Customer Loyalty

Loyalty

Customer loyalty nowadays becomes critical to many service industries, including the area of tourism (Huang & Chiu, 2006). The travel agent is one that relies heavily on repeat business and most of them have little or no advertising budget. It is widely belief that the cost of attracting new customers is more expensive than to retain existing customers. Customer loyalty can serve as free advertising for the agents. Furthermore, Blum (cited in Lobo, et al., 2007, p. 486) reported that 66% of the pleasure or personal travel bookings of all agencies in the USA come from previous customers.

According to Dick & Basu (1994), customer loyalty is viewed as the strength of the relationship between an individual‘s relative attitude and repeat patronage. Loyal customers are those repeat customers. They are willing to spend more and consider the firms as their first choice. They are also likely to engage the service of the firms for the next few years which mean a steady income for the firms. Moreover, customer loyalty not only brings repeat customers but also create a positive image for the agents. Loyal customers are likely to recommend the agents to their friends and relatives with positive word-of-mouth. Sometimes they even encourage their friends and relatives to do business with the specific travel agents. Customer loyalty is also one of the means to achieve profitability (Reinartz & Kumar, 2002).

The travel agents can build loyalty by encouraging the agents to establish relationship with the customers, get to know them (remember what their likes and dislikes) and their needs so the agents can build trust and deliver a tailor-made, personalized service. Moreover the agents should keep in touch with the customers after the service end such as sending thank you card through e-mail. Rewarding customers for repeat business is also one of the best ways to build loyalty for example, giving free upgrade on their room during their next trip and arranging...