Blog article

Brand Loyalty and CVML Programs That Help to Build Long-term Relationships

19 Feb 2021


In marketing, brand loyalty consists of a consumer's commitment to repurchase products or services and thus to continue to use a brand.

It can be demonstrated by actions like repeated buying or through engaging in other positive behaviors such as word of mouth advocacy. Brand loyalty manifests itself in long-term customer relationships which give the service provider the chance to create a union built on delivering lasting value to the end-user.

The longer the relationship lasts, the stronger the commitment and the likelihood of repurchase is.  

In short, if you want brand loyalty then your marketing goal is to build long-term customer relationships. So, as marketers, we need to look at how relationships work (don’t worry, we’ll stick to the telco market here; any marriage guidance advice included in the following paragraphs is accidental and we take no responsibility if you apply it to your personal life!) Relationship theories are numerous and, predictably, they vary but all have one thing in common: Relationships are NOT static. We continuously evaluate their benefits and costs and even the best relationships in the world require constant attention, nurturing, and work. Doubt this? Ask your spouse if you’re paying enough attention to him/her.

When setting up Customer Value and Loyalty Management (CVML) programs that aspire to build long-term relationships, you need to consider various factors. And, in commercial relationship terms, the starting point is recognizing that an economic relationship is judged in economic terms; success is a matter of profit (rewards) triumphing over loss (costs).

There are three major factors that maintain commitment in relationships to enable this success:

1. Satisfaction

“I can’t get no satisfaction” may be a great song, but it’s a recipe for CVML failure. Subscribers will have a high level of satisfaction with relationships if they have more rewards (companionship, attention, emotional support) and fewer costs (arguments, time). Satisfaction is based on a person’s idea of how much reward they deserve to receive in a relationship and is often compared to what they received in previous relationships. Comparison Levels are closely linked to a person’s self-esteem. In the case of a telco/customer relationship, the level of spend is a flag. The subscriber with high spend will have higher expectations of rewards in the relationship and therefore demands special treatment if he or she is to be retained. 

As communications service providers (CSPs), there’s a lot you can do here. Take into consideration the segmentation of your subscribers based on value, on tenure, on behavioral, and other factors. Conduct market research to understand expectations.

Here is an example of our strategic plan for an engagement program that ensures we reach maximum satisfaction and work a towards long-term relationship:

Main/most common segmentation criteria we use to maximize satisfaction:

2. Comparison

The ‘Comparison Level’ (as it is technically known) for alternatives concerns a person’s perception of whether other potential relationships (versus staying on their own) would be more rewarding than being in their current relationship. Generally, people will stick to their current relationships only for as long as they find them more profitable than the alternatives. So, as a CSP, you have to continually prove to your subscribers that being in a relationship with you is beneficial to them.  

3: Investment 

Investment refers to the number of resources, both tangible (for instance, money or possessions) and intangible (like happy memories), that people will lose if they leave relationships. The bigger the investment (the greater the benefits accrued in the relationship), the more likely people are to stay in the relationship. 

For telcos, this means thinking about delivering and emphasising tenure-related benefits and developing loyalty programs that remind customers to invest (e.g. via redemption, tenure, spend).

How do you do this? Well-planned lifecycle-driven CVML programs that take into consideration lifecycle factors, customer attributes and that maximize offer acceptance are some of the keys to success and to building commitment

Identifying key customer attributes that we use to build customer journeys is essential for a CVML program that maximizes all 3 factors influencing commitment:

We (at Evolving Systems) can help you to build brand loyalty via a powerful CVML(CRM) program. Our high-level approach is outlined in the diagram above. If you’d like to discuss this further, please contact us.

19 Feb 2021