Customers want loyalty, not perfection

With frustration verging on despair, marketing and brand managers worldwide bemoan the erosion of customer loyalty. In reality, the declared demise of brand loyalty is completely misunderstood.

A review of the past decade reveals that customers have not been cavalierly unfaithful to established brands; quite the opposite. Established brands have cheated on and betrayed their most loyal customers.

How? They charge more and more for less and less; they chase after the youth market or the hot segment; their ‘innovations’ frequently add more complexity than value; and their willingness to apologise and compensate for errors or mistakes is minimal.

CUSTOMERS ARE NEITHER SHEEP NOR FOOLS

Customers are neither sheep nor fools. They can sense when companies are consistently more loyal to investors, employees and regulators than to the people who buy their products and services. They behave accordingly.

Customers are not being disloyal; they are being discriminating. How can a company, for example, have the highest price and yet fail to differentiate itself from its competitors? Do they think that, like fools or sheep, we will just remain loyal to them as we did when they offered better value?

THE CENTRAL QUESTION FOR MARKETERS

The central marketing question confronting brand leaders, therefore, is not ‘How can we radically increase customer loyalty?’ but ‘How can we radically increase our own loyalty to customers?’

The distinction is enormous. It is analogous to companies that say they promote a culture of ’employee loyalty’ even as cutbacks and layoffs surge during economic downturns and mergers. Top management demands loyalty from below while regretfully declining to reciprocate.

Yet the moral authority and value of loyalty comes from the courage to hold fast during difficult times. It is the defiant unwillingness of enterprises to be loyal to their best customers that has produced the promiscuous consumer behaviour they deplore. The real sin here is that companies have wilfully confused ‘brand loyalty’ with ‘customer retention’.

LOYAL TO EMPLOYEES, BUT NOT TO CUSTOMERS?

This challenge is not complex. Companies demonstrate loyalty to employees by investing in them, compensating them fairly, tapping their expertise, and declining to throw them overboard when times get tough. Why should customers deserve any less?

This is where traditional marketing and brand advertising fail. Often it is not the brand attribute of flawless service, but the act of rapidly recovering from a mistake that wins customer loyalty and repeat business.

Here is an example: a mobile telephone operator who politely and without complaint removes rightly disputed charges from the bill. These are less acts of ‘customer service’ than demonstrations of loyalty to customers.

But how often can we here in Jamaica expect this from either of our two main mobile telephone service providers? Don’t hold your breath!

WHAT DEFINES CUSTOMER LOYALTY?

‘Brand value’ comes not from promises of perfection but from gracefully compensating for acknowledged weakness. It is well known that the most persuasive word of mouth support comes more from individuals who have had an unpleasant problem happily resolved than from those who simply enjoyed ‘good’ or ‘excellent’ service.

The willingness and ability to see a difficult situation through to success, despite cost and risk, is what defines loyalty.

Today’s consumers are far more likely to see a brand as a mask that the company hides behind. However, this is where new technology creates new opportunities for reciprocal loyalty.

BRAND PROMISES MUST BE KEPT

The brand must represent a promise about the total experience customers can expect. Whether the promise is kept depends on the company’s ability to manage its value delivery system, which includes all the experiences the customer will have on the way to obtaining and using the offering.

At the heart of a good value delivery system is a set of core business processes that help to deliver distinctive, consumer-perceived value to ensure that the customer has a pleasurable purchasing experience. And that’s where loyalty comes from!

THE LAST WORD

A family member recently accessed the services of the CDI 946-XRAY Centre for Diagnostic Imaging here in Kingston. As expected, the service was professional, but can you imagine her delight when two days later she received an e-mail from the attendant physician, Dr Raquel Reid-Stultz, thanking her for her business? Where do you think this person will go next time she needs diagnostic imaging?

Customer loyalty is not an entitlement. It is something that must be earned at every point of contact.

Herman Alvaranga is a Fellow of the Chartered Institute of Marketing (FCIM) and president of the Caribbean School of Sales& Marketing (CSSM). For more insights on sales and marketing please go to his blog at www.cssm.edu.jm