Want Customer Centricity? Turn loyalty on its Head!


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We live in a special time, where relationship constructs like friendship and loyalty have evolved from core personal needs to pillars of business outcomes and success.  With most large companies (55%) setting their sights on achieving CX leadership, customer experience and customer centricity have become the new imperative (State of CX Management study, Temkin Group 2015).  At the root of this dynamic, success in business today is built on a foundation of expectations.  Expectations that:

  • all interpersonal interactions inherently involve relationships;
  • relationships, be they personal or consumer, involve variable levels of loyalty;
  • loyalty is deserved and can be earned, measured and tracked.

Clearly, loyalty is a worthy goal for all relationships.  One need merely consider the ubiquity of the phrase “How can I earn your loyalty?” to appreciate how tightly woven the concept of loyalty is into the fabric of all relationships.  Embodied in this well-known and at times over-used colloquialism is the expectation that one can truly earn and keep another’s loyalty. 

At a personal level, only the most cynical among us question the ability to earn one’s loyalty.  When it comes to relationships with consumers, though, while this may have been possible in the past, in today’s highly competitive, multi- and omni-channel, fast-paced high tech world, this relationship dynamic is evolving.  As Columbia law professor George Fletcher observed regarding today’s consumers, “…the best thing to do is leave—that is, to find the competitor who better supplies the needed (product or service).”   To be truly customer centric, therefore, the opposite applies…

To be customer centric, loyalty is no longer earned from consumers. 
Instead, loyalty is cultivated and given to consumers. 

Why, you ask?  To understand, let’s begin with clarity of terms.  From Dictionary.com we find that loyalty is ‘the state or quality of being loyal; faithfulness to commitments or obligations’.  Clearly, yes, but we can take this further, as noted loyalty expert and author Timothy Keiningham wrote, “Loyalty is about accepting the bonds that our relationships with others entail, and acting in a way that defends and reinforces the attachment inherent in these relationships.” (Why Loyalty Matters, Benbella Books, 2009). 

For years, businesses and practitioners alike have viewed customer loyalty as something to be won or captured.   In this view, loyalty was quantified in economic terms as share of spend, or wallet (SOW) and validated by retention, or repeat purchases.  Customers who spend more with you than your competitors are ‘loyal’ and their loyalty is evident if they come back again and again. 

However, how truly ‘loyal’ are these high spend, repeat customers?  What happens, for example, when a competitor drops it prices, launches a new product, opens up shop nearby, or launches a new website?  Do these loyal customers remain loyal, that is, maintain their high/repeat spending levels?   Too often, their true loyalty becomes fleeting in the face of differentiated or otherwise compelling choices.  In the end, consumers act rationally and will spend their wallet where the greatest benefits accrue.

Therein lies the rub.  Unless you have the luxury of being Google and are able to dominate your market, markets are complex and highly competitive.  Competitors are everywhere, choices abound and product parity is increasingly the norm.  Those who seek to compete purely on price do so at their peril, for few are those who can survive long as a category loss leader. While measuring, tracking and predicting customer loyalty is necessary, without doubt, its weak linkage to business outcomes (like revenue) is testimony to the inadequacy of this approach as a SOLE strategy. Earning customers’ loyalty is no longer enough. 

Today, more than ever, loyalty is a two-way street. As a result, loyalty must be cultivated and also given to customers

What does this mean?  The key to customer centricity, then, is a strategic customer-imbued transformation.  To compete in today’s polygamous and competitive marketplace, businesses must re-invent themselves by putting in place six key CX criteria: governance models, people, budgets, policies, procedures and systems, all of which collectively serve to empower the enterprise to be loyal to its customers

To understand the depth of what it takes to build and live this customer centric vision, I offer the following 10 qualities* of loyal businesses:

  1. They provide compelling products that continually pique interests of their customers
  2. They listen and respond to all customer feedback, both formal and informal (social)
  3. Always act with honesty, integrity and straightforwardness
  4. Place a priority on protecting customers’ needs
  5. Respond with generosity, rather than self-interest
  6. Their products and services bring out the best in their customers
  7. They care about their customers, and they show it
  8. Are trustworthy and treasured by everyone they touch (customers and employees)
  9. They are always accessible and responsive, never letting customers feel abandoned
  10. They love their customers UNCONDITIONALLY

*With thanks for inspiration to Deeksha Rawat’s ‘Top 10 Qualities of Best Friends’

Businesses that excel at these qualities are able to be loyal to their customers, helping build and solidify a virtuous cycle of loyalty between their brand, their people and their customers. Amazon, Zappos and Apple, to mention a few, have each in their own way led the CX charge and shown us all what’s possible when customer centricity is made the guiding vision.  Apple, for their part, looked at the retail landscape and thought there was a better, more customer-centric way.  It placed the brick and mortar store under the microscope and proceeded to re-invent the customer experience concept, placing customers’ needs above operations. Unlike typical retailers,  employees were trained, incented and empowered to meet and serve customers’ needs–they weren’t permitted to hide behind counters or in the stock room, nor were customers made to wait in long lines to pay.  In doing, so the very shopping experience was re-conceived and born anew. 

In every instance, true customer centric enterprises must be willing, as Keiningham put it, to ‘accept the bonds that our relationships entail.’  All of this requires vision and commitment from the highest levels, as well as the budgetary funds to craft a new reality ‘that defends and reinforces the attachment.’  Without vision, commitment, budget and systems, the best laid customer centricity plans are doomed to flounder on the jagged, unforgiving rocks of good intentions. 

Republished with author's permission from original post.

Bob Daly
Bob Daly is President of the customer-centricity and CX software consultancy, duSentio, where he specializes in combining CX-focused strategies with best-in-class enterprise software. To transform CX, he leads clients on the journey to build stronger, customer-focused cultures while empowering front-line staff to hear, track and respond to the customer voice.


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