In this age of CRM, companies often calculate how loyal a customer is to them but how often are you loyal to your customers?


Are you loyal to your customers?

Showing loyalty to a customer is a fairly simple thing to do… but hard to do at scale. Realistically showing loyalty to a customer only takes a moment (at a key point in time) and can create a lot of long lasting goodwill. I’m sure that we could all recall a good (or bad) experience where we were shown loyalty by a company. In my view, it engenders a lot of trust and reciprocal loyalty (or not).

Most importantly, I think it changes the dynamic of the relationship, as it moves from competing on price to competing on experience. For a digital business this is crucial as barriers to entry are normally quite low.

Competing on experience is much harder for a competitor to imitate.

Companies can, and do, spend a lot of time and effort calculating reward programs, reward tiers and points schemes in order to try and gamify our loyalty to their company. How much simpler could it be if we reversed the loyalty equation? Rather than having to prove your loyalty as a customer to a company first, a company might try to build loyalty with you? This is about a paradigm shift in the way companies think about loyalty.

In a digital business, companies that treasure their customer relationships and build trust will ultimately be the most successful. This often requires a rethink in the way we define our products & services. Things like contract lock-ins, points schemes & artificial barriers to entry, are all constructs of an old economy that are based on a customer being loyal to a company. For instance, why should a company offer it’s longest-standing, most loyal customers some of the worst-value plans it has, rather than proactively suggesting new plans (or automatically upgrading customers) that offer better value to the customer?

Loyalty at scale

The scale part here is important… this is about being loyal to your customers at scale. We all have stories about our local butcher who knows our preferences and shows his loyalty to our repeat custom by giving us a little bit extra each time. Or our local coffee shop where the barista knows our name and gives us a free coffee every so often.

However, I think that we can learn a lot from these examples in the way that we should create digital businesses that use similar concepts.

The technology systems that underpin loyalty can sometimes be quite impersonal and make demonstrating loyalty difficult, however they are very important to achieving scale. Elements that are important to creating a loyal experience are:

  • Knowing your customer
  • Personalising the experience
  • Demonstrating your loyalty
  • Treasuring your relationship with each customer

And then overlaying digital business concepts such as social communities & recommendations, micro-transactions, double-sided business models, crowdsourcing, open communities, long-tail, etc to create products & services that have loyalty at their core.

It will be different for each company as to how you should show your loyalty. But I think that true digital leaders will know intuitively how this should be done.

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