Posted in Marketing and Strategy Terms, Total Reads: 333

Definition: Loyalty

Loyalty is showing strong feeling of support and allegiance towards a particular thing or person. All business firms strives to achieve the customer loyalty by not just meeting the needs of the customer but going beyond that and delighting customers through improved customer service and satisfaction. Companies do realize the importance of retaining a customer as acquiring a new customer is a costlier affair. Hence to retain customers, firms provide different loyalty programs.


• BPCL's Petro Bonus fuel card program

• Jet Airways frequent flier

• The Tata Card

• First Citizen – Shopper’s Stop

Customer loyalty

Various customer loyalty programs are offered to customers to increase customer retention. These loyalty programs allow firms to focus on best costumers and improve their satisfaction levels. Increased loyalty results in increased profitability. And the loyal customers become advocates of the brand in the long term.

While designing the loyalty programs few things need to be kept in mind such as the attractiveness of the rewards offered at the same time it should not affect create a dent in your profit margins. These loyalty programs also help in knowing the customer better and it is a way to win back the lapsed customers.

Example of loyalty program

Employee loyalty

Employee loyalty program should also be given equal importance. The value of loyal employees to an organization is huge. Employee loyalty programs should be considered along with employee benefits and incentives/reward system.

A well designed employee loyalty program increases the productivity of employees, increased customer service, reduced employee turnover, improved working environment and better business image. Employee loyalty programs provides an opportunity for employees to become involved in business through

• Listening to the employee’s suggestions

• Bringing in transparency and easier communication between management and employee

• Rewarding employee for their contributions


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