16 May 2006

Customer Loyalty

Loyalty cannot be achieved by running loyalty programs. If an enterprise has to use rebate as a bait to get loyalty, then even if the customer returns, it is not true loyalty. The enterprise is only buying customer, but not cultivating nor retaining. It will work in the short run but definitely not in the long run, because every other enterprise will do the same.
It works in the short run because customers are greedy. They are easily attracted to short-term gain. However, they prefer unconditional value to conditional rebate in the long run, and will eventually choose what suits them best.
Those who are price conscious will always opt for the lowest price, but that doesn't mean value ranks low in their purchase criteria.
Loyalty goes with branding, and branding is something that cannot be copied.
Coca Cola, Harley-Davidson, Apple... these are the companies with strong branding and loyalty without competing on price.

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