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Improving Customer Loyalty in the Cell Phone Industry

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Customer loyalty can be defined as the willingness of clients to buy goods or services frequently from a business in large quantities. In the cell phone industry, customer loyalty is not constant and can not be predicted with accuracy due to frequent strategy change by competitors (Lencioni , 2010).  Virgin mobile company is a typical example of such companies that has for a long time, posted a high rating in customer loyalty. In the majority of its largest markets namely the United Kingdom, America and Australia, Virgin Mobile has been outstanding from the year 2008 to the present day. Competitive advantage, cost advantage and differentiation advantage can be seen as the reasons for the positive results and can be adopted also in our company.

Competitive advantage link to customer loyalty

Competitive advantage has been one of the fundamental reasons that Virgin mobile is using for the edging out of its competitors. First it has a large capital base through its often teaming up or with other companies through short term and long term agreements to do projects. This has been the key of its venturing into new markets and experimenting anticipated services for the markets before any formal introduction of the services to the market, for instance, in the year 2002, the company amazingly teamed with Sprint Nextel in addition to having surpassed the 3 million mark of customers only after three years after its launch. The approach that it took of adopting technology such as IVR (interactive voice response) and a certain web based self-service for its customers made it stand out from its competitors. Accenture limited also teamed up with the company to develop and implement web based solutions that proved to be easy for the users.

The competitive advantage of Virgin Mobile also arises from its possession of well designed technological program which enables customers to achieve a larger percentage of tasks on the shortest time and effectively. This program has given the company an edge over its competitor who probably are trying to ape the same or simply haven’t any plans of trying it yet.

Cost advantage and customer loyalty

Cost is another aspect that either retains or drives customers away. The services offered by the company like calling or subscriptions to the web are based on tariffs which vary from time to time. The serve make up the basic sources from which these companies derive their revenue hence great efforts are put in measures aimed at reducing the costs incurred in the provision of these services. This ensures that customer loyalty is sustained since the customers are made to believe that the cheaper option is the most appropriate.

Differentiation

Differentiation advantage has been another reason why customer loyalty has been achieved and sustained by Virgin mobile limited. Differentiation of a product or a service involves unique packaging of services that best suit the existing customers and set a clear demarcation between the product of a particular company and those of other companies. Virgin Mobile has been able to come up with smart cards and magnetic strips that make it possible for the consumers to pay or access its services.  This is the easiest and most convenient way of paying debts without going through massive procedures and there is no doubt that customer appreciate this strategic feature of the company.  The company further embraces cell phone designs as another differentiating strategy. The cell phones produced by the company have features and characteristics that are easily adaptable and affordable compared to what the rest of the competitors have to offer.

How My Company can compete in the market

For the best performance of this company I recommended that customer loyalty be given the utmost attention it deserves (Lencioni, 2010). There should be massive investment in customized services aiming at all client classes and categories. On top of that there should be an in depth research and analysis to specifically know what the customers want and develop tailor made solutions to cover for the dynamic and diversified customers needs. This can be achieved through outsourcing and entering into contracts with specialized firms like Virgin Atlantic did with Accenture to make its operations smooth. Plunkett (2008) asserts that this will ensure that satisfactory services to the consumers at reasonable costs to the firm and reasonable prices to the customers. Contracting new service companies should also be done properly. The companies to be contracted must be good and reputable as sometimes a name of a company may prove to be a great liability despite its services being perfect. Customers should be kept adept with information on steps plans and objectives that the company is to do. This increases their confidence.

Improving customer loyalty and other recommendations

As Berndt & Brink,  (2004)  notes, it is also important that customer relationship programs be adopted to monitor the customer’s responses and reactions to new services to either improve or adjust the services to suit them. These are programs that several companies like the virgin mobiles have introduced through the web and toll free lines so that queries and clarifications are found without any delay.

The company can be able to operate well if customer loyalty is top notch because there may be times when the company tries to increase price or introduce some services that may not be attractive at the beginning e.g. introduction of new tariffs. This may sometimes encourage migration to other service providers. By holding constant promotions and customer benefits one may retain loyalty to a great extent since there is a general understanding by customers that such moves are of short term (DiJulius, 2008).

Conclusion

In the cell in industry there should be a constant customer loyalty that should be achieved through competitor analysis. This means that the strategies adopted by the rivals in the market should be studied and well analyzed consistently to ensure that the weaknesses of these strategies are exploited. Some companies may aim at the short term strategy of revenue increase while others may aim for the long term attainment of a larger customer base. This then poses a great challenge for companies to correctly predict what their competitors are thinking. Companies therefore must look at their competitive, differentiation and cost advantage and must frequently adjust strategy to retain the new and existing customers.

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