Exploring How Customer Loyalty Promotes Sustainable Business Growth in the B2B Context

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TABLE OF CONTENTS

CHAPTER 1: INTRODUCTION1

1.1Background1

1.2Problem Statement3

1.3Research Aim4

1.4 Research Objectives4

1.4Research Hypothesis5

1.5Scope5

1.6Rationale6

1.7Methodology7

1.8 Dissertation Outline7

1.8Conclusions & Recommendations8

CHAPTER 2: LITERATURE REVIEW9

2.1.Introduction9

2.2.The Concept of Loyalty9

2.3.Loyalty as Strategy10

2.3.1 Hedgehog Theory11

2.4.Effect Factors of Customer Loyalty12

2.5.Previous Research on Customer Loyalty13

2.6.Customer Satisfaction14

2.6.1 SWICS Model (Swiss Index of Customer Satisfaction)16

2.7.Service Quality17

2.8.The link between Satisfaction & Loyalty20

2.9.Customer Loyalty Programmes21

2.10. The Link between Loyalty and Organisational Performance22

2.11. The 'Value Add' from Effective TQM & CRM approach24

2.11.1 Total Quality Management (TQM) Approach25

2.12. Rhetoric vs. Reality26

CHAPTER 3: METHODOLOGY28

3.1.Introduction28

3.2.Research Methodology28

3.3.Data Sources29

3.4.Selecting the sample29

3.5.Questionnaire design29

3.6.Materials30

3.7.Qualitative & Quantitative30

3.7.1.Semi structured qualitative questionnaires31

3.7.2.Face to Face Questionnaires31

3.7.3.Quantitative Questionnaires31

3.8.Statistical Analysis - SPSS31

3.8.1.Descriptive31

3.8.2.Inferential32

3.8.3.Hypothesis Testing32

3.8 Analytical Model32

3.9.Reliability, Validity & Limitations32

3.10 Research Plan34

3.11 Conclusion35

REFERENCES36

FURTHER READINGS41

CHAPTER 1: INTRODUCTION

Background

In today's competitive environment sustainable business performance and growth is vital. Customer Loyalty is arguably the single most important catalyst to sustainable performance and growth. Many organizations are embracing the need to take a customer centric approach with the implementation of such concepts as TQM, CRM, quality systems etc. The growth of business depends on improving the customer loyalty behaviour. Companies who represent high customer loyalty experience faster business growth in comparison to companies with low customer loyalty. There are many business growth models which exist but they all are dependent on one factor which is responsible for increasing company value and driving business growth which is only dependent on customer loyalty.

Customer loyalty is defined as the degree to which customer share positive views about the company and they remain with buying products for that company. Loyalty deals with retaining the customers so they can remain loyal to the company. Loyalty of customers can be measured by making smart decisions for the success of business for the company. Through customer loyalty companies can accelerate business growth and develop further strategies which can benefit the business for the company. Research on brands, relationship marketing, satisfaction, customer value and direct selling indicate that customer loyalty helps in increasing the financial performance of the company is beneficial for the firm. Kotler, Armstrong (2001) write, customers are the most important asset to an organization. Recent customer equity and relationship emphasis demonstrates that the value of the firm lies in the long term value of its customers rather than its brands (p. 71). Based on this thinking, it should be considered that he companies should focus on CRM and retention of customers in order to increase profit for long term.In order to retain customers, it is important to know why customers are leaving. It results in losing future profit making potential and as a result bad experience may exist that they will share with their colleagues, and that may spur additional defections. Customers are also considered as those who provide business to the new firms. In addition this causes other people to follow them if they like (pg 109). But all customers can't be saved, nor should they. Some customers are such high maintenance clients in relation to the profit margin generated that companies would be better served severing relations with them ...