Course Assignment

Sales Force Management

Ema Miodragovic

November, 2020
 1. The long-term customer relationships undoubtedly are important for the seller. But how

about for the customer? Many argue that customers are less and less loyal all the time

while companies are making greater investments for customer management and related

systems. Is customer loyalty thing of the past or are we just only starting to understand

what customer loyalty means?

Customer loyalty measures how much a customer is willing to repeat the purchase of one brand

or company, sometimes neglecting the discomfort of a particular company/brand. It can be

experienced towards brands, services, products, or activities. Many factors affect this measure

like customer satisfaction, experiences, and of course the value of goods and services that the

company provides. There are a lot of undefined definitions of loyalty, but it was generally

obtained into sub-definitions, that states that loyalty is an attitude, and it may lead into relation

with the brand; that loyalty is related to past purchases (revealed behavior); and that is closely

related to individual's characteristics, conditions, and purchase position. But, like many, this

theory was followed by many critics and disagreements.

For the seller, customer loyalty is a very important thing that needs to be monitor and advise

constantly for many reasons. The customer who is loyal to one company doesn't pay much

attention to prices and is willing to pay an additional cost for the same quality, which will in the

long-term bring more significant profit to the company. Also, to those customers, the availability

of the product is not a big deal, because they are ready to put a little more effort into finding the

product that they want. Loyal customers will also bring free advertising. If they are pleased with

the product, they will surely tell their friends or family about it, and in that way, they will
promote the business to a new audience. Besides this, they will be active in giving feedback to

the company, which can be adopted when creating a marketing strategy. There is a little chance

that those customers will search for another brand, that produces the same product, and they will

presumably try the other products of that same company (for example the different category).

Overall, companies must be aware of their customers, their loyalty, and everything that goes with

that. Digital marketing is a perfect tool in finding new customers, but most importantly to reserve

personal contacts with already existing customers. This will increase the company's profit,

because not only that digital marketing is one of the cheapest methods of advertising today, but

because preserving the existing customers requires much less money than finding the first-time

customer. In the end, loyal customers can become an important asset to the company.

Customer feedback can increase the profit, because the company will understand their point of

view, their needs, and demands and work accordingly, and it can provide insights that may help

in building strong bonds with customers.

Companies can analyze personal relationships with people (family, friends, employees,

coworkers, etc.), and their relationships with objects (random-everyday objects, brands, products,

companies, etc.). This information can give them a better understanding of diverse personalities

and their relationships, which can help companies to gain and sustain loyal relationships with

their customers.
So, customer loyalty is essential and even crucial for a company's survival. But how it affects the

customer?

Most of the literature about loyalty is from the perspective of marketers, which indicates that

customer loyalty can be affected by companies by implementing loyalty and affinity programs.

On the other hand, various empirical researches from the customer's view, show different results.

Most participants emphasized the importance of passive acceptance of one brand, rather than

their attitudes towards it.

According to Siemieniako's research, that was conducted in five countries (Poland, Belarus,

Portugal, Canada, and Australia), when responders were asked to write what associates them

with the word loyalty the most common association that they wrote on the giving paper is trust,

then important, person, use, product, service, brand and positive. For most participants trust

is the most important condition for loyalty, as trust and loyalty are in very close relation. When

interviewed the responders, researchers find out different 'definitions' or connotations with the

word trust, such as respect, faithfulness, honesty, and most importantly keeping a promise.

I would point out another answer from this research which is positive. In various definitions of

loyalty, the word positive and positive attitudes are very constant, but in many types of empirical

research about loyalty from a customer's perception, we can see that positive attitudes about

some company or brand are not that much emphasized, as company's actions are.

We can see according to answers from this research that customers care about the company's

ability to keep their word and deliver a high-quality product, more than their attitude towards that

company.

The researcher connected all of the answers and analyzed them to see the relations between

them. The result was that loyalty to them is a long-term relationship that you have with a certain
object or person. This customer insight can help companies to comprehend that loyalty to them is

relational, which means that every company's move and action, will have potential customer's

reaction, and it can be aimed towards various objects.

An important personal finding was that customers expect loyal actions from companies. They

highlighted that this is a necessity when it comes to enhancing their loyalty. Those actions can be

trying to understand their needs, providing great customer service, giving attention to consumers

(online and offline), providing them with clear information, be honest and respectful towards

their customers and competition. This will, as mentioned, complete with a customer's reaction.

The most popular approach of the companies to gain customer's loyalty is through loyalty

programs. A loyalty program is a tool used by new information technology generation, which

provides customer financial and relationship rewards. This tool was embraced by many

companies, and it has two main purposes: increasing sales revenues/products bought from the

suppliers, and building strong relationships between products/brand and customers. Marketers

will launch this program for various reasons. An example of this is a protective purpose – match

or overtake competition or in publicity purpose – building awareness. Marketers claim that

fulfilling any of these loyal program’s aims will increase profits.

The results of these programs, if the focus is on the customer as an individual, is increased

customer loyalty of the single brand, paying less attention to the prices, be more understanding

of the company's offers, changes, or arguments, having less desire to research alternative brands,

spread a word, and awareness, attract more clients, and overall increased number of bought

products. The customers that are a member of this program are much more likely to understand a

company's low-quality service or any irregularity when it comes to price than first-time buyers.
As mentioned, the purpose of a loyalty program is obtaining loyal customers, but my secondary

research (mostly empirical researches), shows that this approach is not wanted among customers,

and it is very hard to achieve for most companies.

According to Bolton's research 43% of participants said that they didn't use their loyalty program

credit cars during the first year, while 36% said that they used that card just several times (most

of them said less than six times), and according to Sparks and Wright's research every fifth

customer with a loyalty credit card didn't use it in the first three months. We can see through this

study that these programs are not exactly what customers need or want.

During my dependent research, I discovered that any form of marketing communication, such as

advertising is seen by the customers, not as a way that will persuade them to change their minds

and attitudes toward their company, and possibly change their level of commitment, but as

publicity that just builds awareness.

The results of this dependent research showed that customers will most likely use various brands

of one category (restaurants, vacations, TV stations, clothes, and so on). So, it is very difficult for

companies to gain enough loyal customers, who will decrease the need for other brands and will

repeatedly purchase from one, to cover the costs of the program.

In conclusion, people will always purchase what they need and what they desire. The opinions

on customer loyalty are various, both from the marketer's perspective and from the consumer's

perspective. Many companies provide us with many examples of how to earn and maintain

loyalty, what strategies to used to do that, and also what not to do. Based on that, different

theories and definitions were created. On the other hand, multiple empirical kinds of research
were conducted to find out how customers are responding to the company's attempts to create a

stable, long-term relationship.

My opinion is that customer loyalty is still very present, but it just has many more obstacles than

it did before. Digital marketing enabled companies to share their background story, along with

their products (with complete information) to consumers from all around, rather than to just

regional customers. To a customer, this means more brand opportunities for the same category

and it will increase one brand's competition. Because of this, it is very difficult to maintain

current customers and depend on their regular purchases. Depending on the company's product (a

type of good or service), their target audience will be a smaller or larger group of people with

different characteristics, desires, and needs. If the target group is small (for example women over

60), and the company is regional, it is much easier to build a long-lasting relationship with the

customer. On the other hand, if the company is extensive and international, with many same-

quality and same-price competitors (for example fashion industry) it is nearly impossible to

create a single-brand customer. There is always the possibility that the customer will return and

perform a purchase again, but the question is how often will he do that, and is it enough revenue

to cover the costs of marketing strategies?

Another change in the ‘new world’ is that customers have demand bigger than ever, and because

of the availability of the information of every brand/category and their competitors on the

internet, it is more difficult than ever to please them regularly, and in the end to earn their

loyalty. Because of that customers have the ability, more than ever, to split their purchase into

three stages – information, search, and purchase. This means, that they have the option to found a

product from the same category that is more suitable for them (cost, delivery, etc.), which can

mean the loss of revenue and customer for one brand, from the competitors.
As mentioned in the text above, trust plays a big role in customer loyalty. When we look at the

many recessions of trust, in the consumer-production relationship, it is not much of a surprise

that decreased customer loyalty is a popular topic today and it is noticeably more and more.

In today's age, we can see less and less loyalty between customers and the brand. Aside from the

recession, there are many more factors that are contributing to this. I spotted new phrases for

customer loyalty in many articles and papers, such as total abandonment of the concept, or that is

now just a myth.

Another interesting finding was that need for customer experience is increasing rapidly over the

years. Besides this, customers want more and more to engage in that experience. This indicates

the close relationship between those two.

The best approach, personally, to not just gain, but to improve the relationships with customers

daily in network marketing. When we are talking about customer experience/engagement, multi-

level marketing is a great tool to achieve those customer's demands. Understanding, not every

company can implement this method of business.

 2. Moving away from producing goods towards staging experiences – is it the way of the

future or is it all just hype? And exactly what does “experience” mean? Could a candy

bar or milk carton be an experience? When does a mere product become an

“experience”?

The customer experience (CX) indicates every interaction between customer and brand. It

represents the customer's overall viewing of one company from the first contact with the

company to their loyalty. The customer who had a pleasant experience is more likely to purchase

again, and potentially to becomes a loyal customer.

The research was conducted about it in 2018, and the 2,000 responders (UK, US, Canada,

Australia) were customer experience professionals. They were discussing their company's CX,

goals, strategies, and methods. For the research, responders classify themselves into one of the

four frames – ignore 10% (companies that think that customer experience is unimportant, or just

not that important to spend money on it), novice 40% (companies that value customer

experience, but they are just taking the first steps toward creating the CX strategy), competent

38% (companies that provide with high-quality experience), and mature 12% (very involved in

customer experience strategy, and customer feedback represents the base of company's

decisions). They discovered that companies that have very developed CX have more significant

revenue. The mature companies' most important goal is providing a good CX, rather than any

other. As the maturity level grows, the center is no longer on gaining new customers, and

increasing sales, sooner on the overall experience. Also, mature companies are customer-

oriented, rather than profit-oriented, like companies with undeveloped CX.


Companies that have formed CX are most likely to use more traditional methods, such as direct

communication with the customer, or market research. This can include surveys or calls directed

towards customers. These tools are used to fully understand the customer as an individual, but

also to obtain their feedback. As mentioned, more mature companies are more devoted to

customers' feedback. The feedback for them is the first step towards creating a strategy or

making any decision.

Because it is the main priority, many mature companies' employees are included in developing

the strategy (about half the employees), and they tend to invest much more money than the

companies that are not so CX oriented. According to this research, mature companies are

spending over half of their annual budget on customer experience.

There is a wide range of possibilities to be used to generate the most enjoyable customer

experience. The company's brand is a very important element for the overall experience. It's

divided into various sub-sections like names, logos, trademarks, labels, tags, visual design,

shopping experience, quality, customer service, and so on.

Customer experience phenomenon is going to extreme very fast. Some companies are going an

additional mile for their customers, and they are not just trying to understand their lives,

relationships, opinions, but using various digital tools, they are trying to live that life. This way,

they will place themselves into their minds and build a complete picture of their desires, or

expectations. By observing customers, companies can assume how is to be that person. Using

this method of observation and later interaction and questioning, companies can understand their

audience better. Observation can also imply in customers’ relations with other brands. Customer

service should always be available with high-quality service because in this thriving scheme it is

vital.
Every feature of the overall experience needs to be sharp and complete, because customers now

have a choice, and they want to get the best value for money, so if they get disappointed over

some little thing, in today's customer behavior we see that more and more customers will

immediately start looking for an alternative.

Because of the pandemic that struck the world in 2020, people did most of their shopping online.

Because the businesses didn't run, as usual, companies needed to take some extreme measures,

and implement adjustments to marketing strategy. Thanks to technology, precisely social media,

information can spread faster than ever. This has become one of the most powerful advertising

tool in today's world. Providing customers a great customer experience today can bring

companies loyal customers, and with the help of social media, a loyal community. According to

Chen's study, 84% of millennial customers don't trust advertisements anymore. So social media

presence and experience are crucial with these target audiences for example. Customers are used,

to be able to contact the business via many new different forms of communication, therefore it is

very important for the overall experience that companies are constant in replaying to those

customers (customer service).

References on companies are all over the internet, and it can improve business by night, but also

it can destroy them. Review Trackers research states that '94% of customers say a negative

online review has made them avoid that business'. So, ignoring your customers and providing

them with a bad experience is no longer an option. Overall, the customers will now address the

third party. So, besides products and prices, buyers will now also evaluate services and user

experience.


User experience applies to any interaction or experience that customers (users) have with a

certain brand. Product experience is one of the most important aspects of user experience (and

overall customer experience), and it refers especially to the experience that people get when

using the product. So, product experience is a customer's perception of the product, but also of

the company’s engagement with that product which involves product development, such as new

features, or improving existing ones. Every aspect of one product is some portion of the

experience. This is a customer-centric approach with a direct impact on customers' behavior, and

it is based on the continuous usage of a product over some time by the consumer. If consumers

stay loyal to the company's product/products, not only that they will purchase it more, but they

will start to discover new features and will find more value in the product, or the brand. If

product experience is implemented in the right way, users will understand the true value of the

product/brand immediately.

The only difference between customer and product experience is that CX is focused on the

overall experience that customers had when associating with the company's many touchpoints,

and PX is about their understanding of the product. These two are in tight connection, and

dependable to one another, because the easiest way to improve customer experience is to provide

an exceptional product experience.

Marketers figured out how to make one simple, every-day product an experience, using various

online and offline tools. As mentioned, high-quality customer service plays a crucial role when

trying to provide the best experience. Also, marketing the product is a make or break move.

Marketers are giving nowadays opportunities for customers to try products before purchasing,

such as free trials or freemium products. This empowers customers to make a decision based on

that personal experience, and not the previous experience with that product from another source,
which showed as the most common factor when choosing purchase. On the other hand, this

approach can have a boomerang effect, because if customers don't like the product, the bad word

will spread and it will work against the company. This is another example where a well-put

product experience strategy can help, and repair this situation. If the experience is unbelievable

for the customers from the start, it is more likely that they will purchase that product. That first

impression is crucial when trying to promote the product, and a memorable introduction of it to

customers can update the product experience drastically. For example, a course or presentation

for customers of how the product operates, and with all of its characteristics described, or by

assigning a task that customers are required to complete (learning by doing). Another great

method of making a simple product an experience is managing the feedback. To satisfy

customers, companies need to pay closer attention to their needs. Customers will provide a clear

picture in which direction the company should go. And the last most important thing when trying

to make a product to experience is monitoring the customers, as already explained.

Important findings related to the importance of customer experience:

- 1 in 3 customers will leave a brand they love after only one terrible experience

- 49% of the customers, after receiving CX that is more personal, are more likely to make

an impulsive (emotional) purchase

- Customers are willing to pay a premium price (to 18%)

- Companies that are rated with high CX score, have customers that spend 140% more, but

also they remain loyal to 6 years

- Satisfied customers will bring 2.6 times more revenue than somewhat satisfied customer,

and 14 times more revenue than a somewhat dissatisfied customer

 - American Express research states that 86% of customers are prepared to pay more for a

better experience

In conclusion, customers are getting 'spoiled' more and more. Every one of them is surrounded

daily by many brands and advertisements, so for a company to create a loyal relationship, it

needs to provide a personal experience. Customers want to feel special amongst the brand.

Expectations that customers have are constantly changing, and those changes are also based on

experiences with other companies.

The customer experience was always present, but the companies only recently revealed just how

much it is essential for their business. During this research, I obtained information from many

kinds of research that show that experiences become more powerful than the product itself in

nowadys world.
 References

- Sparks, L. & Wright, C. (1999). Loyalty saturation in retailing: exploring the end of
retail loyalty cards, International Journal of Retail & Distribution Management
https://www.researchgate.net/publication/242027015_Loyalty_saturation_in_retailing_Ex
ploring_the_end_of_retail_loyalty_cards

- Bolton, R. (2000). Implications of Loyalty Program Membership and Services

Experiences for Customer Retention and Value, Journal of the Academy of Marketing
Science
https://www.researchgate.net/publication/237329729_Implications_of_Loyalty_Program
_Membership_and_Service_Experiences_for_Customer_Retention_and_Value

- Siemieniako, D. (2010). Understanding loyalty from a customer’s perspective, Journal of

Customer Behavior (Report No.3).
https://www.ingentaconnect.com/content/westburn/jcb/2010/00000009/00000003/art000
06;jsessionid=2d7pum0udqcfd.x-ic-live-02

- Chen, Y. (2015). 84% of Millennials Don’t Trust Traditional Advertising.

https://www.clickz.com/84-percent-of-millennials-dont-trust-traditional-
advertising/27030/

- CX stats and trends, Hojtar. (2018). https://www.hotjar.com/customer-experience/trends-

and-stats/

- Hykenm S. (2018). Customer experience is the new brand.

https://www.forbes.com/sites/shephyken/2018/07/15/customer-experience-is-the-new-
brand/?sh=66cf162f7f52

- 2018 ReviewTrackers Online Reviews Stats and Surveys, ReviewTrackers.

https://www.reviewtrackers.com/reports/online-reviews-survey/
- 5 Reasons why customer experience is the pulse of every business right now, Trustpilot.
https://business.trustpilot.com/reviews/learn-from-customers/5-reasons-why-customer-
experience-is-the-pulse-of-every-business

- What is Customer Loyalty: Definition and Guide, Sendpuls.

https://sendpulse.com/support/glossary/customer-loyalty