their needs more successfully. Fornell, (1992) has also identified that creating switching barriers for customers help them to retain their customers and restrict their customers to switch their brand, product or suppliers.
Effects of Customer loyalty
Diller, (2000) stated that there are both positive and negative ways, in which customer loyalty can effects to hotel operations from economic point of views. Loyal customers help hotels to build confidence among them as they will stay in their hotel for the period of time. Apart from this, loyal customers provide both negative as well a positive feedback to the company which helps hotels to make improvement in their hotel operations. Feedback of customers helps company to get new ideas to improve their negative points so as to encourage not only loyal customers but also to attract new customers to become loyal customers of the company. But in spite of this, paying attention only to the opinions of loyal customers can bring inflexibility to hotel operations.
Apart from this, loyal customers Help Company to grow their profits as more they are satisfied more they will provide recommendations to hotel to improve their operations. Positive Feedback and word of mouth is the best tool of marketing activities in hotel industries. But in spite of this, if loyal customers are dissatisfied from the company their will spread negative feedback among new customers. Loyal customers in hotel helps hotel in their operations. The cost of satisfying loyal customers and convincing them to stay in the hotel or to use more and more services of hotel is lower than the cost of attracting or convincing new customers to use hotel services. Moreover, the cost of stay of loyal customer is less than the new customers as the guest management team does not have to work more from these customers, as they are already aware of hotel procedures and liked the hotel services from their previous stay in the hotel. Diller, (2000) identified that loyal customers are less price sensitive but apart from this, loyal customers can expect to get lower prices and more discounts for using hotel services as they are loyal customers of the company. And therefore it is important for the company to identify the cost of handling loyal customer of the company.