Why Focus on Loyalty?



Loyalty, always a high-sounding word, is ever more in the news and on our minds.

Whether it’s loyalty to a sports team, a political cause or ideology, a leader, a brand, a long-standing relationship, a coffee shop, or the family doctor, we seem to be more concerned with it and discuss it more than ever before.

I’ve been doing (and continue to dig into…) research on loyalty. Specifically, I am interested in:
  • What the drivers are for customer loyalty to businesses
  • How these drivers relate to relationship and dialogue stages
  • Factors / components that are online, off-line, and a blend of the two
  • Other components or influences that I have yet to uncover
While this will not be the “Unified Theory of Loyalty” (with apologies to physicists everywhere….), I wish to come to a clearer understanding of what establishes, builds and maintains this stance in customers and people in general. Humans are complex, absolutely unique individuals who, nonetheless, exhibit certain related behaviors and tendencies. If this were not so, the social sciences would have to just fold up their collective tents and take up hospitality management.

As I continue to research this topic and make discoveries, I will be writing about them here first. The eventual end-product is likely to be a paper, some podcasts, a video or two….likely a combination of all of the above.

So stay tuned!

Now, having gotten the preface out of the way, let me get to the first bit:

Why Loyalty?

Good Question…

Loyalty is critically important, both to business and to human beings.

I run analytics on my blog regularly and have noted that the most popular article I’ve written for the past year is about sincerity. This topic is high on our minds.

While not identical to loyalty, sincerity has a direct correlation to loyalty. Customer experience is a baseline for loyalty, and if the customer detects a lack of sincerity on the part of you or your business, they are less likely to grow into loyal customers. One factor I’ve noticed in a number of types of loyalty to which this doesn’t apply as strongly as you might think are those customers who have something of a “Reality Distortion Field” around their beliefs regarding the target of their loyalty…that is the subject for another article, and probably some more research….

The saying for businesses is that it is much cheaper to keep a loyal customer than it is to “create” a new one. Loyalty is cost-effective AND they tend to spend more with you. That isn’t to ignore business and market expansion, but heaven help you if you focus on new customers to the detriment of nurturing your loyal ones. The activities (or lack of activities….) that will drive away loyal customers are likely to at least hinder the acquisition of new customers. Eventually, your business will dry up, thanks to the post-loyal customers letting your potential new customers just what you’ve done to drive them away. At that point, you will need to either (a) radically change your behavior and be in the unenviable position of trying to rebuild shattered trust, or (b) give it all up, close the doors, and go do something else. Lost loyalty is devilishly difficult to rebuild.

Another reason I chose to gain a deeper understanding of loyalty is because of the “being human” interest I have, personally and professionally. It pays for every business person to dig into the ways peoples’ minds work, individually and collectively, online and off-line. Knowing and understanding your audience and customers can only pay-off for you, so getting some social psychology into your consideration and planning can only help.

Most of the companies I work with want to know what they can do to “move the needle” for their business. Since loyalty is so attractive, they want to know how to:
  • Develop loyalty in new customers and audiences
  • Keep Loyal customers
  • Move Neutral customers into becoming Loyal customers
  • Decrease the number of so-called Vulnerable customers by moving them further up the Loyalty Spectrum
Sincerity and discretion are good places to start.

These are not opposites. You can be both discrete and sincere in communications and relationships.

Discretion means that you take into account with whom you are having a conversation, what is appropriate to talk or write about, allowing ample space for non-judgmental listening, taking greater care in choosing the words and tone you use in communications, and treating these people as you wish to be treated (that’s right….the proverbial Golden Rule…).

The sincerity characteristic of the conversation includes your intentionality about what you say, your interests, expectations, ideas, etc. Be consistent…which is where honesty holds the key. If there is only one “story to tell”, you don’t have to try to remember which version of the truth you told this customer. Ask the customer to tell you how they interpret what you say, too. There is less chance of miscommunication and focuses on the clarity of the message this way.

While sincerity is certainly not the ONLY attribute of loyalty, without it loyalty is much less likely.

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