Many marketers define customer loyalty as repeated purchases (or other relevant kinds of transactions) by a customer with a company. But this is overstated and a poor conception for what drives customer loyalty. You might just be the cheapest provider or your store might just be the closest to their home. As soon as a better option comes around, you are left on the cutting room floor. That is not loyalty.
This conception of loyalty is also self-centered. It assumes that the customer has to be loyal, but what loyalty is there from the marketer back to the customer? In a survey by Kitewheel, 2/3 of marketers didn’t include this in their definitions of loyalty. But 3/4 of consumers did.
So what constitutes a more legitimate kind of customer loyalty? There has to be an emotional component that underlies and backstops the behavior. This emotion emerges when the customer feels that the company has some loyalty to them and they reflect this back on the company.
This article by Mark Bonchek in Harvard Business Review suggests that the way to achieve true customer loyalty is through reciprocated gratitude. When the company shows kindness to the customer, the customer will show loyalty back. To show kindness, the company needs to avoid using switching costs and loss aversion to artificially lock in customers. They can’t use cheap promotions to convince customers to buy things they don’t need. It is not a simple case of understanding customer behavior or customer requirements. It is what you do about it that matters. You have to show you authentically care.
Brands want loyal customers. They buy more, pay more, and refer more. But research shows that loyalty is in decline. Consumers are considering more brands and switching providers more frequently than ever before
According to Bonchek, there are a few ways to show this kindness. One is to be personable. A personalized gift inside a shipping container that surprises the customer by its presence and also by the customer insight shown in choosing an item that the customer likes.
Another way is to show a common purpose. The company can show it takes extra care to protect the environment or pay living wages or to be extra safe in the workplace. If these are issues the customer is passionate about, she will develop loyalty towards the company for advocating those same issues. The company can evoke reciprocity by proxy (which we have talked about before, such as here) which turns into gratitude.
Are there any companies in your consumer life that display any of this kindness? Do you feel more gratitude towards those companies? Does that lead to loyalty? Real loyalty, not just purchase behavior?
And what about the flip side? Does your employer show kindness of this sort to your customers? Is it a transparent business decision or do they really care?
Please share your stories.
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