E-zines Silence the Brand DetractorsBarbara Briers
HEC School of Management
Jan Van Den Bergh
Loyalty is a person's willingness to make an investment or personal sacrifice in order to strengthen a relationship (Reichheld, 2001). For a customer, this can mean sticking to a supermarket that offers him good quality even if this supermarket is on the other side of town, but it can also mean putting one's reputation at stake in recommending a product to colleagues (Reichheld, 2001). Managers as well as researchers know that loyalty in general and positive product recommendation in particular increase profitability. According to Reichheld and Sasser (1990), companies can boost profits by almost 100 percent by retaining just 5 percent more of their customers. Satisfied customers talk up a company to their friends, family, and colleagues. Customers continue to purchase those products that satisfy them and influence the brand perceptions of those with whom they communicate (Richins, 1983). In this article, we explore to what extent electronic permission marketing can influence a customer's inclination to recommend a product to others. We do recognize that the relation between loyalty on the one hand and satisfaction or recommendation on the other hand is asymmetric (Oliver, 1999): although loyal consumers are most typically satisfied (or will recommend the product to others), satisfaction (or recommendation) does not universally translate into loyalty. For the remainder of this article, however, we will use Reichheld's recommendation factor (2001) as a proxy for consumers' loyalty. Reichheld (2001) stated that recommendation is one of the best indicators of loyalty because of the customer's sacrifice in making the recommendation.