Today's discount deal or value for money?

Af Betina Munkholm Johansson, Loyalty Group

PengeThe recession has left its mark in many customers and prompted them to focus on price - whether they are about to choose mobile operator, trade union, bank or food store. Companies cannot ignore consumers' desire for attractive discounts, but a one-sided focus on price does not create loyal customers.

Mikkel Korntved, CEO of Loyalty Group explains:
- Low prices can be a good way to attract customers, but it is the customer experience after the purchase, that creates a platform for loyalty. Companies should therefore focus on how customer relationships can be developed and maintained.

Low prices - and dissatisfied customers?

The joy of the low price disappears quickly if customers experience poor service or not getting the product they have been promised. The consequence is that they leave the company as soon as they can get to it, and share their bad experiences with others.
Businesses are left with a cost of marketing that has not been covered and will find it even more challenging to attract new customers. Mikkel Korntved says:
- Companies should pay more notice to what happens after customers have purchased. Many companies are not aware of what creates value for customers and get them to stay with the company.

Value for money creates loyalty

A Loyalty Group study from 2012, showed a clear correlation between the suppliers ability to create value and customer loyalty.
While low pricing can get fast cash it's the ability to create substantial value that keep the customers, make them come back to spend more and last but not least, recommend the supplier to others.

Focus on profitable customer relationships

The challenge is often that companies focus on what they think is important for customers and not what actually creates value for them. Lars Jepsen, research manager at Loyalty Group says:
- One of our main tasks is to give companies the knowledge of what their customers value so that they can prioritize interventions, creating relevance of cooperation and thus differentiate themselves positively from the competition.

Priority is key in efforts to create value for customers. Companies should turn its focus on the customers that they can create the greatest value for and consider saying goodbye to those customers who are constantly dissatisfied and requires substantial internal resources. Mikkel Korntved ends:
- Companies must of course learn from their mistakes, but they must also realize that they cannot be something for everyone. They should focus on the customer relationships that are most profitable for the company. It is more important than ever to have detailed knowledge about the customers that contribute positively to the company's bottom line.