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One of our podcast listeners stumped me a bit with a recent question. Sonia Montella asked for a detailed explanation of customer loyalty and why we need it. I decided that such a good question deserved a good answer or, at least, the best possible answer I had. Since I figured some of you might have the same question, I also wanted to share that discussion in the newsletter.
I have a few things from a psychological perspective that make up loyalty. However, before we get into those, let’s contextualize this.
I always look at loyalty by thinking of who I am loyal to in my life. The answer is usually my family and friends.
I would also include my loyalty to my Luton Town Football Club sports team. People are very loyal to their sports clubs, and I am no different. It’s rare for people to change allegiances to sports franchises once they’re held, even if you move to another place that has a different sports team.
So, with that background, let’s get into the things that make up loyalty.
The Emotional Aspect of Loyalty
Loyalty is an emotional attachment. My emotional attachments are most intense to my friends and family and the Luton Town Football Club, even though they sometimes give me heartache. Especially Luton Town, which had fallen through five tiers of English Football in recent years, which is pretty terrible. My loyalty to the club is so strong that we even donated money to the club during COVID-19 when they couldn’t play and were in financial trouble.
(I am happy to note that Luton Town has returned to the Premiership, the highest level of play in English Football.)
Many people think that customers who buy over and over are loyal. However, repeated behavior does not always indicate loyalty. Doing something repeatedly does not mean you are faithful to it. Sure, loyal customers will always buy, but people who buy over and over are only sometimes loyal. They could be buying for other reasons with no emotional attachment.
Therefore, loyalty is a relational construct. In other words, it’s part of a relationship with a person, organization, or brand, and it is based on your emotions about it.
For example, we watched a show in England called The Traitors.
It’s unusual for Lorraine and me to watch a game show like this one, but we made an exception because the premise is compelling. It’s a reality competition show for $250,000 with 21 contestants and 2 or 3 of them are traitors. The object for the loyals is to locate the traitors; the traitors want to avoid being caught. The last person standing wins.
At the conclusion of this past season (the English version), it was clear that one of the last people standing felt betrayed. Moreover, the traitor also felt gutted about deceiving the other contestant but still won the game. Both were emotional reactions formed by their relationship on the show, which by all appearances was a loyal one—at least to one of the contestants.
The Sacrifice of Loyalty
One of the important parts of customer loyalty is sacrifice. If you give up the opportunity for other things, that is a level of sacrifice. However, the relationship is less likely to be truly loyal if you don’t have to give anything up or are not likely to give anything up for it. In a sense, the willingness to endure discomfort on behalf of something is the most important element of this concept.
For example, I have been a cable company customer for 20 years. However, I am not loyal to them. They are my only option. If I could go to a different provider, I would do it.
By contrast, I am a loyal customer of Apple. I pay more for my components to do so, too. I could buy from other, more economical providers than Apple, but I chose not to. It is a sacrifice I am willing to make because I believe in the consistent quality Apple produces.
This Apple relationship also indicates the importance of trustworthiness in the relationship. I trust that what they produce in the future will be high-quality because of their past performance. They earned my business by delivering top-quality products and services.
We Need Loyalty in Our Lives
Most of us have to be loyal to something. Why? Why would we be faithful to things that cause us to sacrifice and miss out on alternative opportunities? Deep down, we want loyalty to be part of defining ourselves. It helps us give structure or order to our own beliefs.
It’s a bit like tribalism. We like being a part of a tribe because we feel more protected. It ties into trust and the feeling that one belongs to a group.
Much loyalty exists within tribalism, and much of tribalism is enforced through loyalty. This concept holds even when there isn’t a tribe, per se.
For example, you might be loyal to a particular brand of toothpaste. Toothpaste doesn’t have a tribal following, nor is there a giant community of toothpaste lovers. However, you are still loyal to it, sans tribe. The fact that you choose this toothpaste that whitens/strengthens/freshens breath and is made by a particular brand makes you feel like you are part of that community.
That said, loyalty within a community, where everyone is loyal to one thing, often translates into being faithful to one another. Loyalty is an important driver of the community, and the community drives loyalty. We want that bonding.
The Power of Going the Extra Mile for Customers
So, I’ve had people come to the house to fix things. Sometimes, they will go the extra mile and inconvenience themselves to do the job. That engenders sacrifice on their part and, in my mind, signals loyalty to me and solving my problems.
Organizations can do this, too. At the beginning of COVID, I had previously booked travel to the Galapagos Islands through Trailfinders. It was an expensive trip that was now canceled because of a global pandemic.
Trailfinders responded brilliantly, giving our money back fairly quickly, which wasn’t always the case in these situations. Looking back, that situation must have been a nightmare for those travel agents operationally and financially. However, their sacrifice back then means we now book all of our holidays through Trailfinders.
As I mentioned, we need to feel loyalty and tend to be loyal to those who are loyal to us. That is most often how loyalty works.
So, What Should You Do with This?
I often say that loyalty is the most overused phrase in business. Most organizations think loyalty means the customer gives us all their business. However, that view can create a one-sided loyalty or misjudge customer behavior motivation. So, Sonia’s question is a great one because definitions can aid in building customer loyalty.
One way to think about loyalty is to consider the sacrifice involved. Without sacrifice, there isn’t any evidence of loyalty. So, what are customers sacrificing for you? Perhaps more importantly, what are you sacrificing for customers? True loyalty is two-way, meaning both sides are sacrificing something.
Another consideration is how emotional the attachment is. Recognizing the emotional connection between the organization and the customer is essential. Customers need to feel valued and cared for to trust you, and they will be loyal to you.
Plus, it is important to recognize that defining what loyalty is for your organization is critical. Sonia might consider buying the team lunch and discussing loyalty and what that means to them. Defining these customer concepts can lead to philosophical debates or alternate ideas. Regardless, the discussion will produce insights that lead the team in the right direction to improve customer loyalty in the organization.
Finally, the best strategy for engendering loyalty on the part of your customers is to be loyal to your customers. By that, I mean living up to your brand promises, doing what you said you were going to do when you said you were going to do it, sacrificing when you need to because it’s the right thing for the customer, and treating them the way you want to be treated. Doing these things is not the only way it happens, but it is the most likely way to foster customer loyalty successfully.
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