Marketing Advisor Update

Sales and marketing tips, insights and advice for service businesses amd companies selling complex or technical products.

Monday, January 23, 2006

Getting more Loyalty from clients

Did you know there are 4 different types of loyalty? The good news is that you can attract more clients by understanding why clients become 'loyal'. The 4 types of loyalty are:

1) Contractual loyalty
2) Transactional loyalty
3) Functional loyalty
4) Emotional loyalty

A brief explanation of each:

Contractual Loyalty
Is based around a formal agreement, or a contract. (Pretty obvious heh!) It is important here to realise that your clients loyalty can only be as good as the contractual terms. Some people may say this is not loyalty at all. (See Emotional Loyalty).

Transactional Loyalty
This type of loyalty is based on the clients perception of value you offer for that particular transaction. Like a doctor recommending a drug, or an audiologist recommedning a certain brand of hearing aid, this loyalty can be switched at a moments notice if your client thinks they will get a better deal elsewhere.

Functional Loyalty
If your client loves the features of your product or service, and they prefer to buy from you because of that, then you have Functional Loyalty (based on the functionality of the product/service)

Emotional Loyalty
This is what most business owners hope to achieve. Clients who love their services or products so much that they simply don't like dealing with another supplier. Your client 'feels' a bond with your business/product/service/people.

When it comes to marketing your service business you can create certain marketing tactics to attract clients in each of the loyalty 'quadrants'. For example, by offering extra value for every transaction you can satisfy those clients seeking Transational Loyalty. But don't forget to create unique services that will generate Functional Loyalty. And be sure to really engage with your clients to create clients with Emotional Loyalty.

The bottom line is that businesses need clients with all four types of loyalty. This spreads the risk of client defections and maximises growth opportunities.


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