Managing customer loyalty in the automobile industry: two case studies

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Customer loyalty is a concept gaining more and more attention in today's business when loyal customers are considered as essential components to organizational success. Loyal customers tend to purchase more often, spend more money and usually enhance a positive word-of-mouth. Consequently, corporations of today strive to identify and manage effective methods of actively enhancing loyalty, including customer loyalty programs. Automobile corporations operate in an industry characterized by few customer contacts with large monetary value. There are major profit potentials and each customer is worth more than only the sales price for a car. As a result the management of customer loyalty is an essential activity within this industry. The aim with this thesis is to gain a better understanding of how customer loyalty is managed within the automobile industry, more specifically by focusing on the design, implementation as well as the evaluation process. Two case studies of corporations are made based on interviews and documentation. The conclusions drawn from the findings indicate that during the design phase of customer loyalty programs the elements constituting the programs were similar between corporations, nevertheless the utilization of these programs differ. One of the most important tools for corporations is their database containing valuable customer information. When it concerns the implementation of customer loyalty programs, the organizational structures behind the programs differ. Either the organization for loyalty programs is incorporated with another unit or managed by a separate department. Regarding the evaluation, customer loyalty is only mea...