The Loyalty Paradox

 

Trawling through some client research I am struck by how consistent customers are in their definition of loyalty.

It would seem for the majority of customers it is about longevity of relationship.

However, for most brands loyalty (and hence rewards) is about intensity of relationship, or in other words - spend levels. The more you spend the more cash you get back or the more points you accrue.

I accept that many marketing practitioners would wish to split the assumption that a competent reward scheme equals a loyal customer base, wishing to focus instead on creating magic moments with the brand and driving up the holy grail of loyalty metrics - net promoter score (NPS).

(The uncomfortable truth for many service brands is that their NPS scores are mostly negative, put simply they have more customers who would not recommend them than customers who would).

But nonetheless this sets up a classic loyalty paradox between customers and brands.

There are some excellent reward schemes out there undoubtedly helping with customer retention (a very different thing to loyalty) and I accept / even extol the CRM 101 pragmatism of focusing your resources on your most valuable customers.

I have blogged previously about the holy trinity of loyalty; structural, emotional and rational. There must be a way to resolve this paradox using this important and consistent customer insight on the definition of loyalty.

As practitioners we surely now have the data & CRM capability to build longevity, as another dimension to value, into both our reward schemes and our customer service policies.

Comments

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