Try this. Conjure up the name of a brand - one that features in your life. Now, without thinking too deeply, is that brand on your side? Or does it feel that the company in question might be more focussed on delivering profits to its shareholders? I pose this simple question because it evokes an immediate response. One that forces you to process a vast number of criteria in a flash. It’s a simple way to solicit an instant indication of your brand loyalty - or lack of it.
Today’s brands need to fight on so many different fronts to win our love and respect. Just think Apple. Not content with being just a hardware manufacturer, Apple has launched services like Music, News, TV and Pay. It launched beautiful retail stores where it can humanise and demonstrate Apple’s special magnetic magic. It spends vast sums of money and effort optimising the Out Of Box Experience (OOBE) for their physical products. Each positive customer experience at every touchpoint adds together to create and amplify customer appreciation and loyalty.
But many of today’s brand relationships are dubious in nature. They’re cloaked in so much complexity, we have learned to trade suspicion and doubt for the practical benefits these brands bring to our lives. A good example might be Facebook or Google - both of which offer masses of utility while sucking our private data to use in ways that we are not always privy to. Nevertheless, we tolerate this semi-Faustian arrangement. These brands have become our ‘frenemies’.
And then there is a large cohort of companies that have simply forgotten the connection between customer service and customer loyalty. The very people who fund a business’s existence are often the ones being treated most shabbily. Anyone with a mobile phone contract knows that by allowing it to renew automatically, you're least likely to get the best deal - let alone a discount. It usually makes much more commercial sense to cancel a contract at the end of its term and shop around for a better one. The same can be said for insurance policies, maintenance contracts, pretty much anything that has a fixed term renewal.
The final cohort are the companies that have sold their services to us for years at one price, only to remove services or support unless we are prepared to pay for a plethora of new products, features or services that we have no need for. My personal bête noire here is Adobe - a company that forces most of its users to pay a subscription for products that we never wanted and will never use.
So, as you can see, businesses are often working against the best interests of their customers. There is the sense that we will suck up so much pain or, that momentum will carry the aggrieved onwards. Whole sectors compete to offer the least worst service - mobile carriers are truly excellent at this.
Why have things gone so wrong? Any marketer will tell you that customer retention is almost always a cheaper activity than new customer acquisition. So squandering customer loyalty is clearly insane.
The accepted wisdom in marketing circles is that the essence of relationships with customers has become data centric. Customer lifetime values are managed and measured with statistics and data. Yet at its heart, customer loyalty, like all relationships, is driven purely by emotion.
Big telcos seem to believe there are simple statistical reasons why customers churn. What they forget is that if you find yourself paying more than someone else, or you are feeling aggrieved about poor customer care, you may leave logic behind. To understand how customer support simply fails, just look at the fury that frequency bubbles over on social media.
Despite all this, the rules to grow a business are not secret.
- Get more customers.
- Get them to buy more.
- Keep them for longer.
Sales growth is not driven by points, miles, rewards or prizes - success is driven by everybody winning - shareholders, employees and customers. And winning starts with honesty, transparency and above all, integrity.
Forget those Terms and Conditions that are written by a hundred lawyers. Forget pricing models that are designed to drive up airline seat yields and leave ticket holders on the tarmac as they wait for the next flight.
End downgrades and price hikes. Start thinking about customer lifetime value meaning precisely that. A customer that you keep for life.
As brands start to realise the value of trust, they will grasp the financial significance of serving as a portal to fresh products and services - not presently part of their offering. ‘If I like Apple or Tesla, why wouldn't I buy electricity from them? Or home security? Maybe medical insurance?’
There is no doubt that a small number of trusted providers will claim more of our wallets in future. And the number of brands that we are prepared to have such meaningful relationships with, will shrink.
Ask yourself these 3 crucial questions:
- How long can I keep my customers?
- How much is a customer worth?
- How much would I spend to get one?
Customer Loyalty has never been more important - nor has it ever been so badly under appreciated or poorly understood.
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