Customer Loyality

Essay by kbingham June 2010

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Customer Loyalty and Lifetime Value � PAGE \* MERGEFORMAT �1�


In the marketing world, the ultimate goal is to win customers by their loyalty. This in turn leads to the long-term profits of a business and is largely accepted by most firms. In this paper I will briefly discuss the research involved by the authors and any business problems related to customer loyalty. I will also address the method of data collection used in the research project and what the researchers concluded in their findings.


In this article titled 'Customer Loyalty and Lifetime Value', Zhang and his partners researched the importance of customer loyalty and how it impacts businesses. Zhang concluded that 'within consumer packaged goods, behavioral loyalty is well understood and is often pursued by marketing managers (Zhang, 2010). He goes on to explain the process as the following.

Consumers will choose a specific brand that result in an acceptable experience.

If the consumer is pleased with the product, they will continue to buy that brand which creates a continual satisfaction of the product and therefore will lead to a 'weak attitudinal commitment' (Zhang). The conclusion of this behavior is that the consumers purchase repetition is not from attitudinal commitment rather it is from the customer's lack of time in looking and researching what the useful alternatives are.

In the study, the authors define the customer's loyalty as 'a customer's likelihood to choose a particular brand with reference to their past purchases'. By this definition, the behavior is made out to be both an attitudinal commitment and something that becomes habit forming.

The authors also touch a little on Customer lifetime Value (CLV) which can be defined as the current value of any potential profits of a certain customer over the lifetime of the customer's relation...