We’re creatures of habit. When it comes to the crunch, we’d prefer to stay with the brands we know and trust because staying where you are and doing what’s familiar is easier. This may explain why 94% of customers told the CEB they would still buy from a company that had given them a ‘low-effort’ service experience.
Yet this is not loyalty. This is putting up with things because staying outweighs the inconvenience of switching. As ever more business happens digitally and switching from one brand to another becomes simpler, the pseudo-loyalty borne of convenience and making do is under threat.
According to Accenture, 46% of consumers are now more likely to switch providers than they were 10 years ago. 78% of consumers are not loyal to any particular brand (Nielsen). These are figures that could lead you to question whether there’s any such thing as loyalty in the digital age – and whether standard marketing practices have been responsible for driving it to the brink of extinction.
With the prevalence of new customer deals driving a switching rather than staying culture over the past 20+ years, you could argue loyalty was an endangered beast even before digital really found its feet.
Instead of loyalty, customers find themselves ‘entangled’ in relationships of mutual convenience. With their details already on your system, and a history of successful transactions and preferences locked into your database, you make the buying process easy.
There’s no emotional connection. But there is a connection based on pragmatism – an attitude that as long as you continue doing what you do well, the customer will stay.
So given the power of entanglement in the digital world, is loyalty even a goal worth pursuing anymore? The data says yes. Truly loyal customers buy more frequently, spend more heavily, are more likely to be early adopters of your next product and are more likely to tell their friends about your existing ones. It just needs to be the right sort of loyalty.
Loyalty means looking again at customer satisfaction
Satisfied customers are loyal customers. Or at least, that’s the conventional wisdom. Yet in a digital landscape, satisfaction (at least in the ways most companies measure it) may be enough for entanglement, but it’s not sufficient to keep customers loyal, as Nielsen’s figure above demonstrates.
Terry Melaugh, author of The Lost Art of Customer Service says 80% of businesses believe they are providing a superior level of service, yet only 8% of customers believe they actually receive superior service.
Businesses, he says, are deluding themselves and one of the reasons for that delusion is that, all too often, satisfaction is based on 20th century measures. In a digital world, satisfaction is more than joining the dots between product quality, price and delivery speed. It’s a complex network of interactions – of social media, instant feedback, live chat and user experience. Each is a touchpoint of customer satisfaction, and each is an opportunity to drive loyalty.
Identifying your loyalty touchpoints and understanding how to score them as loyalty opportunities, sales opportunities, service opportunities, complaint opportunities or attrition opportunities is how you build real customer understanding.
Loyalty is built on personal engagement
According to Elite Daily, 62% of millennials say that if a brand engages with them on social networks, they are more likely to become a loyal customer. Yet as our experiences show, it’s not merely the quantity of engagement that counts; it’s the quality.
Personalisation lies at the heart of success, and you can’t personalise effectively unless you understand the people you’re communicating with. That means making sense of the data you hold; of looking at it in new ways to gain new insights about the people who could be your next loyal customers.
Equally as important is what you do with that information. Engagement can only feel personal if your communications shift from the template to the tailored. The content (words and images) has to grab you as an individual. It has to be relevant. And it has to feel natural, not like a ‘copy and paste’ job masquerading as personalisation, a growing issue with retargeting.
Digital loyalty = real loyalty?
It’s tougher to stay at the top of your customers’ pecking order in the digital world. That’s because earning loyalty is an ongoing process. Being amazing once, twice, three times won’t count for much if you then make a mistake and fail to deal with it appropriately (or worse, repeat the mistake).
Because of that, it’s easy to think of customer loyalty today as short-lived – something that exists only as long as your latest voucher code is valid.
Yet that’s not the case at all. For organisations that do it right, loyalty – and the bonds that tie consumer and business together – can be stronger than they ever were.
In order for that to happen, businesses need to change their definition of what loyalty truly is. Loyalty isn’t about selling more, more often. Instead, loyalty comes from continuous excellence, and cultivating the relationships and environment that make individuals want to buy more, more often.
Consumer loyalty, then, is now far more akin to the personal loyalty we display every day. You can’t take it for granted. You have to work at it. But get it right and it can be a powerful thing.