My dictionary says that loyalty is “a feeling of devotion, duty, or attachment to somebody or something.” Of course, there are varying degrees of loyalty. Dogs are loyal to us on good days and bad. Many British subjects are still loyal to the Crown. And Chicago Cubs fans – now there’s a loyal bunch.
Wouldn’t it be great to find a loyalty panacea so that all our customers would be loyal to us forever in good times and bad?
Back to reality…
The concept of loyalty is worth examining to determine if it applies in your industry. Research shows that loyalty plays a strong role in the consumer sector.
Now I’m not a consumer expert, but I am a consumer, and I can’t help but wonder: does loyalty lead to consistent purchasing or does a great product experience lead to consistent purchasing?
I really like my favorite consumer brands and buy them repeatedly, when I’m thrilled with the product. I guess you could say I feel loyal to the products. But, if the product were to become mediocre or under-perform to my expectations, would I be “loyal” regardless? Not a chance. Would you?
I’m probably not alone here. What appears to be loyalty is most likely product satisfaction that leads to repeat business.
So, in the B2B world, what drives customer loyalty? Does it even exist? Most marketing gurus believe that marketing and (heaven help us) branding drives customer loyalty. And, they believe, loyalty leads to consistent purchasing.
Do you have loyal customers? Even if you think you do, if your product or service became substandard or mediocre, how loyal would your customers be? Not that loyal, huh? That’s what I thought.
Hopefully most of our customers will stick with us through the occasional hiccup or error. Great relationships can withstand hurdles.
The bottom line: In B2B, product or service satisfaction is what drives the long-term relationship. In B2B, I’ve found no proof that loyalty even plays a role. If you serve your customers well, they’ll continue to buy. If you continue to solve their pain for less than the pain is costing them, and you and your team are pleasant and easy to deal with, you’re probably looking at a long-term relationship.
Billions are spent every year in this country in the pursuit of customer loyalty. Unfortunately most of that money is spent in marketing campaigns. And although marketing dollars can create awareness and interest in your target audience, marketing can’t keep customers coming back to you again and again. Continued great execution can.
Do you think the pursuit of Loyalty is silly? If so, where should we be investing?
@Wittlake Here's an example of both: Insurance companies selling to business. That's a once a year sale, right? In that case where there's no sales/service team touching the customer daily, working on challenges, etc, Marketing can absolutely provide relationship building and good will through regular touches. Data warehouse sale: generally in these deals, you have the seller, the PS, the CS, often the execs, Apps folks - in other words an entire team that almost embeds in the accounts. Marketing truly can't do much to help or hurt. A modicum of touching is fine and more meaningful actions (asking customers to participate in user groups, co-author, Peer Relations, etc) can help make the customer feel valued. But this relationship is make or break on the relationship and execution. Here's why I think it's important to correctly ID it as Satisfaction: Resourcing. Different HQ resources are needed to drive Cust Sat. When companies mistakenly chase Loyalty, all sorts of crazy stuff gets resourced that has no chance to drive Satisfaction.
For most businesses, nothing is going to overcome a consistently poor experience with your product/service/solution. If that isn't going right, stop and fix it. Marketing will not solve your problem. However, marketing may have an important role after that.
Loyal customers are customers that expect to continue working with you. They are confident not only in your service today, but in what you will continue to provide in the future. In B2B, this is where marketing's role in loyalty comes in.
@Wittlake
Here's an example of both: Insurance companies selling to business. That's a once a year sale, right? In that case where there's no sales/service team touching the customer daily, working on challenges, etc, Marketing can absolutely provide relationship building and good will through regular touches.
Data warehouse sale: generally in these deals, you have the seller, the PS, the CS, often the execs, Apps folks - in other words an entire team that almost embeds in the accounts. Marketing truly can't do much to help or hurt. A modicum of touching is fine and more meaningful actions (asking customers to participate in user groups, co-author, Peer Relations, etc) can help make the customer feel valued. But this relationship is make or break on the relationship and execution.
Here's why I think it's important to correctly ID it as Satisfaction: Resourcing. Different HQ resources are needed to drive Cust Sat. When companies mistakenly chase Loyalty, all sorts of crazy stuff gets resourced that has no chance to drive Satisfaction.
For most businesses, nothing is going to overcome a consistently poor experience with your product/service/solution. If that isn't going right, stop and fix it. Marketing will not solve your problem. However, marketing may have an important role after that. Loyal customers are customers that expect to continue working with you. They are confident not only in your service today, but in what you will continue to provide in the future. In B2B, this is where marketing's role in loyalty comes in.
Couldn't agree more. Loyalty is a word that we use to tranquilize ourselves. It gives us an excuse for delivering poor product and service. "Don't worry, our loyal customers will stay with us."
B2B customers have problems that need to be solved. Many of these problems are related to managing risk. Risk of becoming non-competitive, risk of breakdowns in customer service, etc. Injecting "loyalty" into the conversation only serves to blind us from where our offers and service are deficient.