In marketing, we tend to throw around the word “loyalty” a lot. Often, we use it synonymously with “rewards;” the implication being that loyalty is the act of a customer buying from a brand more than once. But is repurchase and reward redemption really loyalty? Or the better question: is that really the sum total of loyalty?
I like to use Scoutmob, a local deals app. When I’m particularly indecisive about what to have for dinner, I enjoy browsing the app on my iPhone, and finding 50% off pork belly tacos and artisanal root beer. But I don’t often return to that same restaurant. Scoutmob hasn’t made me a loyal customer, it’s made me a deal-shopper. But the iPhone I use to peruse Scoutmob, gets upgraded every time a new model comes out. I sing its praises to anyone who will listen. And Apple has never sent me a check in the mail or given me a single point reward.
The path to loyalty doesn’t end with your rewards program. Sure, you’ve given them the right incentive to take the plunge and make the first purchase. And if you’re lucky, they keep responding to the incentives that you’ve created with rebates and rewards. But what happens when your competitor offers them a better incentive? Instead, think of loyalty as a continuum from like to love. It’s a journey a customer takes that progresses with every positive experience they have with your brand.
That continuum begins with the first purchase your customer makes. She has decided to give you a try. If she likes her experience, she might buy from you again. If you reward her for her purchase, then repurchase is even more likely. At this point, though, the relationship is still transactional. Price is likely still one of the most important decision criteria.
If she has opted in to communication with the brand, though, you have the opportunity to deepen the relationship. You can start engaging in targeted, relevant dialog. You can be helpful. You can provide top-notch service and support. You can create a consistent, overarching experience with the brand. At that point, your customer will prefer to buy from you, to the exclusion of others, even if you’re a little more expensive. Effectively, the relationship has become price inelastic.
But loyalty doesn’t stop there. Joseph Jaffe advocates that brands shift focus from acquisition tactics to retention tactics as a way to create a new channel for acquisition in his book, Flip the Funnel. Create a good enough experience, provide word-of-mouth opportunities, and your customer will become an advocate. The power of true loyalty isn’t additive, it’s exponential – where each customer in turn creates opportunities with new customers. That’s true love. At least in marketing.
What examples do you have of brands that have done a good job of leading customers all the way through the continuum of loyalty?