Loyalty Myths: Hyped Strategies That Will Put You out of Business and Proven Tactics That Really Work
Roy, Sanjit Kumar, South Asian Journal of Management
Loyalty Myths: Hyped Strategies That Will Put You Out of Business and Proven Tactics That Really Work By Timothy L Keinmgham, Terry G Vavra, Lerzan Aksoy, Henri Wallard Wiley, New York, 2005; Pages: 254; Price : US$ 31.99; ISBN: 10-0-471-74315-1
Customer loyalty is a concept that has enjoyed wide attention in the marketing literature for many years. In spite of its importance not much of literature exists on the measurement of customer loyalty. Generally, loyalty something, which consumers exhibit to brands, services, stores, product categorie and activities. Customer loyalty is feature of people rather than something inherent in brands.
The competition for customer retention is intensifying day by day. But most of the businesses are not taking full advantage of customer loyalty as one of the strategies to retain their customers. Managers all over the world are slowly realizing the fact that the customer loyalty strategies which they were using for so long are not easily getting translated into business success. The goal of authors in this book is to help) the managers to devise their owri customer loyalty programs, implement them and monitor them on a regular basis. In the book the authors have identified fifty-three most accepted notions about customer loyalty and criticized all of them with real world examples. They have also put forward certain strategies in the name of "Loyalty Truths" to put businesses back on track.
The book seems to be clearly divided into two parts. The first part consisting of six chapters debunks the fifty-three common loyalty myths held by businesses for a long time. The second part, comprising two chapters, deals with "the foundations of customer loyalty" and "the right way to manage for customer loyalty." Each of the six chapters contains various loyalty myths based on their common themes viz. "Loyalty Myths That Subvert Company Goals," "Loyalty Myths Concerning Loyalty Programs," "Loyalty Myths Regarding Employees," etc. Each and every myth has been dismantled with examples from the business world. Some examples from the book are the following:
Loyalty Myth 1: The number one goal of any firm should be customer loyalty. But the authors state that many broke-butbeloved companies have gone bankrupt. The example put forward by the authors is that of Apple Computer which always had stronger customer loyalty than Microsoft and Intel, but lost the computer battle. The fact is that the fundamental purpose of a business is to identify and satisfy customer needs at a profit.
Loyalty Myth 2: Firms should emphasize retention efforts rather than acquisition activities. The most obvious flaw in this misconception is its complete disregard for the product life cycle. In the early years of a product, customer acquisition is critical and in the later stages of the lifecycle customer retention becomes more important.
Loyalty Myth 3: Companies should strive to make all of their customers attitudinally and/or behaviorally loyal. The underlying assumption in this myth is that all customers are or can be made profitable for a firm. But a close examination of customer profitability reveals that some of the customers are highly profitable while others are highly unprofitable. It is suicidal for a firm to retain the unprofitable customers. …