Learning from Machiavelli: Loyalty is Rooted in Self Interest 

Howard Lax, Ph.D. | Mar 4, 2011 722 views No Comments

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First, let me ask for a little latitude with my metaphors. Perhaps I could have chosen a philosopher with a more benign, more altruistic image than Machiavelli, the cold realist typically associated with “the ends justify the means” school of thought. Yes, the counsel he provides in The Prince can be brutal and deals with the loyalty of the monarch’s subjects, not customers, but there are some clear lessons that still apply and from which we all can learn.

“The nature of peoples is fickle, and it is easy to persuade them of something but difficult to keep them in that persuasion.” Is this a caution to the sovereigns of the day, or a prescient word to marketers about the relative ease of convincing consumers to try something and the difficult challenge of sustaining loyalty and retaining customers? The initial lure for “a taste” or consideration is easier than keeping them “in that persuasion,” which requires delivering on the promise and guarding against the persuasive efforts of competitors.

Was Machiavelli speaking about political power when he said that “a prince must have a friendly people; otherwise he has nowhere to turn in adversity” – or was he warning CXOs that their firm’s market power is rooted in their relationships with customers who support the company with their pocketbooks and word of mouth? The true measure of the strength of those relationships is tested in the face of some market adversity – be they “real” or perceived problems – whether its reports of antenna issues with iPhones and unintended acceleration on Toyotas or the spate of mortgage servicing problems at major banks and the constant sniping among cell providers about the other companies’ poor coverage and dropped calls.

I think Machiavelli is most perceptive, however, in his insights with regards to the basic idea that it is the interests of people that motivate their behaviors. “A wise prince must adopt a policy which will insure that his citizens always and in all circumstances will have need of his government; then they will always be faithful to him.” How does an organization instill a sense of loyalty among stakeholders? First and foremost, deliver the goods and services that stakeholders need in a manner that best meets their perceived needs. In other words, be the best at delivering on the interests of customers (not to mention employees and other stakeholders).

I know this sounds so, well, selfish, so politically incorrect, so Me-Generation. But people (including people acting on behalf of businesses or other organizations) act out of a sense of perceived interest. This isn’t necessarily ignoble. Those interests can be better quality, superior service or lower price – or they can be environmentally conscious, socially responsible and economically fair. While the interests of some consumers might be shopping for fine quality clothing, an excellent buying experience or the best price, others have equally valid interests in buying only from manufacturers who pay fair wages, prohibit child labor and use animal-friendly materials. We might characterize the first group as expressions of greedy self interest and the latter as “enlightened self interest” or even altruistic; either way, the individual’s interests are at the root of their behavior. Of course, everyone has a range of interests, and people implicitly prioritize those interests when they make decisions, almost all of which entail at least some trade-offs between interests.

Machiavelli was spot-on: interests are what matter to and motivate people. When buying a car, some people care about (that is, have an interest in) mileage because they worry about the price of gas, others are more concerned about the environment or about the security and source of oil supplies. The self-interest about costs is not inherently less or more reasonable than an interest in the environment or, for that matter, the lack of concern (or lower priority) expressed by someone buying a gas guzzler.

I know waxing on about how consumers are driven by their perceived interests and that companies can best build customer loyalty and deliver memorable experiences by delivering on the interests of their customers isn’t going to win me a group hug or prompt a spontaneous round of Kumbayah. But recognizing and delivering on this will win the attention, delight and loyalty of customers – which is the objective, because that is in the interest of the firm.

I don’t know if Machiavelli’s image is at least partially rehabilitated in your eyes. I won’t make any excuses or advocate for some of his more extreme positions (“the injury done to a man must be of such a nature as to make vengeance impossible” or “in the actions of men . . . the end is all that counts”). Whether people are inherently good or not (and the not side of the argument is clearly where Machiavelli stands), they are driven by their perceived interests and priorities and are the most loyal to those companies and organizations that best deliver on those interests and priorities.

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