Chapter 10

Customer Loyalty

Incentives for long-lasting fidelity

A man walking out of a retail store but with a string attached between him and the sales representative standing behind a counter inside the store. The store’s signboard and the shopping bag carried by the customer read: Welcome back.

The pattern

In the Customer Loyalty model, customers are retained and loyalty is achieved by providing value over and above the basic products or services (e.g. through incentive-based programmes). The goal is to develop a relationship with customers and foster their loyalty by rewarding them with special offers or discounts. In this way, customers are voluntarily bound to the company, which discourages them from opting for competitors’ products and services and thus protects the company’s revenue.

Today, a card-based loyalty programme is generally the principal means of maintaining ...

Get The Business Model Navigator, 2nd Edition now with the O’Reilly learning platform.

O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.

Start your free trial