True Loyalty

I’d like to hear your comments on my latest newsletter, True Loyalty.

As I mentioned in my last post, I’m at the 2008 Loyalty Expo in Orlando, where 500 professionals are gathered to discuss the latest ideas in customer loyalty. My keynote speech this morning focused on True Loyalty, where I encouraged the audience to evaluate their loyalty efforts not by the number of transactions these efforts generate, but by how they create customer relationships.  I closed with a story from a recent newsletter, called Turning Customer Loyalty Upside Down, describing how loyalty in a We relationship is a two-way street.

Creating True Loyalty is especially important in tough economic times. Most companies have significant untapped potential in their current customer base.  (See my recent newsletter, The Apple Farmer.)

Is your company focused more on transactional loyalty, or are you heading in the direction of True Loyalty?

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Posted in We relationships
9 comments on “True Loyalty
  1. Transactional Loyalty used to be a cool, new thing. When Kroger came out with the Kroger Plus card, it was interesting to use. Now, though, every company offers you a card, even the regional nursery where I buy most of my plants. And we’re sick of cards! We scrutinize each offer, thinking, “Does this really deserve the space in my wallet?” Transactional Loyalty programs have become commoditized like anything else.

    Interestingly, Kroger (by no means a bastion of effective marketing) still does a good job with their loyalty program. They send coupons that genuinely correspond with consumers’ interests and combine grocery purchases with getting $0.10 off a gallon at their gas stations. Have they created True Loyalty or just really sophisticated Transactional Loyalty?

  2. David Greusel says:

    Steve, I really liked your newsletter commentary on customer loyalty. I think you nailed it. I wanted to add a couple of additional thoughts:
    Customer loyalty “programs” like frequent flier miles not only don’t build real loyalty (as you point out), they can also backfire. Some customers end up so annoyed at blackout dates, restrictions, and rules that they end up angry with a business they otherwise would have felt okay about. Ironic, huh? And the stores that make me carry around wallet cards so I can take advantage of those “special” prices for “members” make me so mad I can hardly see straight! Do they think we have infinite wallet space? Do they think they’re the only store doing this stupid technique? What if I forget my card? Do I then get to pay the overpriced “non-member” price? How fun is that?

  3. bonnieL says:

    Steve, three words about your customer loyalty newsletter: yes, yes, and yes.

    People want honesty. They want to feel connected. They want to trust and be trusted.

    As you wrote Steve, loyalty cards don’t breed commitment. They breed best-deal comparisons.

    @David G. Too many cards to carry is right! Not that we all have iPhones – but one clever lad scanned his loyalty cards into his iPhone. The photos worked with the scanners!

    best,

    bonnieL

  4. Nerio Vakil says:

    Excellent Newsletter, Steve. I also agree with David Greusel’s comments that most loyalty programs can backfire…(I think they are devised by accountants!!) as they have so many rules and restrictions which are not customer friendly.
    Customer Loyalty can never be bought. There is no price one can put on it. It has to be EARNED and is a continuous process.

  5. Judith Ellis says:

    The newsletter is excellent. Loyalty in relations of all kind are preferable. Why not in business? We are social beings, having the need to express ourselves. Loyalty conveys that the other cares enough to listen and not merely sell.

    Transactional loyalty is interesting. A few years back I purchased a Starbucks card. It was a beautiful card with warm colors and an idyllic fireside setting. I held on to the card, but once the time came to add to it, I never did. I still have that card and I still have not added to it.

    I go to Starbucks once a week if that, but the card has not made the difference in my going there more often. There is a quaint little coffee shop that I frequent more.

    Thanks, Steve, for the newsletter and books. I have read We and Brand Harmony and love them both.

  6. Thanks for these comments. Judging by what you are all saying and the reactions I received at the Loyalty Expo, I’m encouraged that True Loyalty has legs as a concept. What does True Loyalty mean to you?

  7. Judith Ellis says:

    True loyalty means for me that in spite of down times or difficult seasons, there are those who care enough about me to stick with me and I with them. But true loyalty requires respect and excellence too.

    By this I mean, if your products become less valuable because of cost cutting measures, for example, I do not feel terribly inclined to continue supporting your products over extended periods. But if we have a strong relationship over a period of time, I will hang in there longer still.

    While I respect your decision to handle your business as necessary to stay afloat or otherwise, my business may go elsewhere. This decision should also be respected. But I will remember you, our time together, with fondness. Should the quality return, as Coke when it returned to its original recipe, I will return.

    This to me is true loyalty.

1 Pings/Trackbacks for "True Loyalty"
  1. […] consumer behavior not their words @ Brand Strategy Insider* Insights from the Loyalty Expo 2008 @ Yastrow* Branding – the way to consumer loyalty. “The average consumer is hit with 1800 marketing […]

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