Tracking Customer Loyalty

1. Loyalty tracking on time scale: Loyalty can be tracked on linear time scale. This includes preparing time scale graph which shows the loyalty trend of customers in accordance to time.

   The graph is normally created when the supplier evaluates that customer is showing less interest in buying and the time gap between each buy is gradually increasing. When the graph goes from secured to lost stage, it is important for the organization to identify corrective measures to retain the customer back to track.

   When the corrective measure works efficiently the graph again moves towards secured level in the coming future which indicates that the supplier is gaining customer loyalty again and there are fewer chances for the customer to divert to other options.

   This is a simple but powerful technique to track customer loyalty in-house without employing external resources. However this is not an accurate method to track customer loyalty but it shows the trend if the correctives measure taken to retain customer is working efficiently or not.

   Changes in the loyalty is normally seen after tracking loyalty on time scale but the details are not exactly focused and does not accurately provide the actually loyalty variation of the customer to supplier. This process is normally implemented in the initial stages after the supplier identifies that there are chances that customer can divert. If corrective measures are not taken at this stage then it becomes difficult for the supplier to retain the customer.

2. Loyalty tracking on Volume-Loyalty Matrix: Other way to track loyalty is on a matrix called volume-loyalty matrix. This kind of tracking includes determining the loyalty according to the pre-defined matrix quadrants so that the supplier could judge the customer value and accordingly engage corrective actions.

   The quadrant variable could be associated with values like ‘premium’, ‘neglected’, ‘patrons’ and ‘pitfall’. If the customer value remains the same but the customer loyalty travels from neglected to premium quadrant then the customer loyalty is moving in the positive direction and there are chances that it may cause to increase customer value as well.

   If the customer value increases but the customer loyalty travels from premium to patron’s level then it shows that the loyalty is declining and needs attention and corrective actions should be taken to improve customer loyalty.

   If the customer value increases rapidly but customer loyalty travels from premium to pitfall level then it indicates that the loyalty is declining rapidly and serious attention should be taken. Under this condition the loyalty bond gets weakened and customer can divert at any time.

   This is purposeful and powerful tracking method to track loyalty because end-results are focused and the seriousness of whole scenario is clearly visible. This helps the supplier to make strong and focused strategic plans to reclaim customer loyalty.

   Normally this tracking process is implemented under adverse conditions to get satisfactory results. When the tracking on time scale graph does not work efficiently supplier implements volume-loyalty matrix to enhance customer loyalty in an efficient and efficacious manner.

Tracking customer loyalty is very important process that all the organization should implement continuously to track customer buying trend and force them be loyal to them and increase business values and profits.

Authorship/Referencing - About the Author(s)

The article is Written and Reviewed by Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.