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Loyalty Management

15 January, 2016 - 09:19


  1. Understand the value of customer loyalty.
  2. Distinguish attitudinal loyalty from behavioral loyalty.
  3. Describe the components of a successful loyalty program.

It’s 8:00 p.m. and you’re starving. You open the refrigerator and find a leftover chicken breast, half an onion, and some ketchup. But what can you do with these ingredients? You could search online for recipes that contain them, or you could post a question about what to do with them at a Web site like

Companies like Kraft build Web sites such as in order to create the types of communities we discussed earlier. If you posted your question at, you might have an experience like one woman did—in 24 hours, 853 people viewed the question, and she had 22 answers to choose from. Another question had 3,341 viewers over 10 days. Why has Kraft’s Web marketing team worked so hard to create an environment in which people can do this?

One important reason is loyalty. Kraft wants loyal customers—customers who buy Kraft products instead of other brands at every opportunity, who recommend its products to their friends, and are willing to pay a little more to get Kraft quality. Early research on loyalty showed that loyal customers were less expensive to market to, more willing to pay a premium for a particular brand, more willing to try new products under the brand name, more likely to recommend the brand to their friends, and more willing to overlook a problem related to the brand. 1 That said, more recent research shows that the benefits that come from loyal customers are not automatic and that it takes careful management for those benefits to be sustained. 2

Loyalty has two dimensions. One dimension of loyalty is behavioral loyalty, meaning that the customer buys the product regularly and does not respond to competitors’ offerings. The second dimension is attitudinal loyalty, which is the degree to which the customer prefers or likes the brand.