The ultimate goal of any business is to attract and retain customers for without customers the business cannot thrive. Satisfying customers without being emotionally connected to them does not add any value to your company. Using TAGGED.com as a benchmark I am going to discuss how our company can better compete in the social networking market with customer loyalty being the top notch.
How to improve customer loyalty
TAGGED .com holds that each customer’s interface with the business overtime determines how the business is perceived and this defines your company to the outside world (Chris, 2011). Having few loyal customers is better than trying to attract more at the expense of the loyal few. When a company has less but loyal customers all its attention is on how to retain them (Zhang & Breugelmans, 2012). The process of trying to attract more customers may lead to loss of some of the loyal customers and getting them back may be impossible. These customers will also recommend our company to their peers. In addition they will also involve us in their other businesses because remember as we maintain them they are also growing and their needs increasing. Our company can create customer loyalty by working on the satisfaction we offer to them by providing them with high quality services. We can only achieve this by creating a good relationship with them so that we know what they want, how they want it delivered to them, and how we can consistently provide services that exceed their needs. Engaging the customers in our decision making to a particular level makes them feel special and part of the company.
How customer loyalty is linked to competitive advantage
As a result of strongly upholding the importance of customer loyalty, TAGGED.com growth rate has been twice that of the popular websites. Following a 6% rise in customer retention, TAGGED.com has increased the worthwhile of an average customer by 30% to 100%. Loyal customers become dependable part and parcel of the company’s sales stream. As these loyal customers talk to their friends about our company’s services and products they are indirectly advertising the company on our behalf. This leads to more customers leaving their previous companies and streaming into the company (Huang, 2011). This automatically will lead to the company making more profits. Loyal customers are also forgiving in case of a mistake is made by the company. It is easy for them to understand that it was a mistake since they have been our customers for long and they know how they are normally treated. Our company will therefore be in a better position to compete in the social network if we work with that top notch customer loyalty criteria. If we satisfy their needs to our outmost level and involve them emotionally to our company, they will become our raving fans. They will end up becoming our branding ambassadors thus bringing in even more customers (Grant, 2010).
How customer loyalty is linked to cost and differentiation advantages
TAGGED. com has been able to enjoy cost and differentiation advantages through creation of customer loyalty (Wang, 2011). This is because the two advantages are based on the customers’ referent products and company. After our company has retained loyal customers it will be able to enjoy cost advantage in that it can lower the cost of production to a given level of quality by use of cheap raw materials and then sell its services and products at the average price of the industry thus earn more profit than its rivals or at a lower price than the average price to acquire market share. In case of price wars, our company will be able to sustain some profitability while our competitors suffer losses. If our competitors are unable to lower their costs then our company will sustain the competitive advantage. Our company will also enjoy differentiation advantage when it has customer loyalty. This is because differentiation strategy is based on the development of the services and products that the customers’ value and that are different or better than those offered by the other companies (Grant, 2010). The value added by this uniqueness of these products will allow our company to offer premium prices for them.
Conclusion
We have seen that TAGGED.com has become a popular social website through the strategy of providing quality services to its customers and in the long run attracting more and more customers. I would recommend that our company joins the loyalty bandwagon and create a good relationship with our customers so as to create customer loyalty that will enable us to fit in the competitive social networking market. Our company will only do this if our customer loyalty is at its top notch.
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Grant, R.M. (2010). Contemporary Strategy Analysis (7th ed.). New Jersey: Wiley & Sons. Pp. 23-109
Wang, J. (2011). "How Tagged Made a Turnaround for Growth". Entrepeneur.
Zhang, J. and Breugelmans, E. (2012). The Impact of an Item-Based Loyalty Program on
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