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Essay / How to Attract and Retain Customers - 572
Maximizing your profits as a business can be done in two ways in terms of customers; attract and retain them. The latter can be achieved by creating a long-term relationship with your customer. It could be argued that by maintaining this so-called loyalty, the consumer will become dependent on their supplier. The question is whether an impulsive consumer actually loses independence or whether long-term relationships do not imply loyalty. Customer loyalty is often strongly linked to repeat purchases, but that's not all. It is a two-dimensional construct containing behaviors, in this case repeated purchases, but also relative attitudes. Relative attitude can be explained as a function of object evaluation. The factors that create relative attitude can be divided into three categories. There are cognitive antecedents – associated with information such as “brand beliefs”, affective antecedents – the feeling a consumer has towards a product, and a conative antecedent – which are considered such as sunk costs or expectations. In this model, customers are divided into four loyalty groups. Those with high relative attitude and high repeat purchases, those with neither, and a combination of both. The goal is to see if a customer is truly loyal and thus predict retention and defection. A consumer who always buys from the same store, but has a relatively low attitude, is not someone who is dependent on that supplier. Moreover, he will even abandon his supplier when he finds another brand or another product for which he has a strong relative attitude (Dick & Basu, 1994). In order to test whether the effects of relative loyalty attitudes, an experiment was conducted. Customers of different supermarkets in Great Britain and New-Z...... middle of paper ...... ment, it can be concluded that loyalty is much more than the repeated purchase of a product. Providing incentives in the form of discounts and gifts will lead to repeat purchases, but will not affect relative attitude. Instead of these loyalty programs, companies should focus on designing better products to influence relative attitude. Ultimately, the big lines at Apple's releases weren't due to the discounts given. Works Cited Dick, A. and Basu, K. (1994). Customer loyalty: towards an integrated framework. Journal of the Academy of Marketing Science, 99-113.East, R., Sinclair, J., & Gendall, R. (2000). Loyalty: testing the Dick and Basu model. ANZMAC Conference, (p. CD-ROM). Griffith University, Gold Coast. Garland, R. and Gendall, P. (2004). Testing Dick and Basu's customer loyalty model. Australasian Marketing Journal, 81-87.