Customer loyalty is determined by a couple of elements: relationship strength, perceived alternatives and the relationship at critical episodes. Over the past period, the relationship in difficult times may have been heavily tested. If we drill down the customer loyalty factors, then we can distinguish transactional loyalty, emotional loyalty, overall satisfaction level and the level of competition.
In this article, I will focus on transactional loyalty. The transactional loyalty is based on facts. Transactional loyalty covers recency, frequency, customer lifetime and customer share. It is based on transactional records /evidence that shows how recent, frequent, long (customer lifetime) and deep (customer share) the customer is with your company.To support this evidence from customer point of view (and help in future negotiations with your supplier), we are busy with the development of a simple (though powerful) overview that will provide you historical evidence in relationship to your supplier. The overview will show the purchase value (price before discount), discount and the actual purchase price categorized per supplier.
To put all information about into a screen interface:
Additionally, you can break down the information per item / assortment (and even cost center / unit) and have the same information related to purchase value, discount and actual purchase amounts.
With the information as described / provided, we think that you as a customer have a good instrument to negotiate with your supplier. Of course, the other elements of customer loyalty are just as important and should not be forgotten.
Do you share with me that we have covered the most important ingredients from transactional point of view?