Let’s stop talking about customer loyalty

by Guest Contributor Dr Susanne O'Gorman | June 12, 2019

Author: Dr Susanne O'Gorman

Dr Susanne O'Gorman
Insights Division, Kantar
Global Head of Customer Experience
https://www.linkedin.com/in/susanne-o-gorman-52544a21/


A couple of weeks ago I came across an article titled “The Death Of Brand Loyalty”. The author argues that because of a generational shift the concept of loyalty has lost relevance and nowadays it’s all about constant change. But is that really true?

While reading this article I was standing on the platform waiting for my train. It has not arrived when scheduled. Even after 30 minutes there is no announcement saying it is late. I opened each of my three public transport apps in a desperate attempt to find out whether I would be in time for my meeting and the one thought going through my mind is, ‘No, the real reason for customer churn is simply that many brands today don’t provide a customer experience that makes people stay with them’. If I could have found an alternative to that train I would have taken it!

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The concept of loyalty in itself is coming from the wrong perspective. We hope and expect our friends, partners, spouses to be loyal to us and companies want their customers to be loyal to them. Whereas the appropriate question should be, what do I need to do to make my customer stay, spend more with me and recommend me to their friends? And this is where the problems start. Kantar’s most recent CX+ report for banks in France showed that less than half of all banking customers receive relevant advice and information from their banks, only one third felt appreciated as a customer and a small minority of 16 percent stated they were delighted with the last interaction. 

I don’t dispute that there is a generational shift taking place. Expectations of consumers are changing rapidly across generations and countries. And this makes it even more urgent for brands to stop talking about customer loyalty and start to become customer-centric. Customer-centricity in its true definition (and not just as a buzzword) implies setting up an organisation from an ‘outside-in’ perspective: the customer is at the heart of the organisation, the company is organised around customer journeys rather than (often siloed) functions. Customer feedback is made available to everyone in the organisation so that the customer literally has a seat at the table.

And finally, true customer-centricity is achieved when brands manage to engage their customers emotionally. Those French banking customers who felt appreciated showed 12 time higher preference for their brands. The times of simply delivering what is expected have long gone. In an age of experience, we need to do more than just meet needs – and that is real generational shift happening right now.

So, what do you think is responsible for the apparent decline in brand loyalty? Please share your thoughts.

3 comments

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  1. Erik Haroldson, June 17, 2019
    I also think 'loyalty' can be a misleading mindset as it can suggest monogamy. We know consumers have a repertoire, and buy from more than one brand.  I love Byron Sharp's summary in his book "How Brands Grow Part II" that rather than thinking of them as "your customers"...think of them as "other company's customers who sometimes buy from you."   In this case, you can't take anything for granted - and have to win customers constantly - and do things to make them want to buy from you as Susanne suggests - and being 'customer-centric' rather than loyalty centric.
  2. Nick Tucker, June 13, 2019

    The vastly reduced barriers to switching in many categories is probably also a big factor. The ease of being able to assess the quality of another brand via ecommerce ratings and reviews removes the risk of switching that used to keep people 'loyal'. They weren't really loyal, they just didn't know if the alternatives were any different or better. Now they do.

    The only place this doesn't apply is where there is no choice, like in your train example. 

    So I agree, rather than trying to hold on to the 'loyalty' that was driven by risk-aversion, brands need to actually deliver so strongly to customers that there is no interest in trying another brand. Customers who actually love being a customer of the brand.

  3. Jan Mulder, June 13, 2019
    Interesting approach. But if it is all about emotion, shouldn't the question be 'who' is responsible for the decline, rather than the impersonal 'what' is responsible for the decline?

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