When marketers study brand loyalty, they believe that it is not enough to classify someone as being loyal to a given brand by simply looking at the sequence of purchases they make in a product category. Rather, the consumer must also provide a rationale or reason for why they consistently buy the same brand. Why is this requirement needed?
Shugan says that many so called loyalty programs are shams because they produce liabilities rather than assets for the company. Exactly what does he mean by this, provide an example?
Shugan also notes that a true loyalty program “invests in the customer”. What does he mean by this and how might United Airlines develop a loyalty program which avoids creating future liabilities to the customer?
Why is customer loyalty an important concept for a company to achieve success in the marketplace?