Loyalty and competition for company

Loyalty and competition

The search for differentiation is at the heart of the strategy of all companies. This is made inevitable by the current economic context, marked by very strong competition between players and by the regular arrival of new entrants on the market. A company that wants to develop its growth on a solid and sustainable basis must look for ways to differentiate itself from its competitors.

These means are numerous. One of them is the price. But price differentiation is sometimes difficult to achieve, especially for companies with low margins. This is why more and more companies are relying on satisfaction to differentiate themselves.

Price is far from being the only factor of satisfaction. What makes a customer loyal to a company is not only the price/quality ratio, although this is important. Why? Why? Because a company does not only sell products, it also provides services. The quality of these services is crucial to satisfaction.

A company that offers its products at higher prices than the competition but with better customer service can win consumer preference. Companies that succeed in gaining a foothold in the market are those that make satisfaction a key element of their strategy. We will then have the opportunity to see a concrete example with the case of Apple, which has perfectly succeeded in building customer loyalty while offering very high prices compared to the competition.

Creating a lasting relationship with customers has many advantages for a company. In a context marked by fierce competition, globalization and consumer volatility, loyalty is an essential strategy to consolidate market share and develop the company's business. We will detail here dissolved why loyalty allows us to stand out and face the competition

First of all, it is worth recalling that it is cheaper to retain an existing customer than to acquire new ones. Building customer loyalty, whether through loyalty programs or various financial benefits, has of course a cost. But this cost, which should no longer be considered as an investment, is much lower than the cost that the company could spend to obtain new customers. As we have said before, the current market makes competition tough, acquiring new customers and market shares will not be easy in large part because of competition. Some companies spend a lot of money on prospecting and advertising in the hope of attracting new customers, but the fact is that the results are not always there. The strategy of acquiring new customers almost always leads to a price war with competitors, which is economically ruinous.

In addition, loyal customers buy more than others. Many studies have shown that, since the loyal customer is a recurring buyer, he will tend to come back more often and spend more in the company than a new customer. Indeed, if the customer is already satisfied with the services provided by the company, he will not hesitate to come back and spend without counting because he knows that he will not be disappointed with what he will get. On the other hand, a non-loyal customer will be more afraid to buy and will therefore spend less money. Increasing customer retention rates is therefore crucial from an economic point of view. Loyalty has a positive impact on the turnover and profitability of companies. Expenses incurred in loyalty actions are therefore quickly

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