Most agree that loyalty is often the holy grail of Customer Experience… But the way we define loyalty tends to vary.
Creating loyal customers is often seen as the end goal. The raison d’etre for many companies. After all, loyal customers mean more revenue, more repeat business, more referrals… More, more, more!
Yes, loyal customers mean more of the things we tend to want as CX leaders.
But how do you define loyalty among your customers? How do you know when it’s actual loyalty?
I often challenge clients with this question and it’s surprising how many really can’t define what loyalty looks like in their business.
If it’s something your organization is struggling with, don’t feel bad! Many orgs are struggling with this, because the very definition of what it means to be a customer is changing.
- How many “free” apps live on your phone?
- How many media outlets deliver content you consume but never actually “buy?”
Our world has changed dramatically in the last decade, some saying we are in an era with as much change as the industrial revolution.
What does this mean for defining what it means to be loyal?
Loyalty is a feeling…
When we say we are a loyal friend to someone, we are saying we are dedicated to that person. We are loyal in how we behave, because loyalty in that context means putting that person above others in our life.
When we are loyal customers, there is simply no way we can have the same level of loyalty as we do as loyal friends.
That’s okay — in fact, it’s good! I would be significantly disappointed if my friends’ loyalty to me was equal to their loyalty to their favorite brand of yogurt, wouldn’t you?
But leaders run into trouble by refusing to accept this and operate accordingly.
I have heard many business leaders brag about their loyal customers. These leaders tell me they are not concerned about the newest “trend” of having a web site/social media presence/24-hour customer support…because their customers are so loyal.
This argument simply does not apply to loyalty in business. Those feelings of loyalty are not unconditional. They are based on serving your customers in the best possible ways.
…And customers are loyal…until we aren’t.
Chances are at one point you had a Blockbuster Video membership card.
Remember how loyal many of us were to Blockbuster? We showed up regularly on Friday night, and our little laminated cards were well worn in our wallets. We browsed shelves with dozens of identical copies of the latest releases — a number necessary because of the sheer volume of customers coming through the door.
Chances are today you don’t have that card anymore.
One day, maybe while you were cleaning out your wallet, you found that card and had a chuckle. Why did you need Blockbuster when we had on-demand viewing and Netflix to entertain us without the trip to the store?
Between 2003-2005, as competitors like Redbox and Netflix presented more convenient and affordable options, Blockbuster lost 75% of its market value. Today, it’s all but gone entirely.
While we love to discuss our loyal customers, we have to realize they are loyal because what we are offering works – in the context of their lives TODAY.
If we aren’t constantly thinking about tomorrow and innovating accordingly, then their loyalty won’t last.
Loyal customers still want to be heard.
Another way to dismiss customers is to simply not hear them.
You may think that you’ve earned more leeway with a loyal customer, but when these customers have an issue with your organization they’re at higher risk of being disappointed.
Loyal customers often have relationships they don’t want to risk, especially in business-to-business relationships. If a customer really likes her account manager, she may not bring up how their company is shopping around for a better situation.
Suddenly, when it’s time to renew, she says “we found someone else.”
A new account manager will drop everything to hear her, as well as proactively reach out.
Too often, we stick loyal customers in the “can be ignored” category and focus instead of acquiring new customers. This is the most backward definition of loyalty.
Make sure your organization has a proactive strategy for checking with those loyal customers.
Loyalty is a great goal for any organization, and great customer experiences will continue to inspire loyalty.
Just make sure you are taking steps to ensure loyalty remains.
Jeannie