Are you earning customer loyalty, or are you buying it?

 

We can all agree that having loyal customers is fundamental to the long-term success of a business. However, there have been numerous studies that have been done that show that loyalty amongst customers is decreasing.

One such study by research company fast.MAP in late 2013 reported that:

  • 20% of consumers will switch loyalties if offered a better loyalty programme by a competitor brand;
  • 33% use loyalty programmes to try out and buy from brands they wouldn’t normally use; and
  • 96% of consumers would be tempted to switch loyalties to a competitor by a good price promotion;

Given these statistics, it’s clear that having a ‘loyalty programme’ is no guarantee that your customers will remain loyal.

In these cases, loyalty programmes are nothing more than bribes.

Sure, people like things for free. Or, more for less. Who doesn’t?

The challenge is that many loyalty programmes are not delivering customer loyalty.

So, if everyone is trying to out discount and out ‘loyalty’ programme everyone else, what happens when you can’t discount or out do your competitors anymore? What are you left with?

Nothing? Or, at best, a commodity based business? Who wants that?

Therefore, if we really want to foster loyalty from our customers, don’t we need to re-examine what loyalty and being loyal really means?

Loyalty, according to the Oxford English Dictionary, is the ‘quality of being loyal’ and loyal is ‘giving or showing firm and constant support or allegiance to a person or institution’.

From these definitions, would you say that a loyalty programme is a good way to foster true loyalty?

No?

So, what to do?

Well, rather than giving up on customer loyalty, perhaps it’s time to re-examine what loyalty really means and what it takes to foster real loyalty.

Experience and history shows that loyalty can be bought. However, it also shows that loyalty that is earned is much more robust, powerful and sustainable.

Therefore, if we want our customers to be loyal to us then do we not have to first take a look at ourselves? After all, don’t we align ourselves with people and things that are like us or embody what we want to be like?

Loyalty that is earned has a number of elements to it, including:

  1. Having a shared cause or interests that are aligned;
  2. Doing what you say you are going to do when you say you are going to do it;
  3. Showing up regularly;
  4. Being able to forgive when someone makes a mistake;
  5. But, also being willing to punish someone when an error is made;
  6. Admitting when you are wrong and then apologising; and
  7. Always acting in the best interests of the people whose loyalty you are trying to earn.

There may be more elements but how many do you have in your business?

We cannot force a customer to be loyal to us. But, if we would like to earn rather than buy their loyalty, we, first, we have to become the person or the business that people would want to be loyal to.

This post was originally published on my Forbes.com column here.

Comments

  1. Love is a gift. You can’t buy it, you can’t find it, someone has to give it to you. Learn to be receptive of that gift.

    ~ Kurt Langner

  2. Adrian,

    This is a crazy statistic: 96% of consumers would be tempted to switch loyalties to a competitor by a good price promotion. Consumers are fickle. Makes you question, is there really such a thing as loyalty?

    Annette :-)

    • adrianswinscoe says:

      Is it such a crazy statistic or is it an indictment of how most firms approach and try to cultivate loyalty?

      I would suggest it is symptomatic of the latter.

      Adrian

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  1. […] Are You Earning Customer Loyalty Or Are You Buying It? Really enjoyed this one and had one amazing stat that jumped out at me: 96% of your customers would be tempted to switch to a competitor by a good price promotion. WOW. Check it out. […]

  2. […] Are You Earning Customer Loyalty Or Are You Buying It? Really enjoyed this one and had one amazing stat that jumped out at me: 96% of your customers would be tempted to switch to a competitor by a good price promotion. WOW. Check it out. […]

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