I’ve been with a certain service provider for about 20 years now. It’s definitely the longest I’ve ever been with any brand that I can think of off the top of my head. Sometimes you stay because it’s the only game in town (you can likely consider your cable company for this example). Sometimes you stay out of a sense of laziness (are you a Coke person or a Pepsi person?). But I’m not sure if I’d say that I’m staying with them out of ‘loyalty’.
It’s kind of a weird thing to think about: loyalty to a brand.
Don’t get me wrong, I have my favorite brand of vodka (I have two, in fact…one for mixing, and one for martinis), my go-to coffee, and we have an excellent Indian restaurant in our neighborhood where they know us by name. But when I think about things like my airline (I use the one hubbed in Denver, of course), or the brand of car we drive (sure, it’s good, but when we are in the market for a new one, history is only part of the decision-making process), there’s certainly nothing emotional when it comes to what those brands may consider our ‘loyalty’.
When brands think that Customers are loyal to them, I think they’re kind of kidding themselves…especially when they’re trying to do things like make ease-of-use or low-pricing their calling cards. After all, if you’re chasing a segment of the market that’s most interested in saving money when purchasing your goods or services, what do you think is going to happen if someone (anyone!) comes along and underbids you? When your goal is transactional like that, that people choose you is more utilitarian than some sign that they have any affinity for you. Don’t get me wrong, I’m grateful that there are brands of gas or paper towels or thumb-drives that strive to be the least-cost competitor. And when I need that lowest cost on a commoditized item like that, I’m all about them. If they’re constantly least priced, I’ll even continue to go there, even if somehow someone else comes along and surreptitiously costs less (until, of course, I’m made aware of it). So there’s definitely incentive (and it makes sense) to keep those costs down if that’s the Brand Promise you’re trying to fill. But don’t sell yourself on that.
When I think of being loyal, I think of my partner, my dog, my family, and friends. Loyalty, in these instances, means that, despite their (or my!) flaws and quirks, we still love each other and are there for one another. That simply doesn’t translate to the business world. You may love your favorite sports team, and don’t get me started on politics (and the ridiculous things some people do out of tribalism and/or obsession over totems and politicians themselves). But if that cell-phone provider keeps dropping your calls but has the temerity to tout its reliability, you have reason to simply bail no matter how much they mean to you nor how long you’ve been with them. On the other hand, of course, if you’re only with them because they’re the lowest-cost provider, your priorities (and mileage) may vary.
But back to my loved ones: Loyalty in those relationships actually means the opposite of what I think happens in the business world. Loyalty to your friends and family means that you stick with them sometimes in spite of their failures (again, just ask my partner!). Nobody’s perfect, so a lot of times we stick with those who are close to us, acknowledging their shortcomings and even failures along the way. And sure, maybe if the brand we usually use fails us from time to time, we can let that slide—especially if they recover well. But usually, you’re with (and stick with) a brand because they satisfy what, in particular, you’re looking for when it comes to the product or service they provide. Whether that’s lower cost or a luxury experience, or high quality or ease-of-use, if you’re thinking about any difference in brands at all, it’s because someone’s met that need you have. Once or twice they fall down on that, and you may let it slide if you’ve been with them a while. But if it becomes clear they’re not living up to their Brand Promise, you’ll find someone else who does. Likewise, even if they are doing well enough, it’d be easy to lure you to another brand if they did it better.
So, this service provider has been letting me down in a few ways lately…cost, ease-of-use, compatibility with what I need. I don’t hate them, and am not getting near that. But I don’t love them either. The things I do like about them are still there and valid. But I’m not loyal to them in the sense that I’d never look for someone else to come through for me in the ways that I need that they’re not meeting. They may look at my long history with them and misinterpret my satisfaction (which is real, although waning sometimes) for loyalty. They may think they’ve got me, but it’s not true. They still have to deliver.
Great topic, and one which is as relevant for employers/employees as it is for customers. What you’re describing feels much more like human inertia, and much less like the commitment and advocacy necessary for true loyalty behavior. Inertia is a different state than loyalty, more like complacency and acceptance. In other words, if the pain associated with repetitive neutral and poor experiences were significant, and uncomfortable, enough and the product or service was important enough in your life, you’d seek greener pastures.
If organizations invest more time and effort in designing, and then consistently delivering, attractive and distinctive (even branded) customer experiences, they won’t have the kind of situation you’ve described. It can be done – just ask companies like Zappos, Southwest Airlines, Trader Joe’s, IKEA, Umpqua Bank, etc.: https://customerthink.com/delivering-unique-attractive-even-branded-customer-experience-lagniappe-any-company-can-do-this/
Nice perspective Nicholas, I believe that if the service was amazing and the quality of the product was more than normal a little bit, if i can achieve both with a reasonable price for customers will be perfect,but if not, past strategy for companies is going to success whether sales or reputation,because you make your customers feels relief, everything on their phones or laptops,and if something wrong happened the customer will resolve his case without take a vacation and coming to the bank for instance. It’s a service era in my opinion dispite a lot of companies didn’t care about their services
This is absolutely spot on. We don’t have bandwidth to have emotional relationships with brands, not more than 2 or 3. Like the author my loyalty is due to functional/aesthetic reasons (Apple) or default reasons where effort of finding a better alternative is too expensive.
That loyalty requires an emotional connection used to be a brand strategy delusion but saw on Twitter the other day a leading CX guru proposing the same thing. Not good for CX industry to delude itself in this way
Bang on Nicholas. I think the crux of it is your statement, “I think they’re kind of kidding themselves…especially when they’re trying to do things like make ease-of-use or low-pricing their calling cards.”
“Loyalty programs” have nothing to do with loyalty. They bring people in with promises of cool things, then create barriers to exit with points programs that will disappear if the customer doesn’t stick with them. That’s not loyalty. That’s bribery and entrapment.
Do bribery and entrapment work? Yes. absolutely. But — if that’s all a brand’s got, then the second someone comes along with a cooler trinket, a better price or a new differentiator you will lose those customers faster than I can forget a password.
Loyalty is not about quid-pro-quo. Never has been. Imagine using brand loyalty strategies to make new friends. “Hey, if you’ll be my friend, I’ll give you this friend card so you can collect valuable friend points…”
The reason that your provider has never truly earned your loyalty is because, despite all the things they may have done right, you never felt that they genuinely cared about you. You never felt that you could trust them to have your back if things went sideways. They never created a connection based on common values, belief or culture .
Harley-Davidson never had a points program. They represented a culture that people could relate to – and they nurtured that. Similarly with Apple, back when Steve Jobs founded it. Here in Canada, there was Tim Horton’s, back when it was Canadian owned.
Sears was iconic for customer loyalty up until the early 80’s. Their failure has often been blamed on the growth of Wal-Mart, but it can be traced much further back, when they began chipping away at the things that made customers loyal in the first place.
Loyalty isn’t dead, but most brands are actively trying to kill it.
Totally agree with your points. Sometimes I stay with a brand because it is too inconvenient to switch (wireless provider), there is limited competition (cable provider) or they are doing an adequate job and have not given me a reason to change (airline). Many of the other brand preferences are mostly transactional (best price, convenience, etc.). For some situations it is the brand I dislike the least at the time, based on my experience. For some services, none of the choices are good, some are less bad than the others…. not exactly loyalty. 🙂
Nick, A very good read and one, I support. Frankly, your concluding paragraph described an experience I was having with a vendor I had been with for years. They continued to let me down in a key way, but, shined in other areas. Finally, their unkept promises of clean-up pushed me to my limits. The benefits and tentative loyalty I had dissipated and our relationship is no longer. So, as you say, they have to deliver.
This is a great topic. Whether we are talking employee loyalty of customer loyalty I think it is like a pendulum that can swing either way depending on a wide range of factors – and not all of those are under our control
I believe both customers and employees are loyal until you or someone else gives them a reason not to be and unless we extend our “line of sight” we wont see it coming
A customer may be absolutely delighted with your products or services over many years but what if a competitor introduces an exciting new product or service that better meets their current or evolving needs more than yours does- do they stay loyal to you or do they move to new product or service that they now believe better meets their needs
This also applies to the area of employee engagement. You may have extremely high levels of employee engagement but what happens if one of your competitors introduces an innovative workplace practise or ritual that your employees find particularly attractive, or again, better meets their evolving and future needs -do they stay loyal or do they move. There is no better example than the impact of the era of “work from anywhere” – I could fill a page with names of people who have been immensely loyal to their employers until someone else offered more flexible work arrangements in response to the pandemic. I have seen clients go from <10% annual employee turnover to over 50% – so what happened to that "loyalty"?
Conversely a client with over 10% employee turnover dropped to less than 2% by enticing "loyal" employees from their competitors by offering more attractive options.
So where are you on the pendulum of both and how do you retain your preferred position – how do you maintain that and how do you prevent defections?
What programmes or processes do you have in place that identify the (potential) drivers of employee and customer loyalty
I don't think CX or EX surveys provide the full picture, as increasingly I think external factors are having a greater impact than focussing on internal factors
Loyalty is contextual, and depends on when and where. Loyalty changes over a period of time as the firms’ offerings change or the competitors’ offering changes. We tend to buy the one giving the most value (not the underbidding). Price is only one aspect of value.
So measure value to build your value and loyalty map and see of you are ahead of competition and capableof holding on to your customer or you have to improve.
Great examples Michael. And great insight regarding inertia. Many years ago, one of our banking clients did a study which determined that, if it weren’t for inertia and fear of change, almost 25% of their customers would defect. I suspect things aren’t much different still – and in many industries.
Your post reminds us all of how complicated the concept of “loyalty” can be when applied to the business world. Loyalty, however, is not a one-way relationship. The definition found in the really big dictionary is, “a strong feeling of support or allegiance.” We focus a lot on the allegiance side (aka, repeat business, recommendations, increased use, etc.) but loyalty is also about support. Here is my definition (and test) of loyalty.
I was having breakfast in NYC with my publicist at her favorite restaurant a few blocks from her office. “I love this restaurant,” she told me. Since I was writing about customer loyalty, I asked how she “proved” her love. She almost whispered, “Don’t tell anyone this, but when I use their bathroom and wash my hands, I get an extra paper towel and clean off the sink so others will have the same great experience that I have.” When my friends or family fail to live up to my expectations, I show my loyalty, not just by my willingness to stay with them, or forgive them, but how willing I am to invest in helping them reach my expectations.
Does your commitment to a brand, service, or product include more than giving them your time, energy, or funds? Loyalty is cleaning their sink so other patrons will see them through your loyal eyes. Loyalty is not just allegiance, it is support.
In this high inflation economy, how your company reacts toward customer loyalty. Customer may move their loyalty needle for more price sensitive. Particularly in some major household items, some people will no longer only focusing their loyalty brand but rather to pick those with low price will similar quality.