You are doing Loyalty the wrong way.
There are two models of loyalty: emotional and intellectual.
Emotional loyalty is when the customer develops feelings about doing business with you and your products, when they absolutely “love” what you do and would not think of doing business with anyone else. Price is not an issue and the experiences you provide are geared to extending and growing those feelings. Think of it as a relationship where you will do all you can to have them continue to like you, to appreciate what you offer, and to develop an emotional bond.
Intellectual loyalty is a much shallower relationship, where the customer has to justify each and every interaction with you as opposed to going with someone else. When they wonder why they have not moved their business to someone cheaper, or newer, or better and they can find some reasons to stay where they are. Intellectual loyalty focus is on the current interaction, and maybe one or two into the future. Organizations only want to get new customers and keeping them – for the lowest cost and effort. There is no intent to create a long-term relationship.
Fewer than three percent of companies I have worked with have focused on emotional loyalty (Apple is probably the best known of them, Four Seasons is another).
The rest just focus on the one-nighter equivalent of loyalty: intellectual loyalty.
Are you building long-term relationships – or are you just giving your customers a one-nighter?
If you treat all customers the best you can, give them your honest price, with as much CRM as you can afford, then I suppose that would be intellectual loyalty.
It is the bigger companies where you just expect more that disappoints you.
I agree with the previous comment – it’s the bigger companies that disappoint.
It makes me wonder, is that because they’ve gotten too big to listen (and possibly don’t know how to adjust to this new world where knowledge is shared so freely and quickly!) and think they can do whatever they want because they’re bigger than me? Small organizations have a lot more to lose when they lose one customer, and they tend to be better at creating a bond when working with you.
So the question is, if all companies are small at one point (because they had to have been once) where does the disconnect happen to move from having emotional loyalty to intellectual loyalty?
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@Todd,
I think you are right on your definition for intellectual CRM, but it is somewhat easier to move into emotional CRM – add CEM. I did not say a slam-dunk, but if you have your CRM and personalized relationships under control, then adding CEM is simply a matter of building the strategy and continuing what you are doing. It should be a natural progression. Most companies, however, falter at the thought. They get confused thinking it is another major undertaking, isolated from CRM and previous implementations. Too bad, it would make a significant difference.
@Sherrie,
Great question. I think the answer is partly on the size, partly on the mess of internal systems they have. They can listen, heck – anyone can listen, but they cannot act. They either have not empowered the people in the frontline to act, or they don’t have the right systems to take on it (think about a mega telephone provider that grew through acquisitions – how can they take all their systems and data and integrate one more thing into it without going crazy? SOA and cloud is the future, but today they are stuck where they are). Also, think about the ability to personalize millions of interaction daily so you can customize experiences and build that bond… the few that tried are still trying to recover from their previous attempts.
I think technology will make a difference, but we are some 3-5 years out. Then, we can have this conversation again and probably say different things.
Thanks for your comments, and for reading.