What Is Customer Loyalty About?

loyaltyApparently the 12th Annual Accenture Customer Loyalty Survey found consumers/customers are less loyal today despite billions of dollars spent on loyalty by companies. How does that happen?

Maybe because, as is often the case, most companies are spending on the wrong things, like loyalty programs. Loyalty programs don’t, and never have, created loyal customers; unless you consider ‘bribed loyalty’ to be loyalty. Companies spend a fortune on these and similar programs that do not move the loyalty needle because that is easier than doing what matters.

What matters?

#1 on the list for consumers/customers: product experience. Well how tough is that to fix in most companies? And can marketing actually fix it, assuming they even wanted to try? Probably not because most companies define marketing only as the back-end of marketing (promotions, advertising, digital, social etc) and not the comprehensive role of marketing, which is to align the capabilities of your company with the current and future needs of your customers, which clearly includes customer experience.

What other evidence do we see that this is true? The creation of a Chief Customer Experience Officer that does not report to the CMO.

If you want to create loyal customers create products and services and a ‘doing business’ experience that is uniquely valuable. Buying loyalty doesn’t work. If you’d like to see a tangible difference, look at the loyalty mainstream US supermarkets have (or don’t have) and how much they spend on their loyalty programs. Then look at the loyalty Trader Joe’s has with its customers and how much it spends on its loyalty program. (I’ll save you the trouble, it’s $0 because they don’t have a ‘loyalty program.’ They have the Trader Joe’s experience.)

Mitch

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