Why Customer Loyalty Should Not be Your Goal And What You Want Instead
Customer loyalty is a popular concept and one you hear many customer service experts discuss. However, it may not be the real goal you wish to attain when it comes to finding and keeping customers. Dr. Dennis Rosen shares what loyalty really means and what your real goal should be.
Loyalty has become a goal of many businesses. Many consultants claim they will help businesses accomplish this goal. However, it is important that we define our goals correctly since they represent where and how we will direct our efforts. So consider, is customer loyalty what you are really after?
What is Loyalty?
The problem that exists is with the definition of "loyalty" that is generally used. Loyalty is usually considered a situation in which customers come back to the same business repeatedly over time. If they routinely use the same business or buy the same product, they are said to be "loyal." If that is the definition you are using-the goal you have set-then you have misdirected your efforts.
Let's Make a Deal
Reach into your pocket or purse right now and pull out your keys. If your key ring is like many, you have a plastic card on it with a scan bar you can use at the local grocery store. You scan it and they give you a discount for coming in. It's supposed to keep you coming back. In fact, these little plastic doohickies are called "loyalty cards" in the industry.
The Only Game in Town
Say a young couple moves to a small college community. When they first get there, they tend to use certain stores and go to certain restaurants because these are the best that were readily available. Maybe they don't particularly like the local discount store, but they keep going back because it's better than any other options at the time. They frequent a certain Mexican restaurant, again, because it is the best available locally. From the definition of a long-term relationship involving repeat purchase, we would say they are "loyal." But what will happen when new, larger, cleaner discount stores enter the market? What will this couple do when tastier, more interesting restaurants came to their city. Will they stay with the businesses with which we have established this so-called "loyalty?" Of course not. Would you?
Thus it is that the term "loyalty" is frequently misused because most "loyal" customers aren't really loyal, at least not the way we would like them to be. Customers who come back repeatedly because they are bribed with free things or special discounts or because they have no other real options, are actually only temporary visitors. They are renters-not owners. They are leasing- not buying. They are biding their time-not investing it in a way that will grow your business. Since the term "loyalty" is so often misused, it can be a big mistake to make it an indication of your success.
The Tie that Binds
What is missing from the common definition is an emotional tie to your business. Do customers actually get emotional about a business? Heck, yes! In the same way that Harley-Davidson owners speak passionately about their bikes, people can love, or at least like (i.e., have an emotional tie to) their retailer, business professional or supplier. These are the people who come back to the business over and over, not because they have to, but because they want to. They don't leave when a competitor offers a slightly better deal. They talk to the business owner about their likes, dislikes or concerns because they want the business to be successful. And they tell others about the business becoming an unpaid sales force. These are not simply "loyal" customers. These are devoted customers. It is the creation of these devoted customers that should be your goal because they have the potential for truly growing your business.
Creating Customer Devotion
The steps to creating customer devotion are as follows:
1) Recognize the difference between devotion and loyalty as noted above so you can set your goal appropriately.
Can all customers be made to be devoted? No, unfortunately. Some are only interested in price, or location or may crave variety. However, give n the impact devoted customers can have on your bottom line through their spending and ability to bring in other customers, developing as many as possible should be well worth your efforts.
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ABOUT THE AUTHOR
Dr. Dennis Rosen is The WinFluence(R) Expert on customer service and sales improvement. He helps retailers, service providers and professionals provide a Transformational Customer Experience(TM) to create customer devotion that leads to customer promotion. And Dennis shows sales forces how to lower customer barriers to information and change attitude to increase sales effectiveness. He is author of the book, Create Devoted Customers and the instructional audio, The Mental-Rental(TM) Sales Process. Dennis delivers value-filled presentations with an entertaining style that participants rave about. Keynotes, training and educational materials available - 800-804-4034 or visit http://www.Face2FaceService.com.