Customer loyalty models vary depending on the business and focus on either behavioral or attitudinal loyalty. The Apostle Model categorizes customers as loyalists, defectors, mercenaries, or hostages. Ongoing management and a focus on rewards and customer value are important for success, but understanding and identifying customers is key.
In business, customer loyalty models have been extensively studied and expanded upon by many professionals. From the Apostle Model to cause-related marketing strategies, the types of customer loyalty models companies employ depend in part on the type of business offering and the company’s ability to understand the relative value of customer loyalty. All customer loyalty models focus on one thing – the customer.
It is widely accepted that there are two types of customer loyalty – behavioral loyalty and attitudinal loyalty. As the two terms suggest, these types of customer loyalty are affected by behavior and attitude. Behavioral loyalty covers habitual purchases, while attitudinal loyalty reflects the consumer’s attitude towards a specific brand. The factors that may or may not influence customer loyalty can be developed with a company’s understanding of effective customer loyalty models.
Customer loyalty models go hand in hand with marketing. Everything from brand awareness to customer service influences customer loyalty. For example, in a service-related business, customer service plays an important role in customer satisfaction, which directly relates to customer loyalty. In the Apostle Model of customer loyalty, four categories of consumers are distinguished: loyalists, defectors, mercenaries and hostages.
Loyals are customers who are satisfied with a product or service and are likely to continue to use it. Defectors are defined as dissatisfied customers who are unlikely to continue using a product or service. Mercenaries are satisfied customers, but whose satisfaction does not guarantee future use. Finally, hostages are defined as dissatisfied customers who will continue to use a product or service simply because there is no viable alternative.
While tailoring customer loyalty models to a specific business is part of the initial work, loyalty model management is ongoing. Traditionally, there has been a strong emphasis on customer satisfaction. The company that employs a model that trains and encourages a customer service workforce to consistently satisfy its customers is presumably successful. There are many variables in business models, however, and customer loyalty is no exception.
More recently, a focus on rewards and customer value has become a valuable part of some customer loyalty models. Examples include reward points earned for purchases, discounts, and personalized coupons. Again, the type and success of any model adapted depends on factors such as management, business offering and customer base. For example, a business that handles unsolicited giveaways, or giveaways that are deemed necessary but not in demand, such as funeral services or mold remediation, will likely not be successful offering rewards to customers. They would likely be more successful at delivering superior customer satisfaction, which leads to referrals.
Regardless of the type of customer loyalty model a company adapts, the foundation of a successful model is the ability to understand and identify your customers. Marketing strategies, as well as workforce management, contribute greatly to customer loyalty and retention.
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