Client loyalty

Customers are more likely to remain loyal to a service provider if they perceive that it has dealt well with their problems or complaints in the past.

by Journal of Service Research
Last Updated: 23 Jul 2013

The lack of a 'critical incident' (in which a complaint or problem was handled badly) emerged in this study as the biggest single reason for customers to stay with a company. Long-term customers also expect to get preferential treatment over new customers.

Managers should, therefore, work hard to build trust, satisfaction, familiarity and a feeling of comfort with their customers; they should also recognise the importance of history. In some cases, customers want to avoid the cost and hassle of moving to another provider.

Providers can make the process of moving more complex and difficult by the cross-selling and strategic bundling of their products. Finally, the ability of frontline staff to create social bonds with customers is a critical factor in retaining customers. Managers should track customer preferences data and reward employees for using customers' names.

Back from the brink - why customers stay,
Mark Colgate, Vicky Thuy-Uyen Tong, Christina Kwai-Choi Lee and John U
Journal of Service Research, Vol 9 No 3, February 2007

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