Is Customer Loyalty Dead?
There’s a widespread belief that customer loyalty is a thing of the past. Customers, we are told, are now driven more and more by price and convenience, and less and less by relationships.
So, is customer loyalty dead?
Of course not.
If customer loyalty was dead, how would you explain Starbucks?
If customer loyalty were truly dead, so too would be Apple, Starbucks, Four Seasons and thousands of other organizations thriving in highly competitive market segments. Customer loyalty is not dead. In fact, it is more important than ever.
What has changed is our understanding of what customer loyalty really is.
Up until 15 years or so ago, any company that had a steady, reliable customer base was said to have “loyal customers.” In a great many cases, however, customers weren’t doing business with that company because they wanted to. They were doing business with them because they pretty much had to.
Options were limited — in some cases to just a single supplier. When you think about it, these companies didn’t have loyalty. They had hostages.
The hostages have been set free, and many organization still haven’t figured it out.
The hostages have been set free
Customers now have more choices, more information, more influence and more willingness to walk away than ever before. Price and convenience matter, of course. They always have. But they are not substitutes for loyalty. They are simply factors customers weigh when deciding who they trust with their time, money and confidence.
The companies that are excelling in today’s economy are the ones that understand loyalty’s true nature. Loyalty is not created by points programs, discounts or the absence of alternatives. Loyalty is created when customers come to you because they want to, not because they have to.
What brings customer back is Trust
Customers return when you care about them. They return when you are competent, and when they know know you’ve got their backs.
Trust is the real foundation of customer loyalty.
Ask yourself these 4 questions
Do you want to increase the loyalty of your customers? Ask yourself these questions:
- Why should your customers trust you instead of your competition?
- Do your customers believe you genuinely care about them?
- Do your customers believe you are competent and able to deliver what you promise?
- Do your customers believe you will do the right thing when it matters most?
Your ability to create true customer loyalty will be in direct relationship to your ability to answer these questions.
If you can’t answer them, you had better think of something soon. Because the hostages are free, and they won’t be hanging around much longer.
