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On Loyalty Management: Who Is Loyal To Whom?

By Adam Sarner | October 13, 2016 | 0 Comments


I got a letter from my auto insurance company the other day. I opened and read it. It said: “Thank you for being a loyal customer”!  It was a nice card, a bit out of the blue, but a nice acknowledgment I suppose.  But then I started thinking about how many years I have been with them and how I haven’t comparison shopped and reached out to them to ask for my rates to be reduced (something everyone should be doing on a yearly basis by the way).  I have been procrastinating and that card just made me feel bad. I am just wasting money.  Truth is, I am not a loyal customer, I am more like a lazy one. Why did they have to remind me that I am lazy?

But just that very minute, it occurred to me… who should be loyal to whom anyway?  Whenever I think about loyalty and advocacy programs,  I think they might have this whole thing backward.  How are these companies showing their loyalty to their customers?  What is their approach to prove, time and time again, that they are the right choice, and are routinely getting an understanding of how they can meet and anticipate future needs?  How are these companies becoming advocates and champions for their customers?  I think for companies to get “loyal “customers they first need to prove their own loyalty.

Here are five definite signs that your company is proving that it is loyal to your customers and in turn, getting customers to stick with you and continually choose you over others:

1. You appointed a customer advocate: Someone at C-level who has the position of a chief customer officer, or a customer experience person or whatever. The point is that there is someone in the organization that represents the customer point of view and that he or she has the clout to inject those views in decision making. Someone that has the customer’s back.  This is a big one.  There is talk about these people but they are still unicorns.

2. You invest in user/customer community groups: You routinely get together segments of your customers, and ask them how you can make it easier to do business with them. Do this in person, on the phone and on-line. Share your results with your customers, let them know that their input made a difference. Many like to get involved because it means a better experience for them overall. Pay them for their time.

I have been covering customer relationship management (CRM)  for over 18 years and have seen hundreds upon hundreds of projects.  I would estimate that over 90% of the companies developing those projects never asked their customers about the relationship or “journeys”  or anything they were developing for them.  I know this because I asked if they were every time.

3. You have a process for changes in NPS: Net promoter score is not the end-all, be-all indicator of customers having great customer experiences and a great relationship with you, but it’s a start. What happens if scores start trending down? What do you do if the customer has so-so profitability? Ask them to score you and then ignore it or continue to treat them like a so-so profitable customer and I guarantee they won’t magically move to profitability.

4. Your front line employees are incentivized and empowered to show loyalty: This means on the phone, at an event, at corporate or anyone who connects with the customer has guidance and decision-making power to be an advocate for a customer. How many companies really have this?

5. You treat different customers differently: One-to-one personalization is another unicorn and I have always found it a bit creepy for companies to have a “one-to-one” relationship with customers anyway. It’s going overboard. However, in proving your loyalty you have at least developed personas and segments and are creating separate contextual approaches and treatments for each.  You express those treatments when they call you on the phone, visit your website, give them a recommendation on what to buy or send them an email.

Monday, Gartner tackles a week of Loyalty Management. Clients learn how companies can figure out if it’s working and showcases marketers with a plan for doing loyalty right.

The Gartner Blog Network provides an opportunity for Gartner analysts to test ideas and move research forward. Because the content posted by Gartner analysts on this site does not undergo our standard editorial review, all comments or opinions expressed hereunder are those of the individual contributors and do not represent the views of Gartner, Inc. or its management.

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