Relationship & Loyalty Marketing

The first thing that comes to mind when talking about relationship & loyalty marketing are loyalty programs. Surprisingly, in today's lecture I learnt that not loyalty programs are designed to reward loyalty. Some loyalty programs aim to buy customer's patronage by 'bribing' them with discounts, instead of giving non-price based value.

Customers are satisfied when performance meet or exceed their expectation. The Satisfaction=Expectation-Performance model can assist managers in determining whether they have deliver, exceed or dissapoint their customers.

My mom is an HSBC Premier Cardholder. Being a Premier cardholder, she expects special treatments that normal HSBC cardholders would not get, such as priority line when coming to the branches. She is merely satisfied with the financial institution when given this privilege as she expects the bank to provide her with such services (with her being a premier cardholder). On the other hand, when she could not make it to the branch to see her financial adviser, she was delighted to hear that the financial adviser (a manager, nevertheless!) was willing to come by the house anytime she's available. By going the extra mile, HSBC has managed to delight my mother by performing more than what she expected. Thus, HSBC has successfully create relationship and loyalty without sacrificing profit.

Marketing managers should be aware of the importance of relationship building to retain customer loyalty and increase profit. By examining buyer behavior, they may be able to gain insights into what customers deemed as 'expected' service and build a strategy to exceed expectations and delight customers. By delighting customers, the company will retain customers and increased profit. When this occur, employee satisfaction will increase, leading to quality service. Lastly, the satisfaction loop will lead back to customer such as my mother, being satisfied, and even delighted by the financial institution's service quality.