This report provides senior members of information technology (IT) management with a strategic perspective on the importance of customer loyalty to the long-term financial success of the company. A specific emphasis of this report is to provide services marketing management with the insight to bridge academic research with concrete actions that IT companies can take to pursue loyalty-based management.

More specifically, this report provides:

• Case studies on the customer loyalty initiatives of five leading IT companies: EDS, GE Medical, Honeywell, Informix, and Intuit.
• A review of academic and managerial thinking on customer loyalty.
• Empirical evidence that supports customer loyalty as a means to enhance productivity and profits.
• Portrayal of the customer loyal business model and a description of how it works.
• A detailed examination of the key components of a successful customer loyalty strategy.
• Tools required to define the role of services marketing within the corporate strategy.
• Descriptions of services marketing programs that align with customer loyalty goals.

Why a Report on Customer Loyalty?

The impetus for this report came from members of the Information Technology Services Marketing Association (ITSMA), many of whom are doing a great deal of thinking about customer loyalty. They expressed a need for background on the subject, specific ways to relate customer loyalty to services marketing objectives, and third-party validation and support for their initiatives to pursue customer loyalty.

The customer service organization has a special and very important role in maximizing customer loyalty. We need to understand how to do that better. What has been lacking to date is information specifically focused on information technology companies. What are the best practices for maximizing customer loyalty at IT companies and specifically, their customer service organizations?

ITSMA held a 2-day event, “Maximizing Customer Loyalty: The Services Imperative” this past February in Scottsdale, Arizona. Senior service executives from seven carefully selected companies each presented case studies of what their firms are doing to enhance customer loyalty. The following day, three professors from Arizona State University presented their research findings and conceptual frameworks to help formalize customer loyalty processes.

This report is based upon that 2-day ITSMA event. The study expands on the presentations and provides greater depth in some areas. The report presents an overview of management thinking on the subject of customer loyalty, including frameworks and models for customer loyalty. ITSMA helps build a business case for a loyalty strategy, and identifies the responsibilities of services marketing in implementing a customer loyalty strategy. The role of services marketing is clearly defined along with a comprehensive description of marketing programs that can be implemented by services marketing to support, and sometimes lead, the customer loyalty initiative.

Five case studies are included providing real-life examples of strategies, initiatives and programs of a number of leading IT companies. Each company finds itself in a different position in its pursuit of customer loyalty or its implementation of the loyalty strategy. These case studies reveal that customer loyalty is an iterative process.

Report Structure

This report is divided into these chapters:

1. Executive Summary: Report Overview The executive summary presents the rationale for a report on customer loyalty, and summarizes the report findings.
2. Customer Loyalty: The Executive Viewpoint The second chapter provides an overview of management thinking about customer loyalty. This section defines customer loyalty and provides a profile of a loyal customer, presents empirical data that supports loyalty-based management, provides business frameworks and models for customer loyalty, helps build a business case for a loyalty strategy, and identifies the primary components of a customer loyalty strategy.
3. Customer Loyalty: A Closer Look The third chapter focuses on what ITSMA believes are the key elements of a customer loyalty strategy. This section examines topics such as: the customer as an annuity, the role of senior management, and measuring customer loyalty.
4. The Role of Services Marketing: The fourth chapter targets the services marketing manager. Loyalty frameworks are directly applied to the IT services marketing organization. The roles and responsibilities of services marketing are defined along with a comprehensive description of marketing programs that can be implemented by services marketing to support, and sometimes lead, the customer loyalty initiative.
5. Case Studies based on presentations made at ITSMA’s February 1997 Roundtable, “Maximizing Customer Loyalty: The Services Imperative”. Several case studies are included at the end of this report. They provide real-life examples of strategies, initiatives, and successes of a number of leading IT companies. The companies profiled include: EDS, Honeywell Industrial Automation and Control, Informix, Intuit, and GE Medical Systems