I put "customer loyalty" in the same category of happy myths as those of creation science, voter intelligence, and brand equity.
Most loyalty programs are just another form of sales incentive. Call them what you want, but point or mileage accrual engenders little more trust or conviction than an annual holiday bonus check. Repeat customers as likely to be trapped by habit or circumstance as by any sense of commitment.
Dogs are loyal to their owners. People are rarely, if ever, loyal to products and services.
That is, other than every time they buy or use them.
Loyalty isn’t something that builds over time as much as gets delivered, proven, and enjoyed every time consumers interact…either with what they’ve bought, or with who sold it to them. It’s not what they do, but what companies do.
In a very real sense, loyalty is something that companies provide to their customers. And it’s real-time.
This is one giant bummer for all of the gurus who preach about emotional relationships with brands that can transcend demands of price and performance. Branding is supposed to create happy myths with which customers engage. In this alternate reality, words speak louder than actions, and companies can invent things to say that don’t necessarily connect with what they do.
In reality reality, most of this branding is nonsense.
What brands businesses instead aren’t the touchpoints of communications, but each and every instance of customer experience. It’s not enough that the main ones are more likely positive than not, or that customer complaints result in some after-the-fact make-good reward. Don’t record the phone conversation "to ensure customer satisfaction," or "for training purposes."
Satisfy me. Every time. Prove your loyalty to me, and I’ll keep giving you my money.
So, for instance, while I’ve been a happy Verizon customer for many years now, my phone recently crapped out, so I went to the store to get a cheap replacement. Only there’s no such thing; instead, all the harried salesperson could do was "move up my two-year renewal period" and, if I committed to another 24 months of service, I could get a $50 credit on buying a new $100+ phone.
This was Verizon challenging me to prove my loyalty, not earning or reaffirming it.
Blockbuster does the same thing when it wastes lots of money on mailers and library title deals with no apparent regularity, then refuses to credit an account when a frequent renter missed the new release return window by an hour (not a real story, mind you). Ditto for the airline that keeps its super-dooper elite customers waiting in the dark on a delayed flight, or just as bounced from a cancelled flight as everyone else. So does every nuisance IVR menu that dares customers to reenter name, rank, and serial number, or Internet retailer that doesn’t pay postage on returns.
There are a zillion little moments in which companies can prove loyalty to customers, only few are realized or delivered as such.
I think that’s what makes customer loyalty a myth.
Nobody these days has a residual desire to reward companies when they come up short. Yet there are immense opportunities to use those instances to benefit the business and the brand.
Original Post: http://dimbulb.typepad.com/my_weblog/2008/01/customer-loyalt.html
