Loyalty: A Two-Way Street
““Loyalty is a two-way street. If I’m asking for it from you, you’re getting it from me.””
Loyalty is an interesting concept.
From a young age, we are taught that loyalty is a virtue, something to aspire to, something that has meaning and value. It is cited as one of the core principles, part of the bedrock and foundation of a successful relationship. It describes commitment, attachment, and devotion; be it to a person, an institution, a religion, a cause.
As a word, loyalty first appeared in 1400 when it referred to ‘faithful-ness to one’s own word or promise’ and over the next two centuries, it came to characterise general devotion and dependability. It signified a shared value set, a commitment to the same ideals and principles. In its truest sense, loyalty is an emotional contract, evidenced in no small part by a willingness to stand together in the face of adversity.
A loyal relationship can be recognised as one where the relationship is supportive, respectful, trustworthy, and sincere, and integrity is unquestioned.
True loyalty, in its purest sense, goes beyond rationality and a matter-of-factness. It is based on sincerity. Just as in relationships be-tween two people, true loyalty cannot be bought, it is earned based on merit, intimacy and knowledge, sustained through consistent mutual regard.
There are many reasons why people are loyal to something, whether a cause, another person, a product or a brand:
1. Physical needs 2. Social Inclusivity needs 3. Psychological Emotional needs
But loyalty today means very different things to different people. There are those for whom loyalty is still true to its roots, embodying fidelity, unwavering support, protection and kinship, something that has been earned over time and of extreme intrinsic value.
Yet for others, loyalty is seen as an intrinsic right, something that is demanded and expected of those around them, not to be questioned.
Just recall the recent dynamics in US political history and Trump’s demands of unwavering loyalty from those around them, irrespective of any lack of merit or attempt to earn it.
However, most concerning perhaps is that in more and more cases, particularly within the realm of consumerism and the brands that seek consumer loyalty, loyalty is seen as a form of currency, something to trade on and receive value from. In fact, John Billings summed up the modern-day approach to true loyalty in one pithy statement: “if you want loyalty, get a dog”.
Historically, brands would find it easy to create a loyal following. The silent generation (1925-1945), brought up in an era of compliance and obedience, would find it incredibly easy to establish a loyal relationship with a product or service provider who met their immediate needs.
‘Good enough’ was in fact good enough to ensure continued patronage, few choose to explore options outside of the tried and tested, the familiar.
They didn’t need to understand their customers in any depth beyond providing a product or service that met a known need.
And in a consumer marketplace where products were limited, choices were fewer, there was less competition for share of wallet, the impetus for brands to win the heart and mind of the consumer was almost non-existent.
But as time wore on, and the context in which consumer’s lives were lived changed at a rapid pace, this almost blind loyalty dwindled at an equally rapid pace.
Unfortunately, many brands were slow to recognise this change and were working under the false impression that customers wanted to have relationships with brands, an increase in interactions was always the answer and loyalty came from regularly engaging with a brand.
They missed the crucial point that brand loyalty is rooted in emotion, fuelled by the customer experience. It is driven by quality of service and trust and a sense of true value, whether real or perceived. If a consumer enjoys the interaction with the brand, they will want to continue to engage.
And if a consumer is willing to spend time engaging with a brand, then they are taking the first baby steps to becoming loyal.
And when they see a sense of shared values, of a positive connection, they start to form a bond. They experience the feeling that the brand ‘gets’ them, that they are in tune with the brand, that they share fundamental beliefs and values that gives psychological and emotional reward as well as functional and physical benefits.
For real brand loyalty is related to the same qualities that define and are the product of strong rewarding personal relationships. A sense of shared value, belonging, genuine dialogue, respect and understanding. Consistently making consumers feel valued, respected and understood.
Given the commercial benefits of loyal consumers - they spend more, and more often with brands they like (loyal customers tend to spend 67% more than new customers), they become brand advocates to those around them, growing the potential customer base of that brand and increasing revenue exponentially - it’s hard to imagine why brands were so behind the curve in understanding what forms and sustains brand loyalty.
Being able to address a consumer’s pain point and seeking to solve it, providing convenience and little mental effort on the part of the consumer goes a long way towards building natural loyalty. It starts to answer the consumer question of “what’s in it for me?” and makes the brand more valuable to them.
When coupled with a consistent, easy, effortless experience, the consumer rapidly gains confidence in the brand, and it is this confidence and trust, that form the foundations of true loyalty.
It’s one of the reasons behind Amazon Prime's success. The annual fee originally just covered free shipping, but over time has developed to incorporate other benefits such as live streaming of TV shows and movies, storage for digital photographs and more.
Prime is truly integrated into the customer’s life and appears to add continual value long after the memory of the one-off annual payment has receded. This works for Amazon from a revenue perspective, as this membership drives the customer to purchase more from Amazon to get the ‘full value’ from their membership.
Starbucks is another brand that has tapped into the needs of its customer base.
Recognising time is of the essence for many of their customers, their lifestyle app enables the placement and payment of an order, providing the ultimate convenience of dodging the time in queue.
The My Starbucks Rewards program also enables the customer to redeem the rewards in real time, easily and effectively. Unfortunately, these examples and a few others, are in the minority in terms of their philosophy and approach.
Because despite companies employing a multitude of brand & customer experience strategies to try and buy or win consumer loyalty, most brands still focus primarily on the needs of their business rather than the needs of the customers they serve.
Many brands only pay lip service to customer-centricity, they continue to pour money into advertising to customers rather than attempting to truly understand them. And without this true understanding, any hope to create a sense of shared identity is diminished.
Never can this be seen more than the way in which many brands create and run their ‘loyalty’ programs. Driven by a need to ensure they maximise the potential revenue of each individual consumer, the strategies employed are not based on equal reward or reciprocity, they are often weighted in favour of the brand leaving the consumer out in the cold.
Stories abound in the media of loyalty programs that do anything but put the consumer first.
These include reducing the value of loyalty points as well as making them nigh on impossible to. Rather than engender loyalty and brand connection, all they do is leave the consumer feeling frustrated and disenfranchised, and if anything, create a negative relationship with the brand.
For many brands, rather than trying to address a pain point, or making the brand experience effortless for the consumer, their starting point seems to have been “how can we make more money from this consumer” rather than “how can we make this consumer feel valued, respected and able to share in our brand philosophy”.
This has been compounded by the very nature of loyalty programs being transactional rather than emotional in nature.
But the tide is turning and fast. Consumers have wised up and are now demanding that brands treat them differently if they want to secure their loyalty. They want authenticity, a genuine emotional connection and they want it to be a 2-way street, reciprocal.
It is now as much about a brand showing customers they value their business and recognise that they have plenty of other options, as it is about consumers showing a brand they value it above all others.
For example, Netflix, pioneers of the online streaming video businesses, has managed to get 80% of customers to be brand loyal.
In a research study by Second Measure, it was revealed that subscribers of other online streaming companies, also had a Netflix subscription, but 80% of Netflix customers only pay for Netflix.
Without a doubt, as one of the creators of the industry, they had pole position in terms of establishing the brand and a relationship with customers, but by giving their customers what they want, being current with their finger on the pulse of customer desires and needs and providing it, they’ve made seeking other options redundant.
Their original content developed with continued investment in quality productions like House of Cards and Orange is the New Black amongst others, provides something customers can’t get elsewhere.
They know their consumers, what they want, and are 100% focused on providing it. And the benefits for Netflix are significant, large market share and a ‘tribe’ of loyal customers meant that few left the brand introduced price increases.
In fact, after the news broke that Netflix was introducing price increases, the shares of Netflix shot up by over 4%.
In an interesting development, Agency C-Space created the CQ (Customer Quotient) specifically to look at ways of determining and measuring true customer loyalty. They identified and described the five key qualities of a brand that customers value and which drive loyalty to that brand: empathy, openness, relevance, experience and emotion.
These are the qualities that draw customers to brands like Dove, Ben & Jerry’s, Disney, Netflix and Virgin Atlantic (some of the highest performers on their CQ index).
Brands that embody these qualities appreciate that customers have choice and they seek to earn loyalty rather than demand or buy it. These brands understand that true loyalty is a 2-way street. Brands have to show they understand consumers through the products they offer and the customer experiences they create.
Empathy, intuition, emotional benefits, shared values, all the attributes of strong and long-lasting interpersonal relationships are the same qualities that ultimately drive meaningful and lasting brand loyalty.