A systems approach to the measurement of customer loyalty [Chris Brady
for Chris Jeffrey, ISSS 1998 Paper Session, July 23/98]
These notes are a rough transcription,
prepared as each individual presenter and/or commentator spoke at the ISSS
1998 conference. Gaps and errors have likely occurred. For more accurate
citations, please consult the original presenters. These notes have been
contributed to the ISSS by David Ing, of the IBM Advanced Business Institute
(firstname.lastname@example.org).[Paper session, July 22/98, 2:35 p.m.]
Chris Brady, standing for Chris Jeffrey (who's the expert), Department
of MIS, City U. Business School, London
A systems approach to the measurement of customer loyalty:
Fits in with Lucio's second's group
What is customer loyalty?
Then, why should we worry about systemic measurement?
Different definitions (in sales and marketing) may be counterproductive.
e.g. not simply a marketing or promotional device, because promotion is
substituted for real value.
e.g. people have been switching, for points or pounds, but can't call this
Tactical, not strategic.
One who chooses to enter and maintain a close relationship with an organization
over a period of time.
Long-term benefits outweigh short-term benefits.
Advocates a holistic approach to measure customer fidelitas (i.e. faithfulness,
but linkage to ontological, semantic, relationship, and semiotic)
Lowenstein and Reicheld purport to be systemic in measuring techniques,
which still look at sales, retention, etc.
Drivers of customer loyalty:
Genuinely holistic as both quantitative and qualitative measures.
Complex, emotional and hard-nosed factors, so need the deep analysis.
e.g. Mrs. Field's in one location isn't the same as another, due to location/atmosphere.
Location: easily accessible?
e.g. Toyota dealer across the street, where others will be more concerned
What about electronic sales, or Internet? How does this affect location?
Cost: not necessarily as important as businesses think.
Similarly, salary is 7th or 8th on lists for employment (at the margin)
Service: way in which the company interacts with the customer, across counter
For supplier, it tends to be image projected.
Competitors: how to draw customers, e.g. Avis working harder.
Hard to track customers, because also have an apathy factor to switch from
Offering: Is it what the customer wants?
Perception of Others: looking at alternative realities.
Perception is important, to individuals.
Availability: similar to location.
Have been running the trial framework for 2 months
... to the 1998 ISSS Conference (Rough) Transcription
... to the ISSS home page at www.isss.org.