Jae Ah Ho's Blog

Companies are spending enormous effort and time to build a long-term relationship with frequent customers. Issuing membership cards, designing special deals, and offering tailored customer services are attempts to earn loyalty from those consumers. All corporations strongly believe that achieved consumer loyalty is a key factor to success in the fluctuating economy.

During the recession period of 2008-2010, Lululemon proved that the consumer loyalty was the strongest driving power to let the business actually grow in a competitive market whereas other competitors were having a hard time dealing with the decrease in sales. Also, many corporations which retained consumer loyalty such as Mercedez-Benz and Apple could survive during the economic downturn and bounced back relatively quicker than other ordinary businesses such as GM and Sony. Those products are not even necessary goods, and people have to pay premium price to get those luxury goods. However, loyal customers showed their willingness to pay extra dollars regardless of the economic condition.

In this unpredictable economy, it is crucial for companies to design strategies to increase and maintain customer loyalty in that companies are able to establish a stable business and plan precisely for the future.

Image taken from http://www.searchfuel.com/2010/04/can-social-media-bridge-the-brand-consumer-gap/