The Loyalty Paradigm Essay

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White Paper The Loyalty Paradigm Todd S. Mingo Introduction Loyalty, for many people, is faithfulness to a person, cause, organization, or endeavor. In business, we define loyalty as the persistent endorsement by customers of a product, service or brand via the act of spending money on that product, service or brand over alternative choices. For many business people, Loyalty simply means repeat customers. And while loyalty means repeat customers, repeat customers do not necessarily mean they are loyal. An example is a customer who patronizes a business not because they enjoy the experience, but because they have limited choice. This notion is at the very heart of our capitalist system, and why many companies who once had dominant market position, suddenly find themselves being beaten out by smaller competitors. They mistake repeat customers for loyal customers only to find out that, when given a choice, many customers will leave their brand as fast as possible. Entrepreneurs spot those opportunities and rush to provide a better choice. The Airline industry is one high profile example. While many passengers frequent a particular airline, frequently it is because it has the most flights, controls the most gates at the closest airport or provides the most frequent flyer miles/trip. But when asked if they enjoy that airline’s experience, they respond strongly negative and, given a viable alternative, would take their business elsewhere. In this example, convenience should not be mistaken for loyalty, and explains why Southwest airlines and Jet Blue have been able to succeed despite much more limited availability. So what really is a loyal customer and what does it take to build loyalty in your customer base? The Loyal Customer A loyal customer is one who; given alternatives to

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