I recently tweeted with Esteban about whether relationships are still dominant in a business context. This because in my point of view more and more relationships are replaced by mere encounters or pseudo-relationships.
In the real world of 2009, flooded with encounters and commodities, a loyalty concept does not seem to make much business sense for me. Common business sense is to define loyalty merely as actual behavior of buying more services or goods.
Talking about buying: love can be bought, sex can be bought, loyalty can be bought. But I doubt whether all these are great experiences at the personal level!
Today is a loyalty-as-you-conceive-it-does-not-exist type of day.
Operating under the idea that loyalty can be measured, monitored, and the resulting insights applied, CEM looks to create customers that make the conscious decision to purchase, not of inertia or absence of alternatives, but in the spirit of a strongly positive relationship.
I wanted to comment so bad there, point him to my previous post on how measuring loyalty is wrong… but, they did not allow comments. The last point in that statement, about a customer using the relationship as a basis for the commitment, kept resonating in my mind.
Later I read for the third or fourth time someone tweeting that airlines that offer WiFi get more customers. The article says:
According to a study published this week by Wakefield Research for the Wi-Fi Alliance, about 75 percent of frequent business travelers surveyed said they’d choose an airline based on whether the flight has Wi-Fi or not. Half of respondents said they’d even consider moving their reservation by a day to get on a flight that offered Wi-Fi. And more than 70 percent of those surveyed said they’d rather have Wi-Fi access on board a flight than a meal provided by the airline.
That got me thinking (and tweeting if you were there at the time and read some of it).
I mean, if customers are loyal (and look at how much airlines spend on loyalty programs and rewards), then why would they chose to go with a better feature (and not even a free one, but a paid one at that)?
I said before there are two types of loyalty, emotional and intellectual, and I now further that by saying that emotional loyalty is not an option.
No matter how hard you will try in today’s world you cannot establish an emotional connection with your customers (OK, prove me wrong and tell me the million companies that you know that have done that). Emotional loyalty is a roll-of-the-dice, it may happen but is nothing organizations do, rather the customer’s personality (and, no – you cannot replicate that personality to create more emotionally-attached customers).
Since you know already that measuring Loyalty by itself is useless, and you are going to use Loyalty as a metric (against my objections) then you are going to be talking about rational loyalty. And whatever metrics you use in your NPS or NPS-like approach to correlate that to business functions, you have to make sure they relate to rational loyalty: price, features, functions, discounts, perks, and similar.
And, make sure you understand that despite what your measurement may tell you (promoters vs detractors vs neutral) – that is the loyalty that is easily bought.
NOTE: thanks for Haim Toeg (@htoeg), Trip Babbit (@TriBbabbitt), Graham Hill (@GrahamHill) and Mitch Lieberman (@mjayliebs) for discussion to grow this post. Also, thanks to Roderick Morris for letting me (unknowingly) pick on his post to further the conversation – done with the utmost respect.
Esteban Kolsky is the founder of CRM intelligence & strategy where he works with vendors to create go-to market strategies for Customer Service and CRM and with end-users leveraging his results-driven, dynamic Customer Experience Management methodology to earn and retain loyal customers. Previously he was a well-known Gartner analyst and created a strategic consulting practice at eVergance.
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