Loyalty: True love is hard to find

There is a growing trend, especially among companies in the retail space, to develop "loyalty programmes" in order to keep customers coming back for more. But I`d like to argue that these programmes aren`t really about securing loyalty; they`re about making customers believe they will get something back if they keep buying - which is not loyalty.

As I see it, there are four levels of "loyalty" when it comes to customers. The lowest level is "habitual loyalty", where customers buy particular products and brands simply because that`s what they have always bought. Then there is "locked-in loyalty", which is common among customers of companies like the cellphone networks. These customers stay with their supplier only because the barriers to changing are so high, such as not being able to keep your cell number when you switch. The third level is "golden handcuffs loyalty", which is most commonly associated with airline miles programmes. Here customers stay with the supplier because they will lose out on reward points if they use another supplier.

The problem with these first three levels of "loyalty" is that it`s easy to become complacent and think your customers are being loyal because the numbers show you that they are, when in actual fact, given the right circumstances and the right deal, they would switch to your competitor in a heartbeat. This is not real loyalty.

It is the fourth level, "advocacy", which represents true loyalty. Advocates are customers who would not switch except in the most extreme circumstances, because they truly love your company and brand. Advocates, in fact, will do your marketing for you without even being asked to because they love your company and your brand that much. A good example is hardcore Harley Davidson riders. These are people who love the brand so much they are prepared to tattoo the company logo on their arms - try switching after you`ve done that!

It is love that defines real customer loyalty. The Oxford Dictionary defines the word loyal as "true or faithful (to duty, love or obligation); steadfast in allegiance". Customers certainly do not have a duty or an obligation to stay with you, and they have no reason to be steadfast in allegiance unless it is by choice through love. So it is love of our companies that we as sellers should be striving to build, and that, as in any other human relationship, takes a lot of hard work over a long period of time.

Traditional "loyalty programmes" are not designed to develop love; they are designed to stop customers from going elsewhere for a better deal.

So what to do? Firstly, identify your advocates, those people whose behaviour matches that of someone who loves the company and the brand. These are often your most geeky customers, the type who are so passionate about your products that you think they`re a bit weird and you just want to get away from them. But these are exactly the kind of people you should be bringing closer to your organisation.

Traditional "loyalty programmes" are not designed to develop love; they are designed to stop customers from going elsewhere for a better deal.

Guy Lundy, MD, Centric Consulting SA

can identify these people not only by correctly measuring transactional behaviours such as the number and frequency of purchases and amount spent, but also through measuring relationship behaviour like referral of new customers, attendance of product presentations or number of e-mails to the managing director. The maintenance of accurate data in your systems, data that is useful in understanding relationship behaviour, is vital to achieve this.

Communicate meaningfully and appropriately with your advocates. So much customer communication comes only from the supplier`s side, based on the assumption that the supplier knows what communication the customers want to receive. Have you asked your customers what communication they want to receive? More importantly, have you asked your advocates? It is so much easier to ask these sorts of questions in this modern age of technology than it ever has been before, but still so few organisations do so. And once you`ve identified how best to communicate, do so accurately. The other day my cellphone company sent me a birthday message on the wrong day, and I wasn`t even happy with them before that.

Use your advocates to co-create with you. Bring them into your organisation, make them feel a part of you, invite them to launches and events, show them how much you appreciate them, and all the while get them to give you ideas of how to improve things, how to make them and their fellow customers love you even more. These people already feel passionate about your company; you need to tap into that passion and learn from it so that you can grow their numbers.

Make sure that your organisation understands as much as possible about your advocates, even down to the level of understanding the needs of their own customers. The advocates are the ones with the information that can help to move you forward in their market.

And finally, ensure that the passion for your wonderful products and brand is instilled in all of your employees so that they too can identify, communicate effectively with, co-create with, and understand your advocates. Unlike a one-on-one human relationship, the love is much harder to maintain in a business relationship because it takes only one person within your organisation to upset your customer enough to set it on a downward spiral.

So real loyalty is based on a love of your company and your brand, and as we all know, true love is hard to find. Not impossible though; it`s a case of finding out who your most valuable customers are, trying harder with them and working longer at it. It`s also about being prepared to put a lot of effort into achieving return on investments that will not be immediately apparent, but that in the long run will outstrip the results of any traditional "loyalty programme". If, on the other hand, you are determined to focus on offering a deal that prevents your customers going elsewhere in the short-term, please have the decency to call it a retention programme.