Rethinking Customer Loyalty | Managing Customer Relationships

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Rethinking Customer Loyalty

Customer loyalty is a major concern for everyone in business today, perhaps because there
appears to be so little loyalty among so many customers. At best, loyalty is fleeting among
the majority of buyers, and at worst, it simply isn’t part of their thinking.

I am always amazed at how many books are written each year on the subject of customer
loyalty. These books are written and read, I think, because we don’t want to face the reality
of pervasive disloyalty in the business world. As suppliers, we convince ourselves that we do
a good job for our customers. We treat them fairly, our pricing is competitive and we like to
think that we remain loyal to them. So why aren’t they more loyal to us?

At the risk of sounding cynical, customer loyalty really is a simple concept, and it can be
boiled down to the following statement: Customers are loyal so long as the rewards of
loyalty outweigh the rewards of disloyalty. Approached from this understanding, the
challenge of gaining customer loyalty may not become easier, but surely comes into clearer
focus.

To make matters more challenging, providing good service to buyers today will not guarantee
continued loyalty. I was shocked to discover from one of our partners, who has studied
customer buying habits for over thirty years that 80% of buyers who switch vendors rate
the service of their previous vendors as “satisfactory to good.” Good service is no longer
good enough to guarantee customer loyalty!

It seems, then, that it may be time to re-evaluate our concept of customer loyalty. Today,
the “what-have-you-done-for-me-lately?” question may well define the loyalty position of
most buyers. It’s discouraging to think that what you did for customers yesterday is quickly
forgotten by those same buyers today.

No matter how excellent a company’s products or services are, a Lifetime Achievement
Award can be earned only once. Smart executives know that even with a Lifetime
Achievement Award they must do three things well if they hope to retain customers – innovate,
innovate, innovate. There doesn’t appear to be any alternative for capturing and holding the
attention of customers whose concept of loyalty today is fleeting at best, if it exists at all.

About the author: Steve Chriest is the founder of Selling Up™ (www.selling-up.com), a sales consulting
firm specializing in sales revenue improvement for organizations of all types and sizes in a variety of
industries. He is also the author of Selling The E-Suite, The Proven System For Reaching and
Selling Senior Executives and Profits and Cash – The Game of Business. You can reach Steve
at schriest@selling-up.com.