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Loyalty is Not Just for Customers

Lynn Hunsaker | Jan 2, 2010 41 views 2 Comments

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Customer loyalty is important to business success. Profitability of customer retention is pretty much common knowledge.

So companies do a lot to encourage customer behavior that favors their brand, to increase:
– Purchase frequency and volume
– Involvement and structural ties
– Recommendations of the brand.
Yet, like most things in life, loyalty is a two-way street. Who are you loyal to?

“Loyalty by its very nature demands that we commit ourselves to a person, group, or cause,” explain Timothy Keiningham and Lerzan Aksoy in their book Why Loyalty Matters. “We suppress our short-term self-interests to maintain our bond. In its most noble form, we serve a cause greater than ourselves, designed to unite with another.”

What and who do you consider to be greater than yourself? The answer to this question reveals the shallowness or depth of loyalty in your environment.

Customer Loyalty
Are you personally loyal to your customers? Is your whole department loyal to customers — both internal and external, with an emphasis on the external ones who ultimately make your payroll possible?1 If not, we may be subconsciously expecting customers to “serve a cause greater” than themselves – us! If we really think about it, the company exists because of customers, not the other way around, so this line of thinking makes the customer “a cause greater than ourselves”.

Reciprocal customer loyalty is not limited to customer-facing employees. A company is a team. Everyone’s attitude, decisions, and behaviors have a ripple effect on customers.



How do you (individually and collectively) demonstrate your loyalty to customers? What happens when you’re stuck between a rock and a hard spot, so to speak? Do you “suppress short-term self-interests” to maintain your bond with customers?

Companies’ reports to stockholders and industry analysts frequently tout satisfaction and net promoter rankings. In some cases, stellar customer-centric performance is indeed a hallmark for the business. In other cases, the benchmark may be the prevailing mentality among competitors, which may not at all reflect what customers actually perceive as being focused on their best interests. It’s worthwhile to conduct occasional reality checks!

Personal Loyalty
“Our loyalties demonstrate what we value, what we believe, and what we want our world to be”, explain Keiningham & Aksoy2. “Loyalty requires deliberate effort, constant practice, and conscious employment. … Being loyal is the manifestation of the choices we make in life. … And for the world at large, it is the small yet numerous acts of loyalty or disloyalty that help determine the kind of communities in which we live.”

Laws of congruence imply that it may not be possible for reciprocal loyalty on a professional level without actively practicing loyalty on a personal level. Consider loyalty among your friends, family, community, faith, and fellow citizens. In this age of instant gratification, it’s easy to become self-centered and discount the value of relationships and time-proven principles. It’s worthwhile to conduct occasional reality checks with all your relationships, and strive to continually improve relationship skills. You may enjoy richer ties in all facets of life, with spill-over benefits of customer retention in your business.

Boomerang Effect
Huge budgets and efforts are dedicated to enticing customers to be loyal to businesses. And according to the two-way street theorem, reciprocal loyalty by companies to their customers is key to sustainable return on investment.

Request complimentary Customer-Centricity Worksheet and/or customer-centricity audit.

1Note: a careful analysis of this is essential, as it’s not just about who deposits money in accounts, but rather, those who are at the end of the line as recipients in the chain of your services and products — even for non-profit and government entities.
2The book includes a code for complimentary access to the LoyaltyAdvisor online assessment, which provides an evaluation of how you view your loyalties, and how your friends and family view them, to help improve your bonds with others.

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2 Responses to Loyalty is Not Just for Customers

  1. Esteban Kolsky January 2, 2010 at 7:30 pm (55 comments) #

    Lynn,

    I like your statement that Loyalty is a two-way street, and it is something we have said many, many times in different ways.

    I also like you exploring, little, in the direction of the internal operations. However, you stop short IMO of exploring the real basis for loyalty: the employee and the relationship they have with the organization. Ultimately, with the exception of fully automated organizations where decisions are always made by computers, the decision to complete a specific process in one way or another befalls on a human being. And that worker in the organization is the one who must have a relationship the organization that will propel them to make the right decision. Loyalty is earned as a result of the mini-details for each transaction and the empowered employees that make those decisions must be loyal to the interests of the company to make the right decisions in regards to loyalty.

    long, winded — but what do you think?

  2. Lynn Hunsaker January 3, 2010 at 10:37 am (96 comments) #

    Thanks for your comment, Esteban. As you say, employee empowerment is one of the keys to customer loyalty. Things get tricky when companies’ policies and culture are dis-loyal to customers’ best long-term interests. When that’s the case, the individual employees are fighting an uphill battle in the overall effort to build a two-way street in customer relationships. And in that case, the employees’ loyalty to the organization, and vice versa, means little toward building customer loyalty.

    The main idea is that the overall agenda for a company must have pure motives, with the reciprocity built-in to customer loyalty programs — not just tactical reciprocity, but a real cultural strategic two-way street. The disparity in customer’s and companies’ views of whether the entity is customer-centric shows that the majority of businesses are struggling with this!

    Once that agenda is established, each individual throughout the company may do well to actively manage their personal loyalties in various facets of their life, as another key to realizing the potential that businesses seek in building customer loyalty.

    Best regards,
    Lynn

    Lynn Hunsaker helps companies improve customer data ROI, customer-centricity and customer experience innovation. She is author of 3 handbooks. See ClearAction.biz, Twitter.com/ClearAction, Facebook.dj/customerexperience.

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