03 Do you think maintaining customer loyalty should be more important to a carpet business than .. [12]

[Sir Afzal Shad]

03 Do you think maintaining customer loyalty should be more important to a carpet business than attracting new customers? Justify your answer. [12]

Possible Structure:
[Def] Customer Loyalty

Point in Favor of Argument (Benefits of customer loyalty)
[KN] >> [APP] >> [AN]
(Remember to give however, limitation of customer loyalty)

Point against the Argument (Benefits of attracting customers)
[KN] >> [APP] >> [AN]
(Remember to give however, drawbacks of attracting customers)

Evaluation: (Overall Judgement)
[L1] Judgement [L2] Develop Judgement [L3] Development in Context

[Daris]

[Def] Customer loyalty is when consumers repeatedly buy from the same business.

[KN] A loyal customer base can provide regular sales meaning the company has stable revenue.
[APP] For example, a customer who regularly renovates their home may return to the same store for new carpets.
[AN] This can reduce marketing costs as the business does not need to spend as much to attract new customers, it creates financial stability for the business and allows the business to plan long-term strategies more confidently as there income becomes predictable.
However, relying too much on loyalty can limit growth especially if there is a change in trends of carpet designs or materials used. Also, what if competitors attract customers with new & better designs?

[KN] Attracting new customers can increase sales and market share.
[APP] For example, sales promotions or online advertising can help bring in people who have never bought from the store before.
[AN] This can help improving brand recognition meaning the customers now don't need to be attracted again and again since word of mouth advertisement is generated. It Also, reduce dependence on current repeating customers.
However, in order to attract customers advertisement, promotions comes with a cost which means now there can be a financial strain (cash flow issues) on the business, especially if currently they are having a limited loyal customer base.

[L1; Judgement] Overall, for a carpet business i think attracting more customers is more important.
[L3; App] For a carpet business attracting new customers is more important as carpets are bought once in a blue moon by majority of the customers, this means if we rely on loyal ones, we won't be able to manage our expenses.
[L2; AN] In the long run, carpet business should keep on introducing unique designs, sustained quality, promotional prices which would not only keep loyal customers with us but can also be used as attracting new ones.

Examiner Comments; Stand Corrected.
Applicable for both CAIE's & Edexcel 12 Marker

[masabtahir]

def] maintaining customer loyalty mean when your customer buy your products repeatedly

kn] maintaining customer loyalty is important in carpets selling business as customer will come to your shop whenever they wish to buy carpets
ap] for e.g. carpets business make his customer loyal so repeat sales would be done
an] this will make the customer base and profit ratio increases of the carpet business and will have a good usp in time

kn2] on the other side customer loyalty is not much important in carpets selling business in a competitive market place
ap] for e,g, where many competitirs work together there low prices and sales strategy matter more than customer loyalty
an] this makes the customer loyal to good service and good quality carpet

l1] good quality and low price matters more than loyalty of customers
l2] customer will get loyal where he will get a benefit of money
l3] so final low prices and convineient services are more considerable for carpet selling

[Shuraim Arif]

(Def) Customer loyalty means customers keep coming back to the same business again and again, instead of going to competitors.
(KN) A loyal consumer base provides the business with a stable revenue as customers are repeatedly buying from the same business.
(APP) For example, if a carpet business has a loyal consumer base, its sales would be consistent as every time a customer wants to replace their carpets, they would buy from this business rather than buying from competitors.
(AN) This would mean that the business would be earning a stable net profit, meaning payments of costs and expenses is almost unlikely to be delayed, leading to good relations with suppliers, eventually allowing the business to receive greater trade discounts in the future. However, if the business focusses more on making customers loyal, rather than attracting new customers, sales would stay consistent and there would be a very slow increase in revenue.
(KN) On the other hand, attracting new customers plays a crucial role in expanding the business.
(APP) For example, if a carpet business focusses on attracting new customers, there would be a huge increase in sales.
(AN) This would mean that net profit will be higher, leading to a bigger value being reinvested into the business. This would lead to better quality carpets to be produced, but more importantly, the reinvestment would allow the business to enter into new markets and become more competitive. However, if the business focusses too much on attracting new customers and doesn't care about making customers loyal, customers wouldn't feel valued enough and may switch to competitors.
(EVA) In my opinion, focusing on making customers loyal is a lot more important than attracting new customers. This is because once customers have been made loyal, they would share the experience and quality of the carpets with friends and relatives, paving the way for more potential customers for the business in the future. In the long run, the business should keep on producing unique designs that give customers a taste of quality and comfort. This would automatically lead to new customers being attracted to the business without having to spend too much on attracting them.