Bad behaviour: why businesses struggle with customer loyalty

0
126

Share on LinkedIn

We want to go out on a limb here. From our experience, most brands that struggle with customer loyalty spend too little time focussing on what they are doing internally. Fixing issues with loyalty is difficult.

And it’s made worse by bad behaviours that businesses find difficult to shake off (that’s if they are even aware they have a problem). The same mistakes are repeated. Some mistakes are rooted in myths. And some are rooted in disbelief. Let’s first take a look at the myths.

Three myths ..

1. Doing the basics well is enough to keep your customers.

This is untrue. Businesses often over rely on what have become the basics to differentiate. Investing in digital, a new customer service system, friendly staff for example. Customers don’t see these as reasons to be loyal. Yes they do them well. But they are just the (functional) basics that they expect from any business. Who doesn’t want good quality products and services at prices that represent good value for money? What business isn’t investing in digital or technology?

We’re not saying that being consistent on the basics isn’t important. It is. Let customers down on these and they’ll take their business elsewhere. But it doesn’t drive customers to come back, trade up, spend more or recommend you to their friends and family. You need to set your sights on ‘wow’ to grow the customers you’ve already got. And tempt some away from your competitors.

Emotion is the biggest driver of loyalty

True loyalty is fostered by emotionally committed relationships. Emotion is the biggest driver of loyalty in most industries. These types of relationships can be built through differentiated experiences, empathetic interactions or a shared sense of purpose, values and beliefs. Customers that are emotionally invested in a business keep that company top of mind when they need something.

Does your business understand how to tap into the emotional drivers that would make your customers behave in a loyal way?

2. Satisfaction drives loyalty

All the evidence tells us that ‘satisfied’ is a low rung on the loyalty ladder. Simply satisfying customers doesn’t cut it any longer. Satisfaction, on its own, won’t shift the dial.

The reality is a staggering 75% of customers who leave a company were satisfied with their previous supplier Training Industry.

You need to ask yourself – are we making a mistake by conflating high levels of customer satisfaction with strong customer relationships?

3. Our customers only care about price

Right? Not quite. Customer experience overtook price and product as a differentiator years ago. Of course price is important, especially in these difficult times. And buyers have information at their fingertips to discover new products and services and make judgements about value for money. But there’s a price myth that isn’t challenged enough especially when it comes to commoditised markets.

From razors to residential insurance, there’s a widely-held belief that customers only care about price in these types of markets. Get your price point right and customers will naturally be more loyal. This isn’t true. Just ask first direct, British Gas, Dollar Shave Club, Revolut or Peloton customers what they think.

If your products have become commoditised, are you doing enough to build a loyal following? Or are your customers leaving for businesses that understand how to position their products in customers’ lives and stand out on experience?

The disbelief …

1. Some organisations are in denial

Problem? What problem? All too often companies communicate, market, sell and provide support to customers in ways that suit them. The justification? “It’s what customers want”

2. Others see churn as the natural order of things

They attribute low levels of customer loyalty to factors outside their control. Competition is relentless and regulation is strong. Customers are naturally promiscuous. They are essentially blaming customers for exercising their choice when they have failed to give them a reason to remain loyal.

3. The plan will never work

Some businesses may have taken steps to address their defection, loyalty and spend challenges. They continue tinkering – a new social media campaign, some improvements to the online shopping site, additional customer rewards added to the loyalty scheme. But they still don’t manage to move the needle.

4. Some companies still live in a ‘build it and they will come’ world

The business has a great product. So why wouldn’t people want to stay? It works for Apple. But can you say that about your company?

Does any of this ring true for your business? Or if you have been struggling with loyalty and are not sure why, don’t be concerned. Learn more by downloading our guide An Inconvenient Truth: Creating Loyal Customers Starts With You.

Republished with author's permission from original post.

John Aves
John is passionate about customer experience as a strategy to drive customer loyalty, employee pride and profitable growth. He believes that every successful customer strategy needs to focus first on the people within the organisation. John's experience has enabled him to combine senior line management roles with that of a board level consultant, facilitator and advisor.

ADD YOUR COMMENT

Please use comments to add value to the discussion. We will not publish brief comments like "good post" or comments that mainly promote links. All comments are reviewed by moderator before publication.

Please enter your comment!
Please enter your name here