Loyalty or slaves of commitment?

Yes it is a recurring theme, trite, loyalty, but be so kind to let me say a few words about it, I think you may be interested, after all is the group that generates more profitability. They will agree with me that the need that we have in these times of loyalty to our clients becomes a goal not only priority, but strategic. It is demonstrated that a loyal customer, is more profitable, is better known and above all is an asset of the company that generates a high percentage of our profitability. But we can also say that the ratio of loyal customers is a fact that tells us how many customers are satisfied with our practices, and trend of this data, if every time we do better or on the contrary they feel better in other “arms”.

We are seeing in the daily practice of business actions many companies that intensify their work in order to get more loyal customers. This is undoubtedly worthy of praise, and certainly will generate good results, however, I think that in the “bag” of loyalty are getting actions, concepts and metrics that do not correspond to loyalty as such, or at least as that loyalty to which we mention in terms of profitability.

It is very important to define what is the loyalty in a company and there will probably be many ways to understand them as organizations, some say that loyalty is making friends, others say that the customer who buys me more than once, another says that they are the clients that They speak well of us, I tell them what I always maintain and transfer to my clients, loyalty is the amount (rate) of clients who repeat voluntarily in my company. In other words, we will quantify as a loyal customer the one that buys us back, that this purchase is made voluntarily and that the purchase decision is made based on our confidence in our behavior and commercial actions. This is a loyal customer, therefore the loyalty ratios that many companies show me do not correspond with this description, and is that we will learn very little from customers if we simply see how many times our company comes to buy, therefore friends are friends and does not have to make us profitable, and those who buy us against their will are not faithful and are obliged to So they come back because we are their imposed option. Let’s look at “loyalty” campaigns (mandatory), one of great success according to those responsible, which many companies carry out, where they attract customers through great offers on products or services in exchange for a mandatory stay in the company. They are economically very well designed campaigns, what I’m not so sure is that first: it’s a loyalty campaign, the term seems like a euphemism, and secondly if they really are as profitable as they seem,

Because I think these campaigns are not interesting in many cases, neither economically nor at the level of branding, probably because they force fidelity.

If you think we can take a look at these campaigns, I mean those that consist of offering gifts for the client and that of course requires a commercial commitment from the client, observing how they are designed (a high% of them) we can identify errors that go against our commercial interests:

  • We buy the client, only the one that is left to buy
  • Therefore we are buying the client’s will, we are forcing them to be faithful to us, and this is already known what consequences
  • We oblige the client to remain imprisoned, at the beginning with his consent, as we do not fulfill his expectations, against his will
  • The client has no margin of action to punish with his absence or abandonment, less consumption, the possible deficiencies or lack of compliance of the company
  • These campaigns of permanence are merely economic and with temporary priority in the short-medium term, which is not bad, but it would be short-sighted to see the current profitability to stop suspecting times of poor results in a short time until our relationship with the client is not Of your liking
  • In the structure of market shares, not all customers have the same value for the company (ABC analysis), nor does the company have the same behavior pattern with all of them, which is why I think it would be more interesting to perform an appraisal of clients depending on their relationship with the company, to be able to work differently with them, could be a taxonomy similar to this: faithful client, retained, prisoner and potential. This would be reason for a new brief
  • During the “presidio” time of the client different scenarios can be given: that the client is satisfied with our relationship and therefore continues (a difficult thing in a high% due to whoever lets himself buy now he will let himself buy later and therefore does not look for a relationship of continuity but of interest), that the client suffers during the prison but has a Stockholm complex and in the end we get to have a continuous relationship with them, but keep in mind that this complex is a pathology that as such is cured and we do not know when they will decide to leave us and start talking bad about us, and finally, and I think the client who is in jail worse because of the conditions that he decided to accept some time ago, this client will be a bad candidate for cross sales will become a bad prescriber,but above all it will be a megaphone that will scare away new customers
  • The campaigns of permanence reflect the insecurity of the companies to win over the client, force through exceptional conditions to retain clients for a time that monetize those conditions, how profitable would those same campaigns be if we gave a trial period, check our level of service and involvement in their “problems”, the client would see his expectations covered and then keep that customer’s happiness in time ?, I guess it would be much more profitable
  • With this type of campaigns, which are really sales promotion campaigns, we are “telling” the customer, come with us, we will give you more, so we are not focusing our efforts on convincing you that we are the best option, but rather We are putting you in the position that you choose us with behaviors that seek the purchase of your will, we are converting it into promotional clients, the most difficult to retain, and therefore in a labile and unstable client
  • These campaigns are the obvious proof that we do not make a real effort to have a competitive advantage, that the whole environment that the client finds to solve their problems offer the same, this sends a message of homogeneity, all the companies are equal, this invites you to take the option that gives more, not the company that best meets your needs. This is the beginning of the end to compete for marketing. The vision on the part of the client that all companies are the same, to you that from your organization is trying to do well will create a problem and end up succumbing to give more than their competitors, bad practice

In short, loyalty is profitable, when we all work in the company to win the will of customers, see how the process of attracting loyal customers is very similar to the process of leadership of people. Let’s not confuse CAMPAIGNS OF FELLOWSHIP WITH SALES PROMOTION CAMPAIGNS. That profitability will have interest and will transcend in the organization, when indeed, freely the clients decide that we are the best option, this is the true competitive advantage of the solvent companies. Do not confuse customer loyalty with buying customers, forcing customers or retaining customers, are concepts that are next to the main, loyalty, but that are not synonymous at all, and in economic terms are not cousins. All those terms differ in causality, Why do customers come to my company ?, When it is not the client’s will that cause, something we will be doing wrong and we will pay, sooner or later. The solution is to work for creating loyal customers, not “imprisoned” clients. Has it been worth it to spend those 5 minutes reading this trite topic ?, I hope so

Leave a Reply