Prospering in Tough Economic Times Through Loyal Customers
In severe economic downturns, only a few business leaders have the courage and wisdom to invest in customer loyalty to increase profits instead of reflexively cutting costs to try to maintain falling profit margins. Moreover, the usual research and advice tends to focus on how companies can effectiv...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Sciendo
2014-10-01
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| Series: | International Journal of Management and Economics |
| Subjects: | |
| Online Access: | https://doi.org/10.2478/ijme-2014-0038 |
| _version_ | 1811272769305837568 |
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| author | Anderson Rolph Swaminathan Srinivasan Mehta Rajiv |
| author_facet | Anderson Rolph Swaminathan Srinivasan Mehta Rajiv |
| author_sort | Anderson Rolph |
| collection | DOAJ |
| description | In severe economic downturns, only a few business leaders have the courage and wisdom to invest in customer loyalty to increase profits instead of reflexively cutting costs to try to maintain falling profit margins. Moreover, the usual research and advice tends to focus on how companies can effectively and efficiently reduce costs in order to survive an economic decline. This study contributes to the literature by offering a fresh look at how best to respond in tough economic times by examining companies who have responded traditionally with cost cutting strategies versus companies who instead have invested in customer loyalty. We make the unique and contrarian argument that the latter strategy can be the superior business strategy, which underscores the originality of this investigation. Thus, the purpose of this study is to highlight why investing resources in creating and retaining loyal customers is the best strategy for companies to survive and prosper in tough economic conditions while simultaneously gaining longer-run competitive advantage. Based on quantitative and qualitative survey research methodology, the study findings identify and explain key customer loyalty measures, including: customization for customers, communication interactivity, nurturing of customers, commitment to customers, customer sharing networks, customer focused product assortments, facile exchanges, and customer engagement. Perceptive company executives will measure, benchmark, and regularly compare their performances on these key customer loyalty measures with different customer groups versus their company's past performances, managerial goals, and competitors, then make appropriate adjustments to retain their loyal customers and prosper during tough economic times. |
| first_indexed | 2024-04-12T22:46:18Z |
| format | Article |
| id | doaj.art-abd45b37fe624127bb4c3eb903bc1812 |
| institution | Directory Open Access Journal |
| issn | 2299-9701 |
| language | English |
| last_indexed | 2024-04-12T22:46:18Z |
| publishDate | 2014-10-01 |
| publisher | Sciendo |
| record_format | Article |
| series | International Journal of Management and Economics |
| spelling | doaj.art-abd45b37fe624127bb4c3eb903bc18122022-12-22T03:13:32ZengSciendoInternational Journal of Management and Economics2299-97012014-10-01411769110.2478/ijme-2014-0038ijme-2014-0038Prospering in Tough Economic Times Through Loyal CustomersAnderson Rolph0Swaminathan Srinivasan1Mehta Rajiv2LeBow College of Business, Drexel UniversityLeBow College of Business, Drexel UniversitySchool of Management, New Jersey Institute of TechnologyIn severe economic downturns, only a few business leaders have the courage and wisdom to invest in customer loyalty to increase profits instead of reflexively cutting costs to try to maintain falling profit margins. Moreover, the usual research and advice tends to focus on how companies can effectively and efficiently reduce costs in order to survive an economic decline. This study contributes to the literature by offering a fresh look at how best to respond in tough economic times by examining companies who have responded traditionally with cost cutting strategies versus companies who instead have invested in customer loyalty. We make the unique and contrarian argument that the latter strategy can be the superior business strategy, which underscores the originality of this investigation. Thus, the purpose of this study is to highlight why investing resources in creating and retaining loyal customers is the best strategy for companies to survive and prosper in tough economic conditions while simultaneously gaining longer-run competitive advantage. Based on quantitative and qualitative survey research methodology, the study findings identify and explain key customer loyalty measures, including: customization for customers, communication interactivity, nurturing of customers, commitment to customers, customer sharing networks, customer focused product assortments, facile exchanges, and customer engagement. Perceptive company executives will measure, benchmark, and regularly compare their performances on these key customer loyalty measures with different customer groups versus their company's past performances, managerial goals, and competitors, then make appropriate adjustments to retain their loyal customers and prosper during tough economic times.https://doi.org/10.2478/ijme-2014-0038customer loyaltycustomer satisfactioncustomer relationship management |
| spellingShingle | Anderson Rolph Swaminathan Srinivasan Mehta Rajiv Prospering in Tough Economic Times Through Loyal Customers International Journal of Management and Economics customer loyalty customer satisfaction customer relationship management |
| title | Prospering in Tough Economic Times Through Loyal Customers |
| title_full | Prospering in Tough Economic Times Through Loyal Customers |
| title_fullStr | Prospering in Tough Economic Times Through Loyal Customers |
| title_full_unstemmed | Prospering in Tough Economic Times Through Loyal Customers |
| title_short | Prospering in Tough Economic Times Through Loyal Customers |
| title_sort | prospering in tough economic times through loyal customers |
| topic | customer loyalty customer satisfaction customer relationship management |
| url | https://doi.org/10.2478/ijme-2014-0038 |
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