Explaining
Loyalty
There are
lots of different reasons why a client remains faithful to a product
or service. Amongst the main reasons of loyalty reseach shows the
following:
1. The
Price. The first
reason for loyalty is the price. However, with current bank services,
research shows that this is not the fundamental reason for choosing
a certain bank.
2. The
Quality. We do
not choose the majority of products and services because of their
price. Even if a product is physically the same, the consumer can
perceive it as being different, as is the case with many detergents
and petrols.
3. The
Perceived Value.
This is the value perceived by the consumer.
4. The
Image. The consumer
is not strictly rational but is usually guided by subjective perceptions,
feelings, emotions and by different personality traits that they assign
to the products or services.
5. The
Trust. Credibility
is one of the fundamental aspects in the evaluation of consumer purchasing
alternatives. We give a special importance to the trust in the services.
The services are intangible and their production and consumption are
produced at the same time. We can try out a car before buying it but
we can't do the same with a dentist. If we need our wisdom teeth taken
out, we can not visit 20 dentists and them opt for the best. If we
want a mortgage we can not try one for a few days as if it were a
car. We have to trust that the certificate the dentist has is authentic,
that he knows what he is doing, that the instruments that he uses
are disinfected, that the anasthetic will work and that he is competent.
6. Habit.
Commodity or the obstacles at the exit are one of the reasons to remain
faithful to a service even if in an artificail way. For example, the
television campaigns know that many subscribers don't terminate their
contract just out of habit. Even when a subscriber complains or asks
to terminate the contract, the company lengthens the process and even
creates obstacles so that many customers remain clients for longer
just because they are obliged to.
7. Conforming
with the group.
Human beings are sociable and many purchases are influenced by social
considerations. Personal relationships, friendships, belonging to
a group, all determine our purchasing behaviour. When a company is
organizing a pary in a club, for example, getting just a few of the
'hip people' to attend supposes a success in itself.
8. Avoiding
risks. Something
that stops a consumer from buying something is knowing the perceived
risks. However, once a client knows our service, changing to a different
unknown company supposes a psychological risk. As a popular saying
claims "better the devil you know than the devil you don't know".
This saying is in favour of trust and against the real or imaginary
risks of change.
9. No other
alternatives. Loyalty
in many cases happens because the consumer doesn't know or have any
alternatives. The increasing number of competitors, especially in
Spain, the country in the world with more offices per 1000 inhabitants,
makes the consumer have many alternatives and therefore there are
less faithful consumers.
10. Monetary
costs to change.
Changing supplier can mean a direct cost. For example, the cost of
changing mortages..
11. Non
monetary costs. Often
the cost is more about the psychological cost, time, effort to carry
out the change.
