Why Loyalty is Not Enough

Have you ever realized that the way you are looking at something has been wrong all along? Your view changes in an instant, and you wonder why you did not see the flaws in your thinking long before now? It definitely happens to me; in fact it most recently occurred a couple of days ago when reading an article about customer loyalty. Larry Freed, president and CEO of marketing analytics firm ForeSee, took the stance in his headline that "all loyalty is not created equally." He got my attention, but was this another hyped-up headline with little substance to follow? No, it was mindset changing for me.

Mr.Freed contends customer loyalty is not a single-dimension construct. Two types of loyalty are behavioral loyalty and emotional loyalty. Behavioral loyalty seems to be the aspiration that most marketers have for their customer relationships. After we acquire customers, the aim is to develop repeat purchase behavior. They buy our brand and not competitive offerings. Loyalty can be encouraged by rewards programs, incentives, and price breaks. If we achieve repeat buying behavior from enough customers we win, right? Unfortunately, Mr. Freed says "no."

A significant limitation of building behavioral loyalty is that the willingness to buy over and over may have less to do with the brand and more to do with the system that promotes loyalty. An episode of Seinfeld makes light of the limitations of behavioral loyalty. Elaine is on a quest to get a loyalty card punched 24 times at a sandwich shop so she can be a "submarine captain" good for a free sandwich and a captain's hat. She did not have loyalty to the shop (she said she had eaten "23 bad subs") but she really wanted the rewards. Of course Elaine is a fictional character, but does her behavior mirror that of some customers who are hooked on the system, not the brand or customer experience?

What is the alternative, you might be asking. According to Larry Freed it is building emotional loyalty. Unlike behavioral loyalty that can be bought using incentives, emotional loyalty is a true feeling of connection with a brand resulting from satisfaction with the brand experience. It is true loyalty in that such a bond with your brand not only results in repeat purchases, but it leads to other behaviors like advocating for your brand via word-of-mouth and willingness to pay price premiums. To get to this point, Freed encourages a focus on customer satisfaction as the catalyst for building emotional loyalty. Simply put, what do customers want from their experience with your product or service?

Loyalty is the holy grail of marketing, but understand the difference between loyalty to your marketing system and loyalty to your brand. Reaching the pinnacle can be achieved by starting at the foundation, returning to basics having a better understanding of what customers want from you.




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