Is Customer Loyalty Still Alive and Well?
We want to hear your thoughts on how you feel about customer loyalty.
What are you doing to keep your current customers and let your dedication to customer service shine through when you gain new ones?
I saw this link, with the heading Is Customer Loyalty Dead, through one of the groups I belong to on Linkedin. It came from Ted L. Simon. The autor of the article is Mike Linton. I think the ever expanding opportunities for consumers to connect and engage with one another and share their thoughts on everything—including your brand—has made it necessary for your company to develop a new dynamic and approach. Not only to keep your loyal customers, but to gain others that will become loyal to your brand, products and services.
This article from Forbes.com, written by Mike Linton, can be the basis for a great conversation on how you are going to plan to maintain and, better yet, build your customer loyalty.
Best Nicole
Are you more loyal to brands than you were 10 years ago? Are there any businesses that provide such a great product or service that you would never price-shop, and you’ll declare your brand loyalty across your social networks? My guess is that you and your customers are much less loyal than you were in the ’90s.
Procter & Gamble taught me that it’s easier to sell more to people who are already using your brand than it is to convert them from a competitor. I still believe that theory. However, consumers are more demanding than ever and earning their loyalty gets more difficult every day.
The basics for loyalty used to be a good product or service, delivered reliably at a fair price with some advertising mixed in to remind consumers why they should choose your brand. Exceptional customer service and a good loyalty program could seal the deal by rewarding users with miles, cash back, special rewards or VIP treatment.
All of that is still important, just less so. Companies must do everything they used to do and also ensure that their value proposition remains attractive to a more cost-conscious population. Expedia, Travelocity and Kayak now show travel pricing that used to take hours to track down. If you’re dissatisfied with your in-home phone service, you can choose from a number of providers. Many industries–like autos, airlines and banks–built their models on the consolidation of products, services and information. They could use hidden profit margins from that chain to fund exceptional service and other loyalty efforts. But now consumers are disaggregating those bundles. Companies that funded loyalty via hidden prices or from post sale service have to change. What should you do?
First, acknowledge that this is the new world order. An auto salesperson recently explained that he had lost a sale after three meetings and numerous calls, because the customer used the Internet to find the same car for $100 less ten miles away. Was the selling expertise worth $100? Was the customer unreasonable? Either way, the customer’s ability to split his car buying into three phases (information, search and purchase) is clear.
Maybe you used to be able to carry a 15% premium to generic brands, but now generics are better and ingredients are on the package for every consumer to see and compare. If you don’t have the value proposition to back up your pricing, your marketing and loyalty programs had better be exceptional. Short those and you have nothing left but your reputation. And that won’t last forever. Get your value proposition right or prepare to compete as a commodity.
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