So, tired of hearing me complain about how Loyalty does not Exist? Fighting — er, discussing it over Twitter?
Now is your turn. This is how this is going to work. I want your input, all of you. All of the people who listened and chimed in the last few posts and days over Twitter and in this blog, all of you who did not speak up but want a voice.
This is the chance to help define it.
I will post my definition at the bottom of this post (after all, it is my blog – right?) and then will open it for comments. Come on in, tell me how you would improve or changed my definition. Let us all know how your definition is way better. Tell the world what’s in your mind. You can use any tools or references you want (if you want to quote another post, please past the text here so it is easier to read instead of going back and forth between sites), and any charts or models that work for you. Just provide your input.
Ground Rules- just one: respect. You can disagree with a definition, but you cannot attack its author. We are all in this to learn – right?
Loyalty is a commitment to a product, a brand, or a service based on a rational or emotional decision – molded by their needs and demands at that time – by the customer at the time of purchase.
49 Replies to “What is Loyalty? An Open Experiment to Define It”
Loyalty is a high (over 50%)probability the customer will seek and select the product or service over it’s competition, providing it is available, and a price premium is not excessive.
Your definition brings two questions to mind:
1. why is over 50% sufficient for a business to focus their efforts on? wouldn’t you want it to be higher than that to put your resources into it? (would love to have that conversation in more detail, btw, on what is the percentage that makes it worth investing into it)
2. what if there is a competing, similar product (or if the premium is excessive?)? would loyalty not count anymore?
It looks like your definition meshes well with my rational loyalty description (nothing better, then I go with this) — which I agree with — but am wondering why you chose to leave the emotional connection out of it.
Thanks for contributing
NOTE: this was taken from a post of my own I did over a year ago – the concept I think is still valid
Twenty five to thirty years ago, there was some real brand loyalty.This loyalty was, if not written in stone, then was at least a fairly consistent and desired end. Brand loyalty, whether it was for large products such as automobiles, and down to small ones such as toasters or stereos, the product was often purchased because it was made by a particular manufacturer. Brands were almost as sticky as our voting habits on election day.
We all should know that those days are gone, I am just as “guilty” of that as anyone else. I have owned cars manufactured by at least 7 companies, My home entertainment system is a mix and match of another half dozen brands, and I haven’t even a clue what brand the toaster is wearing.
We don’t have that luxury of sitting on brand identification any more. Some large organizations try to maintain some of this brand stickiness by improving the customer experience through enhanced customer communications management. Using previous history and recommendations we get those targeted mailings that try to spin products and keep our “mind share” of the brand.
Not all of us can do that – we must make better use of the information that we do have to drive revenue – particularly in the durable goods, IT and other channel based industries. While margins on many goods and services purchases are shrinking, more top line revenue is coming from servicing those purchases. Not to mention good service keeps your brand top of mind.
You should be capturing that sales information, you should be using it to market after-sales parts, service, accessories – whatever fits your product. Don’t leave those dollars to someone else. I guarantee that the “someone else” is out there looking.
Thanks for a very insightful reply. I agree with you more than you can imagine, since my statement is similar to yours – the complexity in today’s world, and the lack of response from brands in the loyalty game, has changed it to the point that loyalty not only does not exist anymore, it should not be sought by organizations.
Thanks for adding to the conversation.
Loyalty = a product/company’s repeated efforts to exceed my expectations and understand me as an individual to not only talk to me on my level, but also integrate their product/brand into my own personal lifestyle.
This is quite interesting definition in that it turns the table. We often define loyalty form the organization’s perspective since they are the ones who measure it and seek it. We don’t often see it from the other side. I think your definition is quite interesting (especially the part about exceeding expectations) and it can be applied to customer experience as well as loyalty.
Very interesting, need to think some more about including the expectations part within my definition, I like that a lot.
Loyalty is a very high level of commitment by a person or company, to products, services or customers, which cannot be explained by pure economic models.
I like the non-economic models approach. Very interesting. I think you are, so far, the only you to use the word commitment. Which is another interesting twist. To be fair, I like the non-economic models better though – it talks to measurement that is not necessarily tied to financial results. Which is the way I wished Loyalty was measured, not by financial means.
I think that the bottom line determination of loyalty comes down to how it translates to the consumer’s behavior. How about this: A loyal customer believes that you provide them with the greatest and most complete value possible, such that they will buy from you before buying from anyone else.
Chuck – I can’t see how this defines loyal. At most it defines a well informed (or poorly informed) customer. Loyalty should imply some sort of bond, emotional or rational, and I can’t see any of that in your definition.
The act of purchasing a product or service multiple times would require the consumer to have a conscious/subconscious and emotional/rational basis for their buying behavior.
My point is that the basis for loyalty is an individual thing and that the only consistent component to assess loyalty is their buying behavior.
Another interesting contribution — talking about value delivery as part of loyalty. I will need to think through this one, as another of my “experiments” here is to create a definition and framework for “”value”. how would you measure the customer’s expectations of value and the company delivering against that?
Unfortunately, this is not something I can even attempt to answer with any degree of value without taking more time than I have right now….not to mention it is personally putting me in uncharted waters.
In very general terms, I guess I would first take the time to clearly understand and prioritize what loyal consumers consciously and sub-conscientiously consider to be part of the value proposition of my product/service. I would then do the same thing with consumers of my leading competitors. Proactive assessment would be periodically done to continually assess the waters and refine things.
Yikes, that sound expensive and time consuming.
This very same exercise, defining value from both sides, is one that I am undertaking as a research project. I very well believe that value will replace loyalty and satisfaction as the metric to follow in the near future.
I was hoping you would do my work for me 🙂
More to come on the subject, in the near future.
Great topic! Let me throw this into the mix. As Paul Greenberg has stated about social CRM, I’m done trying to define loyalty. Your’s is as good a definition as any I’ve seen. Well done. What I haven’t seen is a magic bullet for building loyalty, nurturing it or monetizing it. And to your first line above, I’m not convinced it exists either on any measurable, quantifiable scale (don’t get me started on NPS).
So, that being said, its a never-ending continuous process to earn customers. Call it loyalty. Call it whatever you want. Trying to define what makes customers keep coming back implies that the magic formula exists. Does that make any sense?
(there is nothing more than i can say, your definition rocks!)
I like your definition. I would only like to bring a distinction b/w a loyal customer & a fanatic customer.
Loyal customer means repeat business.
Fanatic means repeat + referral business + advocacy + defense + co-creation (only if business reaches out to them).
So a loyal customer is only the first stage on the way to becoming a fanatic customer. But fanatic customers don’t provide critique!
I like that distinction, it is an interesting one. Question that comes to mind – let’s assume that emotional loyalty is on its way down or “dying” — how do you get rationally loyal customers to become fans? Can you leverage a rational attachment to a brand or product into advocacy and co-creation?
That I think is the question to answer… I am no saying that you are wrong, but I am saying that if you can figure that out then we have a winning system as we can bring along both emotionally attached as well as rationally committed people.
Great comments, Thanks
Can/should the “loyalty” question be reciprocal? Why is it that the customer needs to be the one to be loyal to the abstract fiction of the “brand?”
What if we turn the conversation a bit? What would it mean for a brand to be loyal to a customer?
See, now you are talking as the mental provocateur you are. This is the problem I propose exists today for the decline and uncertainty as to how to measure or use loyalty. I wrote a long description of how this is the case at John F Moore’s blog ( I will copy it here in the comments section later).
The problem with dying customer loyalty is that company’s loyalty is long gone, and that has trained the customer to not be loyal anymore. Somewhat like a co-dependent relationships where one partner cheats and the second partner feels justified to do the same. It is a self-destructive behavior, but one that ever-larger organizations that are motivated by greed and perpetually increasing shareholders’ returns are all too willing to implement. The customer went from being a valued asset to be another commodity. If you have 140 million customers, does one more really matter? or one less? It is this mentality that destroyed company loyalty and led to the decline and erosion of emotional loyalty.
Great question, and this is the one that I believe is that the heart of this discussion. Let me further that process by asking — do companies care about loyalty? if so, how do they show it? how do they implement that? even smaller business are forced into dropping loyalty as a way to efficiently compete in the market.
Great comment, thanks much for reading
Loyalty is ones inner belief that by “being loyal” (to a product, brand, person, company… etc) it will either a) satisfy their own personal morals/beliefs and/or b) get them something in return (e.g. a better deal, special treatment etc).
Loyalty is a gift. We (individuals or organizations) choose to reward others with “our” loyalty.
Loyalty exists in us all. Some choose to extend it more than others.
Very interesting. I am intrigued by the statement that being loyal will satisfy a person’s inner belief or moral. It makes loyalty even more personal (almost spiritual I’d say) that I thought. I am behind the getting something in return (if I fly this airline, I get status for next year, if I continue to shop here I continue to get discounts coupons in the mail) as it is the marker for rational loyalty. But am certainly intrigued by the addition of a “moral obligation” to be loyal.
I will definitely need to think how to include that in my ever expanding loyalty definition.
I definitely agree that if you decide to remain loyal to a brand or product it is a gift you extend to the organization, and there are level to your loyalty (which perhaps creates the issues of rational, emotional, and — now — spiritual loyalty).
Thanks for a very interesting comment
Esteban – what a provocative subject and interesting discussion. In my opinion loyalty, in a commercial context, is mostly fiction. People may be loyal to a cause or a belief or even to another person, but I can’t see people’s loyalty to a product, a company or the synthetic fiction that is a brand in a way that represents a commercially sustainable phenomena. Those who are seen as loyal customers (participate in forums, generate value, tattoo the logo onto their bodies) most frequently expect to get something in return, through a power user status, its fringe benefits and geek appeal, or the image of a badass and the different type of image associated with it. Those people remain with the vendors due to barriers to transition (will I get a power use status quickly if I switch platforms? Can I still take the fast lane through the security line if I switch airlines?, how much will tattoo removal cost?) but if another vendor offers high enough incentive combined with a lowered cost to change they will.
I really, really like what you are saying — even though some people will think this is harsh. This is the reality of business and reflects my own beliefs that since we were trained to be un-loyal (except in the case of an even — in our minds — exchange of something for our “loyalty”) the results is a rationalized model of loyalty easily manipulated.
My first reaction was to say that your definition was “harsh and cold”, but in second reading I can only agree with it. Guess what? as cold and harsh as it may be it is the definition that organizations will have to adapt, among other things, to in order to succeed in the next few decades.
Reality is not pretty, but you have to adopt it and adapt to it – right?
Loyalty: A commitment to an ideal, person, group, product, service, or brand based on previous experience(s) that delivered unique and superior value.
The more positive experiences, the deeper the loyalty.
I read your comments at John’s blog and here, and I am intrigued by the concept of loyalty having varying degrees as experiences develop. To me that represents rational loyalty (enough good experiences make me think it will happen again, I may even be willing to sacrifice a few extra dollars in exchange for the better experience) but it also has a limit. I think Mitch said that better when he said that there is a limit to how far my loyalty should go – in other words, loyalty will have a practical limit for each person.
I may be willing to pay $400/night in a better hotel, but not in certain situations where my internal exchange rate of loyalty for “something” will consider it not worth it. Thus, loyalty will shift over time and change to adapt. And, to me that still constitutes rational loyalty.
Great comment, like the approach.
I’ve been considering the difference between rational and emotional loyalty as you describe them.
While consistent value-added experiences building loyalty over time seems like a rational progression and logical in terms of a decision making process, there is some irony here.
I believe that true loyalty starts with rational analysis, but becomes emotional over time, and ultimately leads to irrational decisions. This touches on Mitch’s point and definition.
If I have received enough positive experiences to develop some level of loyalty, my ability to make a purely rational decision for my next purchase is ultimately skewed. I am influenced by my own loyalty to a brand, product, service, etc.
To your collective points, there is a limit to this (and as I said in my post on John’s blog there is an erosion over time), but why else would someone buy a cup of coffee at Starbucks for $3.50 when a comparable cup at Dunkin’ Donuts cost $1.25. From a rational perspective, it doesn’t make any sense. Simply put, I have developed an attachment to a brand or product (there is also the aspect of habit involved).
Using Starbuck’s as an example, we have been able to witness that there is a limit to that loyalty. People were willing to pay more when their economic condition was able to tolerate the preference. The economy has shown us that loyalty only goes so far, and does shift and adapt as your comment says, for not only economic reasons, but likely a variety of additional inputs and factors.
Perhaps this shifting and adapting occurs across a continuum with rational and emotional on opposing sides. A company’s goal is to move the customer as far to the emotional side as possible, and keep them there, but this must be earned, and consistently validated.
I like your Starbucks example a lot, since it is one of those things that baffle me forever. I replied to Sid’s comment below with an example from a presentation I saw the last couple of days, and of course i don’t have saved anywhere, that talked about symbols of status, societal trends and patterns, and habits being recognized as loyalty by organizations and how wrong that was.
I think Starbucks falls into that category. The economic downturn hurt Starbucks severely mainly because their “loyal” customers did not see the value being returned for their hard-earned money. Their loyalty was not rational (as you say, you cannot explain it) but was derived from either habits or status symbols (their cup and log is one of the most recognized in the world!). Despite all the good and flavorful experiences they could have offered, their price point was just a tad higher than people expected to pay for similar items elsewhere, and it showed in their decreased revenues.
I am not saying that there are no Starbucks loyalists, all brands have them, but my statement from the beginning (if you read yesterday’s entry on loyalty that can be bought) is that organizations should focus one emotional loyalty as the only one they can control and that they can implement.
I agree with you that loyalty has a whole slew of reasons to be or cease to be, and that is why I so resent NPS and other attempts to measure it and control it.
Thanks for a great, thought-inducing comment (btw, I am getting a headache just participating in this).
I think the definition of consumer loyalty can be defined relatively simply but first it’s important to say what it isn’t.
Loyalty isn’t anything to do with what a customer says about how they feel about a brand; as always ‘talk is cheap’, ‘actions speak louder than words’, and ‘no one ever got anywhere sitting round talking in cliches’ (Alf said the last one).
Strong loyalty is when a customer buys your product without considering any other.
Moderate loyalty is when a customer considers one or more other products but buys yours for a successive purchase anyway.
Building loyalty is largely an issue of ensuring the psychological comfort of going with the known consistently overcomes the unconsciously perceived risk of going with anyone else. For example, I might love flying with Virgin Airlines because they treat me well and have never let me down. However, there will come a point where, if BA reduces their price sufficiently, I will regard the risk of using them as acceptable.
Thanks for a great comment, particularly the part about strong and moderate loyalty. I am getting the sense from reading all these wonderful responses that loyalty comes in different levels (I am not convinced 100%, but I am moving in that direction), meaning that it is not binary — which was my thought.
However, the question that arises from reading your response — if BA lowers the price sufficiently, will it still make a difference in a strong loyalty situation as you describe?
What do you think? I don’t have the answer to that, but would love to hear your thoughts…
I go back to the definition of loyalty “the state or quality of being loyal; faithfulness to commitments or obligations.” Synonyms are devotion, commitment, faithfulness, etc…all emotional characteristics.
We have a tendency, in business, to use this word very freely and losely. I am “loyal” to my grocery store, but feel no emotional attachment to it – convenience and fairly decent assortment are my rational motives. I am also “loyal” to CVS (again out of convenience), but I HATE their practice of asking “Do you have a CVS card?” at the checkout. I do think that some businesses have true emotional attachements with customers – the ones we feel passionate about, but I’ll risk saying that no human being has more than a handful that they really care about – passionately, and this comprises a small percentage of the businesses they interact with.
I do agree with the statement that loyalty (in the true sense of the word) is a gift which cannot be bought, and must be earned (whehter it’s devotion to a product – Harley Davidson or Apple – or the experience (combination of product, service, environment, etc) – Disney or Starbucks.
However, if we stick to a purely emotion based definition of “loyalty”, it would leave 99% of businesses hopelessly chasing something unachievable. So, defining loyalty in such a way that the 99% of us can hold onto some hope, I think your definition captures it well – living at a singular point in time and space. I think this expresses the true nature of loyalty for those non-rock star businesses, raising the importance of each individual interaction, and the possibility that each interacation can potentially impact the loyalty decision to be made next time.
the part that i like the best on your reply is when you say that since the definition of loyalty is an emotional state, it would leave business without a possibility to create a loyal following (paraphrasing). I agree that this is the case, as an emotionally-driven relationship requires two willing parties — you want loyal customers? you need to be loyal to them. Also like the example of the CVS card — why do business make you identify yourself as loyal by using a card? that makes me thing that it is all about buying my loyalty (if you give me your information to track, I will give you a discount on diapers) and not about earning it. I have several cards I use – mostly for the discounts I get. Am I loyal to any of those brands? No, absolutely not.
As the world turns, loyalty shifts constantly based on rationalization. That is, after reading these 30+ comments, still my position.
Thanks a lot for commenting.
Instead of linking to what I said in John’s blog (and to preseve my archives), here was my comment there:
Does loyalty exist today? yes, but not emotional loyalty – just rational. And rational logic can be bought, manipulated, and altered.
Sure, there are few exceptions – habitual customers (harley davidson, car brand preference – i.e. chevrolet vs dodge vs ford – and a few others. Dr. Joseph Michelli (author of The Starbucks Way and other similar books) calls them Beloved Brands.
Those customers cannot be be manipulated – for the most part – but they have a problem: emotionally attached loyalties like Beloved Brands get from their customers are not scalable, they depend on a certain type of person with a certain personality. Those people are in decline in this world – Generation X is far less loyal than baby boomers, and there is almost no concept of loyalty in Generation Y. Thus, those brands are enjoying slow deaths as we approach a time when loyalty to a brand does no longer exist. It won’t be today, or tomorrow – or even next year, but it is part of the generational shift that is happening in our lifetimes.
Now, you may ask why this shift is happening. Good question – two things come into play here: first, there is no loyalty from the brand to the consumer. Airlines think your loyalty is only good for a year. Car manufacturers will change specifications to save money without asking their customers. Greed has forced bank to foreclose on lifetime customers without even thinking about it. Long-term, established relationships with brands are no longer a factor in this world, as brands get larger and larger, go global, and face a complex array of situations for which they cannot respond in mass. Thus, they chose the lowest common denominator – greed in most cases – where they exchange long term loyalty for money. In the process, without realizing it, they are training the consumers to drop the concept of loyalty as well. The end of loyalty for brands is a self-fulfilled prophecy.
Second, and I touched on this briefly above, there is a generational shift happening. Aaron Stroud and John Caas wrote in this post (http://bit.ly/2kBiAA) something that has been in the my brain for some times. There are 78 Million baby boomers, 62 Million Gen X, and 96 Million Gen Y people. And guess what – Generation Y has not loyalty, they don’t know loyalty, they don’t expect loyalty and they don’t care for it. They make rational decisions based on recommendations form their networks (thus the Social Media r-evolution we are living) and they drop a brand in exchange for another as soon as it is feasible if the feature / function / price / offer / coolness factor is better with the new one. This is the world we are moving into, and it is OK. It will generate better value for both consumers and companies as we see the control and power shift away from the company to the communities.
Loyalty is dead today? no, certainly not. We are moving towards that, and emotional loyalty cannot be trusted anymore as we move into a more global, more complex world with more brands competing for the same dollars. When all products become commodities, emotional loyalty becomes important. In this complex world of brands we live in, commodities don’t survive long – and emotional loyalty takes over.
Esteban, First of all thanks for starting an amazing discussion, I remember we shared a few tweets to express our opinion on Loyalty, and happy to see you bring up the Harley Davidson example above that we discussed.
On a lighter note – I Googled ‘Define: Loyalty’ and it said “‘Loyalty’ is episode 15 of season 3 in the television show Angel’ 🙂 – so for sure its definition has n number of shades, and your blog has brought up many serious and sincere perspectives to that.
I do agree that ‘Emotional Loyalty’ is on its way down – but to varying degrees, and depends on the demographics. Worldwide there do is a behavioral pattern change, and as generations become more rational than emotional, so would their Loyalty as customers.
But I’m afraid I don’t completely agree to your comment above on Gen Y not having or knowing what is ‘Loyalty’. If you take the example of iPod, and its brand extensions iPod-Touch, iPhone etc. aren’t those cases of brand ‘Loyalty’ – and all this is happening now in the Gen Y times. When kids buy its merchandise, put its logo as their ‘avatar’ pic, don’t let go of the gadget for a moment – its all in a very ’emotional’ and a ‘Loyal’ manner.
Now, will they stay with it all along – most likely not, but as long as they are with it – its very much a case of ’emotional loyalty’, is what I feel.
I think you’ve tried to indicate above, but I’ll present it in a slightly different manner – What we see as a downward trend in ‘Emotional Loyalty’ of customers, I feel is not because people do not know what being emotionally loyal is, BUT due to a shift in their emotional loyalty pattern. And the pattern shift is because – the time frame for which customers remained ’emotionally loyal’ to a brand is getting reduced over the years . So, if a Harley Davidson customer stayed with it for a lifetime, a Gen Y customer might stay with a brand he is ’emotionally loyal’ to – for 5-10 years (e.g.). And for the same reason, I’m not sure if it will ever be dead (?).
Not compressing my thoughts into a concise definition, I think at times its better to let thoughts remain decompressed, more so those for an ’emotion’ related topic.
Thanks a lot for providing a terrific experience of participating in such an experiment !
Thanks for a great comment. I spent about 20 minutes searching for a slideshare presentation i saw yesterday that explained the iphone / cell phone use by teens perfectly, and that rebutted that notion that iPods are an emotional loyalty item. Of course, I cannot find it (wish I was better at bookmarking, but my reading habits trump my organization habits by far). Let me see if I can explain it somewhat.
Cell Phones and iPods are to today what Cigarettes were to the 60s-90s. You see, when teens starting to adopt cell phones, the use of cigarettes by that age group finally began to decrease (sure, we can also mention the lawsuits against tobacco companies and better education as reasons – but since when do teenagers use reason to make decisions?). What sociologists began to see was a replacement factor. Cell phones were replacing cigarettes as the item to have and to show. It was the cool factor of having a cell phone that made it an easy adoption target – not the item itself. It is not an issue of emotional loyalty to the iphone, it is an issue of identity and societal fit. As soon as the next thing comes up – whatever it is – the ipod will be replaced then, without hesitation by the same crowd that touts it today as “cool”.
This, of course, does not apply to Macs – which do entice emotional attachment (how else could a machine with less hardware power, less software available, and worse technical support would make it – and I have two of them).
I really like the idea of shortening spans of emotional loyalty. Will have to consider that deeper. I am not sure if that is the case, but has more legs to run than a blind attachment to a declining factor (emotional loyalty).
thanks for a very good discussion.
Very interesting psychological aspect to teens behavior Esteban, thanks for sharing. Would love to see that slideshare presentation. But this made me curious about another point that it brings forth:
If the 60s-90s generation was also adopting similar behavioral pattern for loyalty in their teens (merely going after what is ‘cool’), but went on to appreciate loyalty in their mature years – then won’t in all probability Gen Y follow the same pattern as well ? Currently their love for iPod might be just a ‘follow-the-cool’ fad, but would there be a behavioral shift and move towards understanding and appreciating ‘Emotional Loyalty’ as they move out of their teen psyche ?
Which again makes me think that possibly ’emotional loyalty’ will never be dead but will be spread over shortened time span in a customer’s lifetime.
Another very interesting question – and something that I honestly cannot answer. I can only surmise that something may happen – but what and the shape it will take is impossible to know.
However, I don’t think that Loyalty is dead. This exercise made me reconsider the extreme nature of that statement (and I will blog this tomorrow with other lessons learned). I do believe that we are replacing emotional attachment and loyalty, which used to exist until about 10-15 years ago, with emotional loyalty. And the emotional loyalty CAN have different levels, can be measured, and can be manipulated.
This was a very interesting experiment…
I feel a brand loyal customers accepts no substitutes, go out of way to purchase a brand, and will pay more for that brand. Loyalists want to see the brand succeed and therefore contribute to its success.
This is unlike a repeat purchaser who buys out of habit. Repeat buyers have a very weak brand loyalty at best and I would argue they should not even be considered loyal. Habitual buyers have very narrow and weak connection to the brand. They buy based on price, convenience, and routine. They are not truly committed to the brand.
True brand loyal customers can range in degree and focus of their loyalty.
Loyal fanatics believes in, sings praises of, and defends the brand no matter what the brand does.
Brand advocates also believe in the brand and evangelizing regularly on behalf of the brand but unlike the fanatic they will critique the brands missteps in order to make the brand better
True brand loyal customers range in degree and focus of their loyalty.
Loyal fanatics believes in, sings praises of, and defends the brand no matter what they do.
While, brand advocates believe in the brand, spread the brand message by evangelizing regularly on behalf of the brand, but unlike the fanatic they will critique the brands missteps in order to make the brand better.
Great comment. I think I agree with you when you say that brand loyaltists accept no substitutions. That is what I called beloved brands in my comment above – and not only acknowledged their existence but concur on the profitability that comes from having those customers. alas, to develop that cult-like following there is not much that a company can do – and they are not scalable (I talked more about that in my previous comment), so it becomes a roll of the dice whether your product generates that adoration or not. And it would be unfathomable to recommend any organization to go down that path and try to create it as they are more likely to die trying than succeed.
Thus, my urge to focus on emotional loyalty.
I like the idea of fanatics and advocates. Someone else, Prem Kumar, mentioned it in their comments and I think that we were to focus our efforts there – as opposed to trying to buy loyalty from customers, we will be extremely more successful. One of the vendors I deal with, Lithium Technologies, has made an issue of converting users into fans (superusers in their communities) and has done quite well at understanding that and embracing that fact.
I had this conversation with my brother (he is a brand consultant, worked with some of the largest brands in the world) about advocacy late last year and we both concluded that it was an up-and-coming issue. I may have to revisit this sooner than I expected and do some research to affirm my beliefs on it.
Thanks for a very thought-provoking comment.
loyalty is repeat business from SAME customer continually AND influencing purchasing power within his/her sphere of influence.
dont really agree with Dave that repeat business is not loyalty. Loyalty HAS to translate into repeat business. a one off customer is nothing.
Thanks for participating. I think you hit on an issue in this discussion that we have not discussed much, but it is valuable to bring up.
What is the use of loyalty? you say it has to be repeat business. I would tend to agree with that, it should translate into repeat business (And that is why NPS attempts to correlate promoters with repeat business, or walletshare, or increased revenue-per-account, or similar).
But is all repeat business to be considered loyalty? That is the question that I would love to explore more. My original statement is that not, all repeat business is not loyalty — there must be other variables to consider it loyal business.
What do you think? (or anyone else for that matter)
I agree with you that if loyal customers don’t buy again or at least generate new customers (referral)then what is the use, but just because someone continues to buy it does not mean they are loyal.
We had a heated discussion about Habitual Purchasing vs. Brand Loyalty a few weeks ago on #brandchat on twitter you can check the recap out at http://yourbrandchat.wordpress.com/2009/08/14/aug-12th-brandchat-recap/
Many companies are under the perception that because their brand is selling well and they have repeat customers they have a strong brand but this is often not true.
My postition is that Brand strength comes when people stick their neck out and recommend your product/service to others. (NPS)
If the companies hope to have a truly strong brand, they must move their core customers to a point where they advocate for the brand (evangelizing regularly and making suggestions for brand improvement.
I would also like to reiterate the point that if the company is not loyal to their customers and does not advocate for their customers then why should their customers be loyal advocates for them.
That need for loyalty by the company goes the same for employees who are the people who deliver the brand. Yet most companies have very little loyalty for their employees and then wonder why they can’t get their brand delivered properly.
Most companies talk a good game when it comes to loyalty but few actually care about it. All they really want is people to keep buying their products. This is why the companies who do get value loyalty and advocacy have such dominate brands.
I think you’ve done a great job in getting everyone thinking about this topic. Just recently, I had an interesting conversation with an old friend who is not in technology [imagine that?]. After trying to decode the term loyalty, we eventually arrived at a core concept, that of faith. This wasn’t a religious discussion, but I think the notion of faith reflects many of the tenets that we measure for when we talk about loyalty.
I think Scott Rogers above points to a similar understanding of loyalty.
I looked up a couple of definitions for Loyalty before embarking on this fool’s quest, just to be on the safe side, and I believe that faith is intrinsically related to it. Most definitions you will find talk about a “faithful commitment” or a “faith in the outcome” of an interaction.
I think that it is quite interesting to use that word in the realm of loyalty. I have said, and maintained, for a very long time that feelings, emotions, sentiments, etc. cannot be accurately measured. and that was before i even had to start talking about faith!
Thanks for a great comment, I appreciate it.
Dave did read the other post. I am not convinced there is a difference between habitual purchasing and loyalty.
i buy at a local superstore because its the closest to me. there is a bigger, better superstore in my vicinity and yet i seldom go there since its further. i even like that other superstore better than the one i shop at. but what use is that particular superstore’s brand if it cannot make me invest the extra effort in changing my habitual purchasing tendencies?
re this comment of yours, “Many companies are under the perception that because their brand is selling well and they have repeat customers they have a strong brand but this is often not true.”
what is the point of a strong brand if it does not translate into sales?
What I meant is just because you have sales doesn’t mean you have a strong brand.
Strong brands always translate into strong sales but strong sales doesn’t always mean you have a strong brand.
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