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Engaging your Customers

From the Archive

News created: 26 Jun 2009


Business Customer LoyaltyJana Bowden is a Macquarie University Higher Degree Research graduate who has recently completed her PhD on the development of customer-brand relationships and customer loyalty in the service sector.

Jana believes that the service industry has somehow failed to recognize the power of a strong brand relationship as well as the importance of creating highly engaged and loyal customers. She feels that for too long the sector has focused its attention on rather simplistic measures of customer service perceptions. Jana points out that typically such approaches centre on whether or not the customer was satisfied with the brand that they bought, as well as whether their expectations were met in the first place. “The biggest issue of contention is whether or not we believe that merely satisfying the customer is enough to create passionate, enduring brand loyalty. I would suggest to you that satisfaction is a start, but in today’s highly competitive, globalised environment firms need to look to engage consumers at a deeper level and essentially marry them to their brand.” She believes boardrooms that rely on satisfaction measurement are missing a critical element of customer perception analysis and continue to fail to understand the dynamic process by which customers become engaged with the brands and services that they buy. Jana also suggests that an unwarranted reliance on satisfaction measurement demonstrates a failure to acknowledge the complexity of loyalty development.

Jana argues that despite awareness of the importance of customer loyalty, many firms still take a transactional approach to managing the customer. “We need to move away from this idea that we ‘service’ customers in order to make the sale. It’s not about the sale. It’s about the relationship that the customer has with our brand. What we should be trying to do is to create a consumption experience that is engaging. We should be aiming to develop relationships with our customers that engender passion and stimulate an almost evangelical response to our brand. It’s those deeply supportive, enthusiastic customers that not only spend more on our brand, but who also give us secondary loyalty behaviour benefits like highly positive word of mouth referral.”

It is this lack of an understanding about how customer-brand relationships form as well as the importance of other non-satisfaction elements like commitment, trust and a delighting service experience, which leads firms to continually under perform on the front line. Jana cites a recent service encounter at her favourite retailer Review, “It’s not about the product, in this case the clothes, you expect their styles to be good and the quality to be high, it’s about the service. When the staff personally recognize you, remember your preferences, and engage with you in conversation that’s what creates real loyalty. I trust Review with my time and with my money, but most importantly I trust them with my friends when I recommend their brand.” She believes that it is imperative that firms develop a systematic process for training and developing staff in a relational orientation in order to maintain a competitive edge in the market. “Satisfaction measures don’t hold the key to understanding the complexity of loyalty formation across different segments of customers. Companies need to recognize the real value of customer engagement by exceeding expectations and building relationships based on commitment and trust.”

Jana’s research identifies six key determinants of loyalty in the hospitality industry, which include customer satisfaction, emotional and utilitarian commitment, trust, customer delight and involvement. Jana then examines the way in which these constructs jointly contribute in the loyalty development process for customers who are new to a service brand versus those who are regular users of a service brand. Her understanding of the development of service loyalty gives an insight into opportunities to improve financial performance through marketing initiatives which are aimed at fostering strong customer-brand relationships. The effects of customers’ levels of service experience on the prominence of these determinants in the development of loyalty are also analysed. Such an analysis broadens an understanding of the process of loyalty formation over time for different segments of customers.

The results of this research provide important insights into the relational constructs that drive engagement with service brands and therefore customer loyalty for different segments of customers overtime. Jana’s results suggest the need for firm’s to look beyond providing their customers with a merely satisfying experience, and instead encourage firms to develop deeper relational ties with customers through other powerful relational mechanisms. The development of a relational model of loyalty, which is sensitive to the complexities of loyalty formation, is essential for the development of effective relationship marketing strategies. Although this study was investigated within the high-end restaurant service sector, the results of Jana’s research suggest wider relevance to other providers within the service sector.

In the past two years, Jana’s research has been published in a range of academic journals including the Journal of Hospitality Marketing & Management, Marketing Theory and Practice, and Marketing Intelligence and Planning. More recently her research has been published in a range of popular press including the advertising industry magazine Admap and BMW’s quarterly magazine Communique. She has presented her research at several respected international conferences in the UK, New Zealand and Argentina. Jana is currently employed by Macquarie University as a Marketing Lecturer in the Department of Business where she teaches Services Marketing and Marketing Fundamentals.

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