Customer Loyalty

1
Customer Loyalty

• Viewed from Economics
• Ron Fisher
• CEO and Founder
• Profiling Solutions

2
Loyalty as a Function

• Loyalty can be written as a math formula
• Loyalty fn(p, q, l)

3
Reality Check

• This is NOT a Graduate Economics Seminar
• I dont like Powerpoint Presentations
• We should be able talk this thru with only a few
  slides

4
Loyalty -- Definitions

• Loyalty -- the state or quality of being loyal
  faithfulness to commitments or obligations.
• Synonyms -- fealty, devotion, constancy. Loyalty,
  allegiance, fidelity all imply a sense of duty or
  of devoted attachment to something or someone.
• (www.dictionary.com)

5
What about from a Marketers perspective?

• Someone who does not churn- retention
• A person who consistently shops our store or buys
  our product
• An entity that does not purchase based upon price

6
Customers Perspective

• Why I choose a brand, store or product
• Resonates with me - who I am, my needs

7
Basic Economics

• Supply Curve
• Demand Curve

8
Conclusions

• Supply unaffected
• Demand unaffected
• Shape of demand curve flattened
• Less volatility
• Greater ability to change price

9
Loyalty and Choices

• Gathering information takes time and is complex
• Reliability is difficult to judge
• Relationships matter

10
Loyalty Consequences

• Less detail required
• Less justification needed
• Quicker process