Retaining Customer Loyalty needs to be understood correctly by small brands. The first thing to know is that normally, by psychology, a customer is inclined to be loyal to a brand he has bought – simply because the purchase represents a choice he has made and he does not like to feel or accept that he has made a poor choice. His ego works in favour of his loyalty to a brand, because it will make him defend his purchase and self-validate his purchase and investment.
Most customer loyalty failures, however, happen because something makes the customer switch his loyalty for a reason. He doesn’t take the decision to switch unless he is forced to regret his original decision. Customer loyalty for a brand is a kind of default mode, so as a business owner, one of your Content Marketing & CRM challenges is to avoid anything that forces a customer to shift loyalties. You need to focus on increasing whatever positively affirms or reinforces a customer’s brand loyalty … and you need to decrease whatever puts off the reluctantly-departing customer!
Facts about the post-purchase lifecycle of the consumer and the nurturing needed!
The post-purchase lifecycle of a customer is believed to consist of three stages. One, there has to be a fairly substantial amount of customer satisfaction built up prior to this stage, so that satisfaction matures into loyalty. Subsequently thereafter, loyalty should be nurtured by the brand till it matures into advocacy … whereupon the very act of advocating a brand to other people will in itself further consolidate a customer’s loyalty to the brand he recommends to others.
There are some research organizations that vouch for the fact that the real proof of customer engagement with the brand is the readiness for advocacy – not shares, likes, retweets or any other of the preliminary stages of getting active with the brand.
If satisfaction, loyalty – and even advocacy thereafter – are thus so crucial to brands as an indicator of the strength of the brand’s ties to its customers, and as a force-multiplier for the brand, then that begs the question: What can brands do to actively nurture such customer satisfaction, such deep loyalty? Is routine communication with the customer enough at the post-purchase stage – or does the content marketing and communications with customers have to be different for this stage?
Before we can answer these questions, it pays to take a hard look at what loyalty is really about …
What is loyalty and how is it built? How is loyalty ideally nurtured?
According to Cognizant, who have done an excellent whitepaper titled “Building the Advocacy-Based Customer Loyalty Roadmap”, the mere act of joining a brand’s loyalty program says nothing at all about real loyalty. Cognizant says:
Every consumer has a wallet or purse full of loyalty cards, but most will go to whatever provider is least expensive or offers the best perk at the moment. Participating in the battle of the discounts does not lead to higher profits. Nurturing real loyalty, therefore, involves recognizing customers with the greatest lifetime potential, as well as current status, and providing perks that address their personal desires with a strong “social” element.”
As a first stage to building loyalty and then nurturing it, content marketers have to decide who are their most loyal customers. Most brands tend to segregate their customers in descending order by the profitability of their transactions, but the smarter way to notice loyalty is actually by studying shopping frequency, spending per year, and buying across categories.
A small spender, who returns often to buy, is more loyal than a big spender who turns up infrequently or not at all. Unfortunately many brands miss the opportunity to notice or nurture frequent visitors, if their offtakes of the brand are small or insignificant!
Three critical factors that could act as triggers for customers to leave brands!
You’d be surprised at some of the most important reasons why customers switch brand loyalties. Contrary to what many of us think, we may inadvertently be doing exactly the opposite of what we should be doing to preserve brand loyalty in our hard-won customers!
1. The business has brand fatigue and the customer catches the virus!
Some companies get bored with their own brands. You can see this happening to products which have been on the shelves for many years, collecting dust. When brand fatigue sets in creativity suffers, and so do sales. James Heaton of the Tronvig Group elaborates on exactly what businesses do wrong when they are hit by brand fatigue:
What I mean by brand fatigue may not be what others mean by it. My concern with brand fatigue is not that people become tired of a brand, but rather that businesses become prematurely tired of their own brand presentation and, as a result, push to change it before it has had the opportunity to fulfil its mission or even fully register and build power in the minds of their brand consumers. If a brand is authentic, true, and well executed, if it exhibits brand health, aligns with the mission and values of the business, or speaks to the key attributes of the business’ products or services, there should be no reason to tire of it.”
So you see, customers don’t tire of brands as easily as the businesses themselves do, and if you are a small brand with itchy fingers, you have to restrain yourself from fiddling with brand consistency just as it is about to ingrain itself into the consumer’s psyche!
2. The brand doesn’t anticipate “buyer remorse” and the “fallow phase”!
In marketing and sales there are two concepts to be very wary of, especially when considering brand loyalty.
The first is what experts call “buyer remorse”, which happens just immediately after a purchase is made. Wikipedia explains buyer remorse as:
Buyer remorse is the sense of regret after having made a purchase. It is frequently associated with the purchase of an expensive item such as a car or house. It may stem from fear of making the wrong choice, guilt over extravagance, or a suspicion of having been overly influenced by the seller.”
In other words, a person, immediately after a purchase is extremely vulnerable to some psychological pressures that make him “regret” having made the purchase, but usually this is a fleeting moment and soon rights itself. Nevertheless, it’s a critical juncture when a brand has to hand-hold a customer very tightly, and reassure him that his decision was just perfect!
Closely associated with buyer-remorse is the tendency that experts call the “fallow phase”, when just after (and despite!) a satisfactory purchase experience, the buyer itches to switch brand loyalties! Roger Sinclair of Prophet writes about this phenomenon:
Why do clients, who have expressed satisfaction at the conclusion of a service encounter, too frequently appoint an alternative service provider when next they have a need for the service? For example, an architect whose client expressed complete satisfaction on completion of a project is surprised to find the next project given to a competitor. Often the firm that believes it is the incumbent in a relationship, learns that it has not been appointed for new work, only when it sees another name on the project board.”
One of the main reasons, for this running away of customers during the “fallow phase”, is believed to be caused by the long time gaps that the brand allows, to creep into its relationship-maintenance with its post-purchase customers. So this again is something brands have to anticipate and guard against!
3. In a bid to retain loyalty, the brand over-services customers to the point of being tiresome!
I think we’ve all seen examples of this when we travel and stay in hotels, where the staff have been told that “hospitality equals show of concern”. I personally get so tired by the repeated knocking on my room door with solicitous staff asking if I am OK, do I need something, why I should not hesitate to ask, is the temperature of the room OK, and how would I rate the service so far on a scale of ten?
The curious thing is that I always turn the board outside my door knob to “Do Not Disturb” but the staff think that is for visitors and not for them. In fact, they even knock after they see the board, to confirm if I want not to be disturbed! Phew! How would I be loyal to a brand that simply tires me out with its concern. Does the brand even know how desperately I want to put as much distance as I can between me and the brand, and how I’d give an arm and a leg to be rid of that pester-power?
I guess it’s the same with brands that overdo emailing, or overdo the post-interaction follow up feedback ratings!
4 ways that small brands can get smart about retaining customer loyalty!
1. Let customers return to a changing experience!
Among the smart ways to make a customer feel loyal to a brand is the idea of “fresh experiences”. A relationship between a brand and a customer is more or less like a marriage, some experts say, and there’s a tendency on the part of both to take each other for granted over time. So it pays to look at ways to make the “partner” sit up and take notice of your brand now and then and say “What’s this? I am liking it!”.
Novelty never hurts a relationship, and it applies to brand experiences too. Especially long-term customers need something fresh to return to in the brand relationship every now and again! And creating these fresh experiences takes some creativity and innovative thinking on the brand marketer’s side, but the investment is always worth it, because it costs six times more to get a new customer than it takes to retain an old one!
2. Reward customers not for loyalty but for advocacy!
There are a number of brands that do a drumroll when they announce their loyalty rewards programs and loyalty cards. But here’s a bit of customer psychology again. A customer feels great, sure enough, when he’s rewarded for loyalty, but he feels greater – and supremely high in status – if he’s been rewarded for advocacy.
If he’s rewarded for his loyalty, you are saying to him “Thanks for investing in us!” and if you are rewarding him for being your brand ambassador and advocating your brand to others, you are saying to him “Thanks for lending your influential power to our voices!” Now which of these statements, do you think, will make him feel on top of the world? Besides, there’s one more benefit. Research shows that if people are asked to advocate a brand to others, to become influencers, they willy-nilly become loyal to the brand they advocate!
3. Fix mistakes with a “Thanks, Partner!” approach!
When a brand has made some servicing mistakes with customers, there is a real chance of losing brand reputation and loyalty, right? But some smart brands have learnt to give the customer a great feeling even when they have screwed up!
They thank the customer for being a true and supportive partner … and especially for allowing them to learn how to do things better, because the customer is such an inspiration! This works beautifully most of the time, because it reduces ire and beckons at the customer’s forgiving and large-hearted side!
4. Learn the concept of “Intermittent Positive Reinforcement”!
This is a very interesting concept for brands to know – the “Intermittent Positive Reinforcement” concept! In a research conducted initially with rats it was found that when you didn’t feed the rats, they didn’t care about the feeder. Also when they were fed regularly a consistent quantity at a consistent time, they again did not seem to heed the feeder much. (You could say, they looked at the feeder with disdain!)
But when the feeder decided to always give them some food when she appeared in the room, but she gave varying quantities at unexpected times, the rats displayed maximum exuberance to see her. They could trust she would never fail them, but they never had the satisfaction of knowing when the food would come and how much would come.
The moral of the story is that loyalty is strengthened by Positive-But-Intermittent-Reinforcement. The “positive” part can be trusted, the “intermittent” part is forever a guessing game. Can your brand give customers this combination of certainty and uncertainty, and thus hold loyalty?
So what are your thoughts on this topic? Do share!
This post is incomplete without your input. The community of content-marketer solopreneurs would feel galvanized to hear from you … so do share your thoughts on this topic with us, in the comments field below this post.
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