First and foremost I thank each and everyone who continues to listen the speaking that occurs on this blog. A special appreciation for those of you who make the time to add your voice to the conversation by commenting. I wish each of you the very best for this year – may this year be the best year of your lives.
Today, I’m up for grappling with the subject of customer loyalty as I have been immersed it it since the second half of 2016 – professionally as a consultant and personally as a customer.
What Are We Talking About When We Talk Customer Loyalty?
Before diving in, let’s stop and really think about what we are talking about when we talk loyalty. According to Wikipedia:
Loyalty is devotion and faithfulness to a cause, country, group, or person. Philosophers disagree on what can be an object of loyalty as some argue that loyalty is strictly interpersonal and only another human being can be the object of loyalty.
So customer loyalty, viewed in light of this definition, is about generating devotion and faithfulness to a company and/or its brands.
Is it possible to generate devotion and faithfulness to a commercial organisation?
I can read that which the Guardian newspaper publishes online for free. Yet, I took up the Guardian’s request to pay a fee and become a Guardian member. Why pay for something that I can get free? Because, I find myself in tune with the journalism/editorial values of this newspaper. And I wish to ensure its health so that it can continue to do that which it does.
Football fans. There are folks (customers) who spend significant amounts of time and money to travel up and down the country in order to watch/support their football team. Their devotion isn’t limited to buying tickets / watching the games. These customers also tend to be the one’s that buy the club’s merchandise and proudly display it.
Then there is Apple – clearly there are many who have been devoted and faithful to the Apple brand through good times, difficult times, great times….
So the answer to the question is yes – it is possible to generate devotion and faithfulness to a commercial organisation.
Are Loyalty Programs The Way to Customer Loyalty?
Recently, I found water pouring through the ceiling of the room below the main bathroom upstairs. Fortunately this matter was covered by home insurance. The claims folks were helpful and appointed a contractor to replace the ceiling, strip the wallpaper and put the room back into the state it was before the damage occurred.
Unfortunately for me and my family the contractor appointed to carry out the repair work did the work in a slapdash manner. So I raised the matter with the insurance company and told them I did not want this contractor to do the repairs in the upstairs bathroom. Ongoing, I may name and shame at a later point in time.
Who to use to do the work on the upstairs bathroom? When faced with this question the immediate answer was the contractor that had carried out work on my home in 2014 when a car had driven into the front wall. Why this contractor? Because this contractor did such a professional job: upfront work of scoping and detailing the work; organising the work so that the right tradesmen turned up at the right time/sequence; adhering to the schedule of work; doing a great job of the job to be done; and providing a 2 year guarantee.
So it was the experience of dealing with this contractor including and especially the quality of their work -start to finish – that made me remember them some 3 years later and turn to them. Not because of any loyalty program.
Back to football clubs and their devoted/faithful customers – the fans. Turns out that collect points and cash them in for rewards type of loyalty programs don’t work. Why not? That is not how a fan (loyal customer) thinks of loyalty. How does such a fan think? Something along the lines of “Remember me. Occasionally, offer me a free drink at your bar and/or invite me in to meet members of the team / club.” What kind of loyalty is this? The human kind – the kind that the human race has known / practiced for many years. The kind that has allowed human tribes to face obstacles, together, and flourish.
Conclusion: Genuine Loyalty is Built Through the Experience Not the Program
Quality. You can build quality into the production process. Or you can employ quality inspectors to find defective products at the end of the production line. And/or customer services folks to deal with the complaints arising from poor quality products.
It occurs to me it is the same with customer loyalty. You can either build loyalty into the way that you do business – product, marketing, sales, logistics, service etc – or you can setup customer loyalty programmes to compensate your customers for the defects in the quality of customer’s experience of your products, your services, your organisation. And/or your failure to adequately differentiate yourself from your competitors.
I say that the smarter way is to build loyalty into the way that you do business such that no customer loyalty program is necessary to keep your customers coming back to you:
-For Apple this means regularly creating cool/useful products/services that nobody else provides and marketing them in the Apple manner.
-For Amazon it means continuing to do that which Amazon does so well: being easy to do business with, delivering the goods the next day or two, keeping customers informed, and importantly looking out for the customer in multiple ways.
-For the Guardian newspaper it means standing for the causes that matter to the kind of people who are Guardian readers.
I thank you for your listening. Until the next time….
