The Customer Loyalty Theory


Maintaining customer loyalty is obviously a key goal for any business. Loyal customers mean a reliable revenue stream and a sustained profit. Not surprisingly, then, the subject of how you maintain customer loyalty has been one that many researchers have looked into. If you're a business owner or manager, there are a variety of theories on customer loyalty that you should be aware of, as building a base of loyal customers is key to the growth of a company.

Customer Satisfaction

  • The first step towards building a base of loyal customers is to improve the satisfaction that customers have with your products and services. Experts generally recommend performing a standardized survey of your customers using questionnaires. The process of improving customer satisfaction is continuous. Asking customers what they would like to see improve, making improvements and then asking again is all part of the process. In the end, satisfied customers are loyal customers.

Expectation Confirmation

  • The process of expectation confirmation is another key to customer loyalty. Customers who are loyal to a company develop a certain idea of quality and service that they expect to be confirmed. As long as their expectations continue to be confirmed, they be loyal. Companies lose long-term customers when they cease to meet the expectations that they have built up over time. As a result, reliability and consistency are necessary to maintain loyalty.


  • Trust is a consideration similar to expectation confirmation, but with more of an ethical dimension. Customers will be more loyal to companies that they feel match their own ethical concerns. This involves not only how the company deals with their customers, but their employees as well. By feeling that they can trust a company, in the sense that it has reliable ethical values, customers will have an additional reason to build a long-term relationship


  • A key challenge in maintaining loyal customers is how a business balances this concern with the need for growth. There will always be some tradeoff between the strategies that are necessary to grow a business and build its customer base and those that focus solely on maintaining older customers. It can be hard to maintain consistency when a business has grown to a significant degree. Negotiating this balancing act is a key management skill.

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