Customer Loyalty Is A Myth For 99% Of Companies

I looked up loyalty in Wikipedia this morning. Their definition is: devotion and faithfulness to a cause, country, group, or person.

Note the glaring omission from that list? A brand.

Loyalty DOES exist for companies. People tattoo the Harley Davidson logo on themselves, the cult of Apple is legend, and Amazon’s ability to consistently exceed customer expectations has created an army of fans.

So why doesn’t Wikipedia recognise the loyalty between individuals and the brands that serve them?

To help answer that question, take 30 seconds to think about the companies you are loyal to. How many companies have you chosen to buy from recently to whom you think you’re probably paying a premium? How many companies do you go out of your way to do business with? How many companies have you bought from for a significant period of time?

I’m guessing you came up with a maximum of three. My list had one name on it: Apple. Their products are both intuitively functional and aesthetically appealing and over the years I’ve had some wonderful service experiences with them.

But the bottom line is: loyalty between consumers and brands is simply not that common. So what hope does this give the average company for whom building technologically superior products and services is not an option?

Well, there’s actually plenty. But let’s lower our sights a little. Using the analogy of a couples’ relationship, rather than focus on marriage, let’s just focus on making the next date special. Then the next one. Then the next one…

So what are some of the things the average company do to make that next date special? Here’s 5 things you can start doing today.

1. Define your purpose

I’ve written about the benefits of defining your Mission, Vision and Values in the past but I still see many companies that aren’t able to explicitly answer the question: what problem(s) do I solve for my customers? The benefits of doing so mainly revolve around employee engagement but it will also help define your brand to customers. It may just be something simple like “we provide peace of mind to our customers so they can focus on other things”. (Incidentally, I just Googled that last statement and found that something similar had already been used by a global networking company in one of their white papers.)

2. Understand customer expectations

If you’re not monitoring customer expectations, you won’t know if you’re consistently delivering to them. There’s a number of ways you can gain customer understanding (six of which I’ve written about in the past) but if time and resources are an issue for you, just spend time each month in front of customers. Go out on visits with your salespeople, spend a couple of hours on the phone in your contact centre, or get behind the counter in your store. Get to know the people who choose to do business with you, the problems you solve for them, and why they come to you rather than your competitors.

3. Map the customer journey

Take a look at your company from the outside-in. Customer Journey Maps are an empirical, visual representation of how a customer experiences your company. They show the phases a customer goes through in a discrete transaction with you; the various touchpoints they will use, their goals at each, the critical touchpoints that have a higher impact on their loyalty, and the factors that affect the outcome on customer emotions. They document your customer experience from your customers’ eyes, helping you to understand how customers interact with you and where you need to focus your attention to improve. Walk a mile in your customers’ shoes to answer the question: “would I do business with me?”

4. Engage your employees

The Service-Profit Chain Theory hypothesises that satisfied employees result in better customer experience. The authors submit that satisfaction of service workers was determined by their ability and authority to achieve results for customers and was thus determined by five factors:

1. workplace design,
2. job design,
3. employee selection and development,
4. employee rewards and recognition, and
5. tools for serving customers

So spend some time today analysing your reward and recognition systems. Are you motivating your employees to provide great CX with your incentives (or are you just rewarding sales)? Are you giving them the tools they need to exceed customer expectations? In the longer term, analyse your hiring and development policies and workplace design. Make sure you’re getting the right people in the door, you’re then consistently challenging them with their development plans, and you’re giving them an environment to work in that you’d be happy working in.

5. Make it easy

In 2010, a study of 75,000 people who had interacted with contact centre representatives was released. It found that reducing the amount of effort that customers needed to expend to resolve their issues increased the likelihood that those customers would return to the company, increase the amount they spend, and talk positively about it. Going back to our couples analogy, that sounds like a pretty good date doesn’t it? The five tips offered in the article to help “make it easy” were:

1. Don’t just resolve the current issue – head off the next one. (Anticipate customer needs)
2. Arm reps to address the emotional side of customer interactions. (Make a connection with customers)
3. Minimise channel switching by increasing self-service channel “stickiness.”
4. Use feedback from disgruntled or struggling customers to reduce customer effort. (Act on poor feedback to improve future interactions)
5. Empower the front line to deliver a low-effort experience.

A lot of emphasis is placed on the holy grail of customer loyalty by consultants, speakers and authors but in my opinion, chasing it puts the majority of businesses under too much pressure. Instead, focus on making your next customer interaction special using any or all of the five methods I’ve mentioned in this post and before too long you’ll have achieved the same end goal: customers who have been with you for a long time that wouldn’t want to go anywhere else.