Abstract
Purpose – The purpose of this article is to find out if a focus on promoting customer loyalty is a supplier’s best strategy for gaining significant immunity against customer desertions and business losses during recessions? And if not, what are the alternatives? Design/methodology/approach – The authors investigated how loyalty strategies played out in practice in the Indian IT-ITES industry (Information Technology – Information Technology Enabled Services) during the recent global downturn. Findings – Field interviews with executives of many of the major players in the industry revealed the weakness of their customer loyalty strategy and discovered some useful alternative tactics. Practical implications – Service providers that successfully navigated the rough recessionary waters relied not on loyalty but their superior information advantage. Originality/value – Field interviews suggest that hanging on to clients in a recession have less to do with investment in a loyalty strategy and more with the vendor’s superior capabilities – such as an information advantage, agile use of diverse competencies and scale–that enable it to offer the client a superior deal even in a painful business downturn.
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