01:Identify and explain two reasons why maintaining customer loyalty is important to AUC[4]

[Dania]

AUC is a bank. Its organisational structure has a tall hierarchy and long chain of command. Most of its customers are small businesses in the tertiary sector. Last year AUC made a loss of $60m. The new Managing Director has to improve employee motivation as well as reduce costs. 20% of its 19 000 employees will be made redundant. She said: ‘Maintaining customer loyalty is important. We will need to inform our customers that 500 of our 2000 retail bank branches will be closed.’

01:Identify and explain two reasons why maintaining customer loyalty is important to AUC[4]

Possible KN Points:
>Improve reputation.
>Spend less on advertising.
>Word of mouth advertising or recommend to others.
>Good source of feedback.
>Increase sales OR more likely buy other products.