 |
|||
|
|
True Loyalty Comment on this newsletter at yastrow.com What does it mean to create customer loyalty? Does it mean that you bribe your customers to make repeat purchases with ever-more-creative promotions and ever-more-lucrative offers? Does it mean that you steal market share from your competitors with a rewards program that is richer than theirs? Or, does creating customer loyalty refer to something greater? Something loftier? Something more meaningful? Think about the kind of loyalty you have with your best friends. It is a signal of a bond generated by your relationship. It is two-way. It is lasting. Too often these are not the characteristics of a company’s customer loyalty program. Transactional Loyalty Most customer loyalty programs are not about building relationships; if you take a close look, you’ll see that their main focus is to steer transactions away from the competition. Yes, these kinds of promotional programs can be effective at generating sales. But what kind of loyalty do they create? Do they create loyalty to your business? Or, do they just create loyalty to your next promotion? This kind of loyalty is what I call transactional loyalty. It builds loyalty to offers but not to your company. It is vulnerable to a better offer from the competition. It is a game of commerce between you and your customer, not a deal to stick together for the long-term. Its energy is more like caffeine than it is like true, lasting energy. True Loyalty Contrast transactional loyalty with True Loyalty. True Loyalty goes beyond promotional offers; it is about your relationship with the customer. True Loyalty happens when your customer comes to believe in you. A customer who thinks, “I believe in what you do; I believe that what you do is important to me, and I believe I can’t get it anywhere else.” is a customer who will be loyal to you. This loyalty goes beyond your latest promotional offer; the loyal customer’s frame of reference is not your latest promotion but the entire history of her relationship with you. You are worth more to the loyal customer, and the loyal customer is worth more to you. What is your frame of reference? Here’s a litmus test: What frame of reference guides your company’s efforts to create customer loyalty? Is it the paradigm of advertising, which says that the way to persuade customers to buy from you is by creating a more powerful message and to interrupt the “target market” with that message as frequently as possible? This frame of reference usually leads to transactional loyalty efforts. Or, does your loyalty program look for guidance to the dynamics of human relationship, which can lead to True Loyalty? Most customer loyalty efforts are descendants of advertising-driven marketing. They are based on the ideas of breakthrough creative, frequent interruptions, and casting a wide net over a target market. Here is my challenge to you: Instead of basing your customer loyalty efforts on the paradigm of advertising, let the paradigm of human relationship guide you. No, I am not suggesting that you become best friends with your customers. But I am suggesting that you let the rules of relationship guide you, as opposed to the rules of advertising. Yes, your loyalty program may use many of the tools of traditional marketing. But you must ask yourself if you are using these tools to steal a disproportionate share of transactions from the “target market,” or whether you are using them as building blocks of unique relationships with individual customers. As I wrote in a recent blog post on tompeters.com, the word “loyalty” as a marketing term has been hijacked and its meaning has become diluted. It often refers more to customer bribery than to relationship building. Don’t let this happen to your loyalty program. Recognize that loyalty is not a marketing concept. It is a human concept. True Loyalty is an outcome of a relationship, not of an incentive. Take Notice How do companies approach you in their efforts to make you a loyal customer? Are they focused on transactional loyalty, or do they focus on building a relationship with you that leads to True Loyalty?. How do you compare? After noticing how other companies try to develop a loyal relationship with you, compare your company’s loyalty efforts. Are you more focused on transactional loyalty than the companies you come in contact with as a customer? Or, is your company heading in the direction of True Loyalty? Try this Consider five things your company does to create customer loyalty. Assess them, with this question in mind: Are these efforts designed to build lasting relationships, or are they designed to steer near-term transactions your way? Then, look at the policies and penalties your company inflicts on its best customers. Have these policies been designed to capture short-term financial benefit, or with an eye on how they impact long-term relationships? Finally, as you think about customer loyalty, continually remind yourself that True Loyalty is an outcome of a relationship, not of a promotional offer. The promotional offer can play a role – often a major role – but it is only valuable if it serves as a building block of a solid, lasting “We” relationship between you and your customer. Are you wondering how all this relates to your bottom line? In my next newsletter, I’ll explain how inspiring True Loyalty in your customers creates bigger, better profits for your company.
|
 |
Join
the conversation: Read
More:
Buy Steve's new book, We: The Ideal Customer Relationship In
We, you will learn: We is both a manifesto and a how-to guide that will change the way you interact with customers ... and change the way your customers think about you.
Download your free ebook, Encounters: The Building Blocks of We Relationships Get More Steve See this newsletter in your browser Read newsletters from the archive Read Steve's first book, Brand Harmony, to understand the building blocks of True Loyalty...
|
  |
|||
© 2008 Steve Yastrow. All rights reserved. |
 |
||
How to create relationship-building encounters, instead of relationship-eroding
transactions 
