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Customer Loyalty – time to kick out the leaky bucket….

October 2, 2015

Customer loyalty is a divisive topic – for many brands it is their stated aim, while some commentators have said that loyalty doesn’t even exist. But perhaps the real point about customer loyalty is that it’s complex, and it changes.   As a society we have become less deferential to all forms of authority (especially corporations) and technology has placed more power in the hands of consumers. So nowadays loyalty to brands can mean a lot of different things – it can be highly emotional, when customers get great experiences and buy into the brand’s values (like with first direct or John Lewis), but customers can be ‘sticky’ through inertia, convenience, or just the lack of an appealing alternative.  Many customers continue to bank with the same bank, or shop at the same supermarket, even though their experience is mundane and they have little emotional connection to the brand.

Those customers who are seemingly loyal, but not emotionally engaged, are at risk – not only because of what your competitors are doing, but also through the wider experiences that they have with your brand. I finally decided to shop around for car insurance because I kept seeing ads for great deals for new customers from my insurance company, one I’d been with for many years. And while the success of discount supermarkets like Aldi and Lidl has been driven by their value for money positioning, the established supermarket brands (who have seen customers leave in numbers) have not over recent times delivered a memorably positive experience.

A truly customer centric company can’t operate on the old model of trying to constantly fill a leaky bucket with new customers while existing ones fall out. This is symptomatic of organizations that are in rigid silos which manage brand experience (focused on acquisition) and customer experience (focused narrowly on customer satisfaction) separately.

To escape from this situation an important first step is to understand the lives of consumers and all the experience points that comprise their relationship with your brand. These experiences then need to be evaluated in a holistic and consistent way so that that brand and customer experience strategies become integrated.

To learn more about how experience and relationship management can build customer equity read ….. 

For more information please contact John Banerji at john.banerji@gfk.com.

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