Actions speak louder than words, but actions are easy to misinterpret, and marketers who misunderstand the actions of customers can damage their brands’ business and marketing results. Today, many marketers are measuring what they believe to be loyalty but is actually something very different and much less. Reminding ourselves what the word “loyalty” really means can improve our brands’ marketing analytics, customer experience, and customer retention.
In my new report for marketing leaders, “How to Align Customer Experience With Marketing Channel Operations,” we explore the customer journey in the age of the empowered consumer. Today’s smart devices and social media do more than just change the ways people consume information and see ads–they also alter the way consumers consider, select, use and advocate for products and services. As a result, one of the key goals for customer experience programs must be to map a journey that identifies new ways to deliver not just satisfaction and usage but loyalty and advocacy.
Understanding the difference between a satisfied customer and a loyal one is vital if marketers are to deliver long-term success with customer experience programs. For too long, brands have labeled as “loyal” any customer who consistently buys the same product or service, but this definition has a significant flaw that can lead to customer experience mistakes: Although people demonstrate loyalty through action, consistent actions can be caused by many things other than loyalty.
Loyalty is defined (by everyone but marketers) as “a strong feeling of support or allegiance.” Loyalty, in other words, requires intent. People are not loyal because they unthinkingly repeat the same behavior; they are loyal because they actively intend to be so.
There are many reasons we may buy from the same provider that have nothing to do with loyalty. We fly with the same airline because they service the routes we need; we repeatedly shop at one grocery store because it is convenient; we stay with our bank because switching is an involved process; and we return to the same discount chain because they are cheapest. In each case, typical marketing measurement approaches would identify us as loyal customers, but we may not, in fact, be very happy and not at all loyal. If a new airline adopts our routes, a more convenient grocery store opens, bank fees shake us out of complacency or a store offers better prices, we may happily abandon old buying habits for new ones. In these examples, it is hygiene factors of convenience, price, habit or lack of options that drive actions brands may mistake for loyalty.
Loyalty is intent that drives action. You may live an hour from a theme park but still travel cross country to visit Disney World. You may walk past four restaurants that serve coffee to get to Starbucks. You may be waiting to buy the next iteration of the iPhone even though similar Android devices at lower price points are available today. And you may wait for your favorite hairdresser even if others are immediately available. Hygiene factor may contribute to loyalty, but true loyalty defeats concerns of convenience, price, and habit.
Your customer experience program should seek out and remove the dissatisfiers that may exist, but marketers must never forget that those are the table stakes and not the motivators that drive loyalty and advocacy. Achieving loyalty takes something more, and if we create the right conditions for loyalty, consumers will seek out our products regardless of price, convenience or habit.
Actions may speak louder than words, but intention speaks loudest–and marketers must be sure they understand the intent of their customers. If your brand settles for loyalty measures that merely count transactions or interactions without validating those are driven by a proactive sense of brand loyalty, it will struggle to achieve its business, marketing, and reputational goals.
If you are a Gartner for Marketing Leaders client, please review our new report, “How to Align Customer Experience With Marketing Channel Operations,” for more information on how customer experience can drive loyalty and advocacy in the age of the empowered consumer.
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6 Comments
Very thought provoking Augie. Thanks.
https://twitter.com/SomeshBhagat/status/731215624035258368
Hi Augie – to add, I think loyalty may not mean repeat purchases too…just as vice versa is not true.
I may be loyal to a brand but may not be a repeat purchaser as it may not fit my current needs. Say I liked Suzuki cars very much. But I do not buy them anymore. Though I am loyal. I think Suzuki makes some the finest cars in the world. I am a strong advocate and will recommend the same to anyone who has the type of needs it fulfills I think. What do u say? Bye – somesh
I think that’s an excellent point, Somesh. Of course, if you have a loyal customer and fail to provide something that fits their needs, that sounds like an excellent customer experience opportunity to develop a new product or service. The opposite is also an opportunity–if you have repeat purchases with low loyalty, there is an opportunity to change the relationship before you lose the repeat purchases! I think the difference may be that in the former situation, marketers tend to be aware they have loyalty they are not activating, but in the latter, they too often believe they have loyalty and thus fail to act before it is too late.
Thanks for the dailog!
Hi Augie,
Nice article. I want to understand from you does loyalty ONLY leads to repeat purchase? Because as per my opinion, It can’t be only loyalty; there can be several factors on top of loyalty because now-a-days consumers are hip hopping across brands. So, there has to be a mechanism which tracks active as well as passive data from the consumer about their activity and then it can be checked for understanding actual purchase! Would love to hear your take on this.
Kind Regards,
Yatindra Jha
Insights Board Research
That’s a good question, Yatindra. Loyalty is contextual–if customers are hopping across brands, that would seem to indicate either the brands don’t have loyalty or they have failed to earn loyalty in the right context. I may be loyal to a retailer for casual clothes, but that doesn’t mean I’m loyal when in the market for business attire, for example. Of course, a brand that earns loyalty for casual clothes has an opportunity to build on that loyalty and extend it into other categories.
I agree consumers, particularly younger ones, tend to be brand explorers, and there is a trend toward less loyalty; nonetheless, there are brands that succeed in earning loyalty and do so in multiple contexts. Take Apple, for example. Before the iPod and iTunes, who would have thought the tech brand would build loyalty around the music context? Yet they did so by extending the existing loyalty they earned in mobile devices and PCs and by offering a compelling product. (Today, they seem to be losing some of that loyalty since newer startups have offered subscription models that iTunes failed to embrace with sufficient speed, which just goes to show that loyalty is hard to win and easy to lose, and it depends more on customer experience than messaging!)
Hi Augie,
Thanks for writing back and making all of us understand actual context of loyalty along with a great example. Appreciate your efforts for the same. Looking forward to have wonderful post from your end in future also which would help millennial like us to understand industry better.
Kind Regards,
Yatindra Jha
Insights Board Research