Building Customer Loyalty: Technical Guide No. 2

In many countries, microfinance institutions are losing their monopolistic control over the market, and customers are becoming experienced purchasers of a wide variety of financial services. The emerging reality of increasing competition and a more discerning clientele necessitates a different approach to microfinance. This publication proposes a new formula, one in which MFIs seek feedback from customers, incorporate that feedback into product design and service delivery, and thereby build loyalty in existing customers. Loyal customers make regular purchases, refer others, and stick with one institution over the long run. This technical guide:

• Shows the positive economic impact of customer loyalty on both the customer and the institution;
• Gives MFIs step-by-step guidelines for increasing customer loyalty.

The document finally concludes that a loyalty-based approach is an essential element of an MFI's long-term business strategy.

Also available in Spanish here.