Thursday, December 24, 2015

So, What Exactly is Customer Loyalty?

Image courtesy of m.muneeb381
Do you know what customer loyalty is?

When people at your company think about "customer loyalty," are they thinking about your customers' likelihood to recommend? likelihood to repurchase? likelihood to purchase additional products?

How does your company define customer loyalty?

I had a situation recently that caused me to call on a provider to whom I've paid thousands and thousands of dollars by way of monthly premiums for the last 20+ years. I've never filed a claim, but I did six weeks ago. It's not been a good customer experience since that day.

In conversations I've had with family and friends about this incident/relationship, they've questioned "customer loyalty." What does it mean? What does it really get you? Is that loyalty about being a long-term customer and getting an experience that reflects those 20+ years as a customer? Or is that loyalty about them wanting you to be customer forever, at any or all costs?

In other words, whose side, which side, defines customer loyalty.

Why do I ask? Because, typically, after the incident I had, companies drop their customers, regardless of said "loyalty."

Where's the "loyalty" in that? For either one of us? (Because, hey, maybe I'll drop them first!)

So, again, is loyalty about an individual being a long-term customer, or is loyalty about a company "appreciating" the fact that they've had a customer for a long term?

See the difference? Is the onus on the customer or on the company? Is it about them, or is it about us? Whose loyalty? Are you doing great things for your customers? Or are you expecting customers to do great things with and for you?

Big difference. Yet shouldn't they go hand in hand?

Maybe there's a better way to make this point, but when you talk about "customer loyalty" in your day-to-day role within your organization, do you mean:  loyalty to the customer? or from the customer? That is the question. (And, I believe I know the answer.)

We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better. -Jeff Bezos


7 comments:

  1. Hello Annette, I have been and continue to be clear that customer loyalty is a marketing concept. As such it is consists of a bunch of tools and techniques for getting the customer to stick with the organisation as long as the customer is generating handsome revenues and profits for the organisation. It is certainly not the organisation being loyal to the customer. Put differently, customer loyalty is a company centric concept.

    I assert that as a customer you either have to be naive or stupid to think the organisation is loyal to you. Take insurance, if you are loyal customer you will be worse off. How so? When it comes to renewal time you will higher premiums. Why? You will accept the renewal premium without shopping around.

    We live in an age where the social ties that generate loyal behaviour are so weak as to be almost non-existent. Certainly, that is the case when it comes to organisational world.

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    1. Maz, well said. You always speak my language. Thank you.

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  2. A nice question Annette.

    I suspect (like Maz) that for most companies it is all about them, and how much money they can make.

    But then I guess that is your point precisely.

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    1. My point exactly, James. It is a company-centric notion, for sure. As customers, yes, we can choose who we do business with, but when we make a commitment to do so, we hope the business does the same for us. They rarely do. It's very superficial.

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  3. A great question, Annette.

    I believe that real loyalty has to be a two sided thing. Many brands could learn a great deal from sports teams and how they develop and cultivate loyalty amongst their fans.

    Adrian

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    1. It should be two-sided. Often, the two sides are misaligned, unfortunately. I like your example... sports teams and their fans are the perfect example.

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  4. Annette Franz,

    I posted a comment yesterday, and I notice you've deleted it. Is this how you encourage debate? If you stand by what you say, then why do you censor comments?

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