Every Company needs Customer Loyalty

“Loyalty is the willingness of someone—a customer, an employee, a friend—to make an investment or personal sacrifice in order to strengthen a relationship. For a customer, that can mean sticking with a supplier who treats him well and gives him good value in the long term even if the supplier does not offer the best price in a particular transaction”. – Frederick F. Reichheld

Every company needs customer loyalty – it is required to cement customer relationships and affect an increase in revenue and profits for any business. Customer loyalty is a result of strong feelings of engagement and connection with a brand / company leading to repeat business and even a willingness to buy products or services at slightly elevated prices. A company needs customer loyalty since over time loyal customers are more likely to become the strongest and most potent brand ambassadors.  Customer loyalty, however, was hard to gain and is now becoming an increasingly rare ‘commodity’ for any company. This is probably because it encompasses feelings such as trust, commitment, confidence, emotional bonding and for some even a sense of devotion for a company / brand. How many people feel so strongly about companies anymore? With so many companies, products, and brands to choose from customers would much rather have some of all, rather than remaining ‘fixed’ to one company. In addition, given the rise of on-line buying and digitization, it is hard to keep customers focused to a single company.


So while any company needs customer loyalty, not all loyal customers necessarily become brand advocates. Companies face several challenges and roadblocks in their efforts to gain customer loyalty and then sustaining it long enough to gain raving fans. Another subject of debate and confusion is while a company may retain customers; those customers may not really be loyal ones. The type and amount of business, the frequency of buying, the time during which they buy and other such factors, determine whether a company has only managed to keep customers or whether it has real customer loyalty. For example – a sporadic customer who only buys during off-seasons or when the company has special schemes and discounts going, cannot be classified as loyal. Customer loyalty manifests itself when customers would buy from a company regularly, irrespective of schemes and discounts elsewhere and would continually do so over a long time. These customers would have the potential to become active brand ambassadors, thereby getting other people to become customers too.

Every company needs customer loyalty since loyal customers are invaluable and indispensable. They buy consistently, display their pride in being associated with your company, have deep emotional connections with your brand, and even pass on these strong feelings to their immediate circle of friends, families, and associates. Over time, they cease to be only customers – they become an inextricable part of the business and in some cases play the role of marketing and sales persons. In the world of business, the reality now is that gaining a customer is a several times harder and a lot more expensive. Every company needs customer loyalty because it is cheaper to retain the existing ones and loyal customers would be consistently more profitable.  When a customer leaves, most often they would be able to influence others to leave as well. A single customer could take other secondary customers with them too – compounding the problems and costs for a company.

Some companies however, make the mistake of confusing customer loyalty with overall satisfied customers. Some customers remain customers simply because of a lack of other options, they do not want to make the effort to find a new company, or because the company’s location is within walking distance from wherever they live / work or because they get discounts and freebies – and a host of other reasons. This does not translate to customer loyalty – customers in fact, in such cases are with a company per force but would definitely switch companies the moment they find something better. Hence, while every company needs customer loyalty, not every customer is willing to be a loyal one and companies should be able to determine them from the ‘floaters’.

As mentioned above, gaining customer loyalty, especially with digital customers is possibly the biggest challenge. These customers are smart, informed, empowered, and would not buy without reason. They would buy only when they perceive actual value – they could however, recommend a product or service if they have had good experiences and may even buy again should they require the same offerings. This however, makes them one time brand advocates and certainly not loyal customers. The key is making even online transactions personal and humanizing them, such that people feel emotionally connected and think only of your company or brand, whenever they decide to buy ‘digitally’.

There is no dearth of efforts made by companies to gain customer loyalty but they do not always bear fruit as expected. It is no longer enough to believe that customer satisfaction is a strong enough metrics and that by gauging customer satisfaction levels, a company would be able to define the strength of the customer’s relationship with the company. The customer could be satisfied at the time, but there is no guarantee that the next interaction would have the same result. A hint of trouble could send ‘satisfied’ customers to the closest competitor and therefore every company needs customer loyalty to ensure that they would overlook minor lapses and even be willing to provide valuable insights and feedback to help tide over the problem.

Companies cannot afford to take customer emotions for granted, as they are an essential and inextricable part of how customers view a company. Customers that feel emotionally connected with a company will most certainly become loyal and willing brand ambassadors over time. Every company needs customer loyalty but reaching it takes time and consistent effort. In fact, it is process which, begins with the way a company approaches potential customers and the methods it employs to gain ‘convert’ these potentials to actual customers. Post ‘acquiring’ these customers it becomes extremely crucial that the initial ‘honeymoon’ phase does not fade away and customers experience great service throughout their ‘journey’ with the company. It is the onus of the company to ensure that it can turn customer satisfaction to delight and from there to loyalty. Consistently maintaining that loyalty will in turn lead to enthusiastic brand advocacy – something that all companies aspire for, but few achieve.

Every company needs customer loyalty, since this is what makes customers come back repeatedly and often with their friends. The larger the number of loyal customers, the greater the chance of a company being able to convert them to brand advocates. Customer brand advocacy, for any company, is a strong indicator of the future and growth of the company’s business and market reputation.  While it is true that every company needs customer loyalty, but the harsh reality is that it is rapidly declining. Customers do not feel the need to be loyal to any one company or product – after all, there is a large ‘buffet’ laid out for them and they can choose one or all, whenever they feel the need. However, it is not impossible – they just need to focus on increasing customer engagement and ‘feeding’ the emotional needs of customers. Do you believe that your company needs customer loyalty and do you have it?

Learn about a new approach to better customer service!

Interactive Guides for Superior Customer Service

Create interactive decision trees for customer service management, cold call scripts or self-service. Improve sales performance metrics and customer delight across your call centers.

Interactive Decision Tree