Businessweek explains us that customer loyalty can be a bad thing at some point, especially in the b-to-b market. Indeed, in order to establish a strong relationship, companies provide to its more loyal customers extra services and better promotions than the average ones. And this fact is more percievable in this economic downturn.
" In this down economy, customers in both B-to-B and B-to-C settings are naturally much more sensitive to economic issues. Furthermore, companies in B-to-B relationships are often more reliant on their vendor partners to help them shoulder this burden. There is nothing inherently wrong with this, and we as managers need to recognize that our job is to meet our customers' needs if we are to deserve their loyalty. But the simple solution to improving customer loyalty in a down market is to offer price deals. In fact, firms that track their customer loyalty can be guaranteed that loyalty scores will increase with each substantial decrease in price all things being equal.
But that's a bad loyalty strategy. No, this doesn't mean we should not find ways to be more efficient so that we can pass cost savings on to our customers. But price-driven loyalty is always the lowest form of loyalty. It means that we aren't offering differentiated value to our customers."
Studies must be undertaken in order to see if customer relationship management efforts, in terms of extra services provided, remains profitable, compare to other customers which would not qualify for these types of programs. Customer loyalty of course must be managed, but in fact, it is not really customer loyalty that might be bad, but more the bid you could give them.
