Now that we know what does not constitute customer loyalty. we can talk about what does. Customer loyalty is a composite of a number of qualies. It is driven by customer satisfaction. yet it also involves a commitment on the part of the customer to make a sustained investment in an ongoing relationship with a brand or company. These attitudes include: i The intention to buy again andior buy additional products or services from the same company. s A willingness to recommend the company to others. i A commitment to the company demonstrated by a resistance to switching to a competitor. Customer behaviours that reect loyatty Include: - Repeat purchasing of products or services. - Purchasing more and diiferent products or services from the same company. s Recommending the company to others. Any one of these attitudes or behaviours in isolation does not necessarily indicate loyal customers. However. by recognizing how these indicators work together in a measurement system. we can derive an index of customer loyalty or. in a broader sense. customer sewnty. At Burke Customer Satisfaction Associates. we have developed a Secure Customer index {SCi} using three major components to measure customer loyalty: overall customer satisfaction. likelihood of repeat business. and likelihood to recommend the company to others. Other elements may be included in the index depending upon the industry. However. in our experience. these Three components are core of meaningful customer loyalty index. What Customer Loyalty Is and Isn't To better understand the concept of customer loyalty. let's rst dene what customer loyalty is not. Customer loyalty is not customer satisfaction. Satisfaction is a necessary component of loyal or secure customers. However, the mere aspect of being satised with a company does not necessarily make customers loyal. Just because customers are satised with your company today does not mean they will continue to do business with you in the future. Customer loyalty is not a response to trial offers or incentives. tf customers suddenly begin buying your product or service. it may be the result of a special offer or incentive and not necessarily a reection of customer loyalty. 111ese same customers may be just as quick to respond to your competitors' incentives. Customer loyalty is not strong market share. Many businesses mistakenly look at their sales numbers and market share and think, \"Those numbers are surrogates for direct measures of customer loyalty. After all. we wouldn't be enjoying high levels of market share if our customers didn't love us.\" However, this may not be true. Many other factors can drive up market share, including poor performance by competitors or pricing issues. And high share doesn't mean lowr chum (the rate at which existing customers leave youpossibly to patronize your competitionand are replaced by new customers). Customer loyalty is not repeat buying or habitual buying. Many repeat customers may be choosing your products or services because of convenience or habit. However. if they learn about a competitive product that they think may be less expensive or better quality, they may quickly switch to that product. Habitual buyers can defect: loyal customers usually don't. Burke Pla That Moves You A Case study on Customer Loyalty Part - 1 Burke is an independent. fuI-service marketing research and decision support company founded in 1931. Burke Inc is a commercial research firm that specializes in customer satisfaction measurement and management programs, define customer loyatty and how this construct is operationalized into a measurable index called the secure customerfndex. The idea that loyal customers are especially valuable is not new to today's business managers. Loyal customers repeatedly purchase products or services. They reoommend a company to others. And they stick with a business over time. Loyal customers are worth the special effort it may take to keep them. But how can you provide that special treatment if you don't know your customers and how their loyalty is won and lost? Understanding loyaltywhat makes your customers loyal and how to measure and understand loyal customersenables your company to improve customer- driven quality. A customer loyalty index provides management with an easily understood tool that helps focus the organization toward improving satisfaction and retention. for a positive impact on the bottom line. The Secure Customer Index {i.e., Customer Loyalty Index] Secure Likelihood auetomer 'I'o Recommend Likelihood To Repurchase Hands-on Exercise Using the material from the Presentation on Measurement and Scaling as well as the above information. answer each of the folowing questions- 1. Identity and provide a meaningful denition of each of the constructs that researchers at Burke Customer Satisfaction Associates believe are the driving forces behind measuring the concept of customer loyalty. 2. What is the dimensionality of each of these constructs? That is. are the constructs uni-dimensional or multidimensional in nature? For each of those constructs that you believe is multidimensional. identify the possible domain of subcomponents that would be representative of that construct. Also, explain why you feel your propose-cl domain set represents that construct. 3. In your judgment. what level of scale design would be the most appropriate in creating the necessary scale measurements for collecting primary data on each construct? 4. For each construct, design an example of the actual scale measurement that could be used by Burke Customer Satisfaction Associates to collect the data