Companies spend a lot of money to improve the expansion of marketing and sales and to acquire new customers. However, it should not be neglected to think about concepts at an early stage to maintain the existing customer base in the long term.
The model presented below distinguishes between 5 different types of loyalty. These types can be used to examine the influence on the repurchase rate. It often makes more sense to woo existing customers than to constantly search for new buyers. For this reason, approaches based on systematically Existing customers to the company.
However, not every type of loyalty is equally strong in all business areas and the influence on the repurchase rate varies. Some dimensions of customer loyalty work extremely well in product sales, but are less important in service. Other aspects, on the other hand, can be effective in the B2C environment, but do not work for business customers.
Types of customer loyalty
- Affective customer loyalty - Affective Commitment
- Economic customer loyalty - Economic Commitment
- Normative customer loyalty - Normative commitment
- Forced customer loyalty - Forced Commitment
- habitual customer loyalty - Habitual Commitment
Affective Commitment
Affective Commitment describes the customer's emotional attachment to a company. This dimension is mainly expressed through strong brand loyalty.
Emotional loyalty to a company plays a particularly important role in product sales and has a very positive influence on the resale rate.
Building a strong brand therefore pays off when selling primary products (an example would be the long queues in front of the Apple Store when a new product is launched), although the necessary investments are generally higher here than in service.
Interestingly, this type of bond plays a subordinate role in the service sector. The results of the studies analyzed suggest that there are few emotional ties between providers and customers when purchasing services, especially in the industrial environment. In the After-sales area other types of attachment are therefore more likely to be decisive.
Normative commitment
Normative commitment describes the loyalty of a customer to a company based on shared values and norms.
Current studies discuss the trend that customers also want to express their values and opinions through the purchase of products and services.
According to various researchers, they therefore focus on brands that represent their values. However, such value-related ties cannot be empirically proven in the industrial environment, neither in the sale of primary products nor in the sale of services.
This category of commitment is only relevant in the private sphere. In companies, purchasing guidelines and economic frameworks govern the majority of purchasing decisions and normative considerations are generally ignored as long as the partner does not massively trample on applicable laws and regulations.
Economic Commitment
Economic Commitment describes the loyalty of a customer to a company based on economic considerations. For example, a change of provider can result in costs for finding a new provider or contractually agreed termination costs.
Economic considerations and dependencies are one of the most important criteria for repurchase decisions in the after-sales sector. This is because in the B2B environment you are more likely to meet customers who are very familiar with your product range and cannot be dazzled by marketing measures.
That's why it's worth it, Lock-in effects for the customer in order to increase the switching costs for them. This strategy also makes sense in business with primary products, but has a much smaller effect here. The deeper you anchor your services in your customers' processes, the more costly it is for them to switch to the competition.
With simple standard services, on the other hand, you do not create any significant economic dependencies. The order of the day for the successful expansion of the after-sales business should therefore be the development of intelligent, hard-to-copy value-added services.
This strategy also makes sense in business with primary products, but has a much smaller effect here. The more deeply your services are anchored in your customers' processes, the more costly it is for them to switch to the competition. With simple standard services, on the other hand, you do not create any significant economic dependencies. The order of the day for the successful expansion of the after-sales business should therefore be the development of intelligent, hard-to-copy value-added services.
Forced Commitment
Forced Commitment expresses the loyalty of a customer to a company caused by external constraints. This can be caused by structural circumstances (market concentration on a few or only one provider) or customer-related reasons (e.g. distance to available providers).
A bond between customer and company caused by external constraints is a double-edged sword. Although it has a very significant influence on the repurchase rate, it also has a very negative effect on the actual repurchase intention. This means that the customer buys, but does not actually want to.
As soon as he gets the chance to escape from you, he will seize this opportunity. So take advantage of this effect if you can, but don't force it! Unhappy customers are never good for a company in the long run.
Habitual Commitment
Habitual Commitment describes the habitual loyalty of a customer to a company. This type of loyalty is fostered by repeated purchases and use of the range of services offered by the company.
One could actually assume that this point is of particular importance in the case of after-sales services. After all, services are regularly used over the entire life cycle of a primary product.
It would therefore not be surprising if this resulted in a habitual loyalty to a service and this had a positive effect on the resale rate. This effect also exists, but is far less pronounced in the service sector than in the purchase of primary products.
For many customers, services are not as important as they should be and budgets for after-sales services are constantly scrutinized from an economic point of view in annual budget planning. In other words, people often just look at the price tag.
If you want to improve the repurchase rate in your after-sales business by intensifying customer loyalty, you need to focus on the economic bond with your customers. Provide your customers with customized services that other market players cannot easily imitate. Building a strong brand does not have as positive an effect on the repurchase rate as you might initially expect. Nor can you rely on customers buying from you purely out of habit. - Dr. Simon Tonat
Source: A Five-Component Customer Commitment Model: Implicationsfor Repurchase Intentions in Goodsand Services Industries, Journal of Service Research (2015), Timothy L. Keiningham, Carly M. Frennea, Lerzan Aksoy, Alexander Buoye, and Vikas Mittal
