Segmenting by Loyalty Levels

Loyalty/Relationship Segments.

Relationship segmentation is based on customers’ perceptions of their relationships with an organisation and their behaviour within that relationship.

Premium/Hard core loyalty – These are consumers with undivided loyalty to one brand

Soft core loyalty – Buyers with divided loyalty between two or more brands.

Latent loyalty – A high attachment towards the product combined with low repeat purchases.  Perhaps the lack of (current) availability or a partners preferences, restrict the amount that is purchased

Passive or Inertia loyalty – a low attachment to the product and high repeat purchases. Is the customer staying with the organisation by choice or exhibiting passive loyalty? Passive or Inertia loyalty can be caused by:

  • Limited choice: Where there is only a single choice of retailer. Or forced choice situations like blades for your safety razor.
  • Habitual buying: When you buy your lunch from the café in or near to your college, you do so because it is convenient – not because you are loyal. A similar case is travelling by the same train every day.
  • Risk minimisation: This is typical of products which you buy on the advice of some one else’ advice like medicines, or you continue using a brand because you are concerned about changing.
  • Switching hassles: You would like to switch brands but you feel the cost of switching over is way too high and feel that the benefits are not yet big enough.
  • Lack of a decent alternative: When you use Australia Post, are you doing so out of habit?

No loyalty/ Shifting loyalty/Switchers – These buyers demonstrate no brand loyalty at all and will switch without any concerns.   The various loyalty segments emphasise the point that customer relationship segments and levels are not equal.

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