Do Loyal Customers Buy Differently? Examining Customers’ Loyalty in a Self-Service Setting

Abstract

The purpose of the current paper is to study how customer loyalty varies in time according to customer segments and external factors. In the first part of the paper, the authors have reviewed in a funnel-like manner the relevant literature, starting with relationship marketing and customer relationship management theories, and ending with customer loyalty. To achieve the paper’s research purpose, buying behavior data (recency of last transaction, buying frequency and monetary value spent) from a company’s internal information system was analyzed for 2019 and 2020, respectively. RFM model was applied on the 2019 data and resulted in three segments: heavy, medium, and low users - segments which varied in their loyalty for the year 2020. Based on the obtained findings, the authors concluded that the more intense a customer’s buying behavior is, the higher their probability is of being loyal in the future. A second conclusion assumes that customers characterized by intense buying behavior are less vulnerable to external threats, the Covid-19 pandemic in our case.

Keywords

• customer loyalty
• behavioral loyalty
• relationship marketing
• customer relationship management
• covid-19