— by Mark Blackham, Director of BlacklandPR
Absolute customer loyalty is a pipedream for at least two-thirds of companies. Up to 90 percent of their customers also buy product from competitors. It’s a fact of business life, and can still be handsomely profitable.
Marketing efforts like coupons, competitions and loyalty programmes aim to disrupt consumer polygamy by encouraging habit through tangible rewards. Research shows that many of these have ambivalent or temporary results. That’s because they underline the part of the customer relationship with you that is transactional. It can be easily replicated by competitors.
Emotions play a big role in the degree of loyalty. We prefer to deal with those organisations and products who satisfy the social and personality needs of our egos.
Emotional loyalty is more resilient than transactional loyalty. We are prepared to put up with higher costs for people and values with which we feel affinity, similarity, and familiarity.
Emotional loyalty is virtually the only factor you have in tough times like product recalls and adverse customer experiences. Customers can overlook the setback if they trust you to fix the problem, if they feel good about you, and if sticking with you says something virtuous about themselves.
Contaminated food at US fast food chain Jack in the Box infamously killed customers in 1993. The transactional focus of their customer-relationship meant it took at least two years for sales to recover. In contrast, a contamination event across multiple Chipotle restaurants last year cut sales for only about nine months. The earnestness of its corporate style seems to have given customers trust to return to the restaurants.
This sort of emotional loyalty comes only through investment in your relationship with the public; through customer service, and expressing your values and style in everyday decision-making.
There’s an argument for treating public relations as a loyalty scheme. You spend money on reward points given out with every positive service experience, every good media story, every thumbs up in social media, and every moment of integration into ordinary social life. The more PR points each customer has, the more likely they are to choose you in their polygamous relationships.