CHAPTER 1
INTRODUCTION

1.1 INTRODUCTION
Customer loyalty is both an attitudinal and behavioral tendency to favor one brand over all others, whether due to satisfaction with the product or service, its convenience or performance, or simply familiarity and comfort with the brand. Customer loyalty encourages consumers to shop more consistently, spend a greater share of wallet, and feel positive about a shopping experience, helping attract consumers to familiar brands in the face of a competitive environment.
Types of Loyalty
To understand customer loyalty one must recognize there are different types and degrees of loyalty. There is monogamous loyalty and there is polygamous. There are also behavioral and attitudinal aspects. A look at these concepts will clarify what “customer loyalty” really is, and this is important because having a solid understanding of the concept is critical if one hopes to design a reward program where loyalty enhancement is the primary objective.
Monogamous vs. Polygamous Loyalty
We live in a world of polygamous, not monogamous loyalty. For example, a person might shop at Safeway, Thrifty Foods and Save-on-Foods and unfailingly shop at all three. The person is then loyal to them, but not to others, and yet 100% loyal to none. In their book Loyalty Myths, Keiningham et al. (2005) suggest that “loyalty can in part be thought of as the probability a customer will purchase a brand on any particular purchase occasion. For example, a customer may tend to purchase Brand A 70 percent of the time, Brand B 20 percent, and Brand C 10 percent of the time” . The point here is that, in the real world, 100% loyal customers are rare. In the majority of cases, attempting to make customers completely loyal is unrealistic. A more realistic goal for businesses is to make customers as loyal as possible – to maximize customer share of wallet,