Is Customer Loyalty Dead?
A better question: do brands deserve customer loyalty?
Is customer loyalty dead?
In a word, no — although it certainly seems to be comatose most of the time.
Perhaps a more accurate answer would be: for the most part, yes.
Customer loyalty, of course, differs for brand to brand and organization to organization. As we noted in this Steven Howard Marketing Blog post, a read of the latest Brand Keys Loyalty Leaders list shows brands like Amazon, Apple and Facebook enjoying high levels of customer loyalty, while others such as BP, Borders and Bank of America wallow at the bottom of this loyalty list.
So yes, consumers do express some level of customer loyalty, though as highlighted in this week's Monday Morning Marketing Memo, the annual Accenture Global Consumer Survey shows that only 25% on consumers trust the companies with which they do business. Customers are not likely to be loyal to brands they cannot trust.
In fact, most organizations today do not deserve loyalty, based on their disdainful treatment of both customers and employees by senior management. This is a sad state of affairs, but very true.
As we noted in an earlier Keeping Good Customers Blog post, customers are looking to emotionally connect with brands that stand for something and delight them. And yet organizations continue to fail on the most basic levels of customer service, which is why 64% of consumers changed at least one of their service providers during the course of the past year due to poor customer service.
Only those organizations that treat customers as individuals with individual needs, wants, desires, likes and dislikes deserve true customer loyalty.
A customer rarely defines their relationship with an organization based solely on what they purchase. Yet purchases are tracked as the fundamental core of almost all CRM systems, based on the false thinking that this is how customer relationships should be managed.
You do not earn customer loyalty by selling the customer more products or additional services. Thus, it is a mistake to define customer relationships solely on what your customers are purchasing.
Such a mismatch is at the heart of why there is so little customer loyalty visible today.