People discuss loyalty today as a character flaw or a corporation flaw. In years past, employees could hire into a company and plan to remain there a career lifetime. Companies would show their appreciation in return by retaining employees for thirty or more years.
Brand loyalty is different today as well. Car buyers used to buy the same brand car or even model every time they could afford a new car. Many people purchased the same brand television or refrigerator over and again.
These days it seems as though most consumers are driven by the best price. Employees are driven by the biggest pay check or benefit package. Does loyalty exist anywhere these days? What happened to loyalty? Why does loyalty or the lack of loyalty matter, especially to those in sales and marketing?
Building Customer Loyalty
A new book by Timothy Keiningham and Lerzan Aksoy with Luke Williams, Why Loyalty Matters (Benbella Books, Inc., 2009), “Is grounded in the most comprehensive study of loyalty ever conducted, and what it reveals can change your life.”
The authors use the first chapter to describe to readers why loyalty does matter including:
- Loyalty builds and sustains all types of relationships.
- Humans need each other to survive and thrive and loyalty helps bind people together.
- The world has shifted from long-term societies to transactional relationships and ephemeral contacts.
- Loyalty has gone out of fashion.
Economics of Loyalties
The authors contend that “Loyalty is the right strategy in all aspects of our economic lives: as employees, as customers, as managers, and as business owners. And by right, we mean that it tangibly maximizes value-emotional and economic.”
Loyalty creates a chain reaction that spurs:
- Happy employees
- Happy customers.
- Greater revenue and larger market share.
Research for the book found that there are four critical elements in meeting customer needs:
- Capability – capable employees with the proper training can deliver higher value and service to their customers.
- Satisfaction – employees that are satisfied with the company they work for in turn will treat their customers better.
- Loyalty – loyal employees are willing to forego short-term demands for long-term benefits.
- Productivity – employees that are productive can raise the value of a company’s offerings to its customers.
Customer Loyalty
Sales managers often define customer loyalty as a feeling versus attaching hard data to actual loyalty levels. According to the authors, loyal customers will continue to buy, continue to allocate a higher percentage of their spending, and will be more willing to recommend a company or a sales representative to others.
The book details several ways to determine customer loyalties including using a good survey or building a panel or focus group.
The authors wrote, “Knowing how customers feel and how they actually behave allows us to gauge the firm’s level of loyal customers more accurately. It is simply the percentage of customers who both feel loyal and act loyal (e.g., give the majority of their share of wallet to the firm when making purchases in the category).”
Loyalty and Sales
Being a good sales and or marketer requires ongoing training to keep professional skills up-to-date, and tons of reading including the newspaper, trade and consumer magazines and books to keep current with the latest trends.
While the book, Why Loyalty Matters, explores different kinds of loyalty, faith and loyalty, a loyal society, and the personal side of being loyal, the business lessons it teaches are immense and vital to success.
Understanding one’s customer base is required in order to feeling loyal to that customer base. Professional sales persons, marketers and public relations professionals can all take something away from this book.
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