Once upon a time, customer loyalty seemed to be almost a given. My dad was a Ford man through and through; it pained him to even ride in a friend’s Chevrolet, and he wouldn’t even consider crossing that line and buying a GM or Chrysler product for himself, much less one of those “foreign” cars.
As for me, my first car (that Dad didn’t give me) was a Mustang, but I soon strayed from the fold and by the time I was thirty, I had owned a Pontiac Firebird, an AMC Gremlin and even a little red Fiat X 1/9. Maybe the propensity toward brand loyalty increases with age, though, because later on I did become fiercely loyalty toward the Saturn brand, buying three of them in a row before the company’s demise (and I’m still driving my 2007 Ion since I can’t get a new one).
Or maybe not. I’ve always found it a little ironic that my key ring holds about a dozen miniature “loyalty cards” from different grocery stores. I mostly go where the sales and/or the particular products I want happen to be. There are some loyalty programs that do work on me, though. The cruise lines offer some very desirable perks to their “platinum” and “diamond” level customers (those who have racked up a certain number of cruises or cruise days). My husband and I were recently considering taking a cruise that had a good price and the perfect itinerary – but decided to go with a different one instead, on a cruise line where we already had accumulated status points.
In building a loyalty program for your MSP, you’ll want to consider not just incentives for customers to stay with you, but also ways to put them to work for you in attracting new customers. Of course, the very first component of a loyalty program is just to provide an excellent product or, in this case, service. The second component is to treat your customers well. Just one or the other by itself isn’t enough.
Verizon Wireless has, at least in my part of the country, the indisputably best network. That has grown Big Red a big following – but recent user-unfriendly policy changes (no longer offering unlimited data plans, changing some customers’ upgrade eligibility dates) has tested the loyalty of some of their long-time customers. T-Mobile, at least in my area, has a reputation for great customer service – but as my son, who tried very hard to like it, unceremoniously put it, “their network sucks.” He didn’t stay with them for long, because he needed a usable signal.
Winning customers’ voluntary loyalty is much more valuable in the long run than forcing loyalty through contractual penalties for leaving. It’s the old “carrot vs. stick” issue. Staying with the wireless carrier model, those companies use both to suck customers in and then keep them, often against their will. The carrot is a heavily subsidized phone, for which most customers couldn’t or wouldn’t pay full price. The stick is the two-year obligation that goes with it and the heavy penalty (now as much as $350) for leaving before those two years are up. There’s nothing illegal or even unethical about it, but such heavy-handed tactics certainly don’t endear you to customers.
There are better ways to engender loyalty. Saturn won me over in part by making cars I liked, but mostly by providing a car-buying experience that was different from other dealerships. There was no haggling over price, no high pressure to finance my vehicle through them, and just generally a much more helpful attitude. Then as a Saturn owner, I always felt that I was treated like royalty when I took my car in for service.
Of course, one could point to the shutdown of the Saturn brand as proof that such customer service doesn’t work. But if you really delve into the rise and fall of the brand, you’ll find that it really died of neglect. It was when GM allowed Saturn to lose its differentiating characteristics that sales started to decline.
A Forbes article published last summer puts it well: “If you want to build customer loyalty, start by making a decision: Are you willing to put the customer at the center of everything you do?” It really is that easy – and that hard. I found it interesting that the author used the term homebuilding to describe the process of creating a service, product and environment that inspires customer loyalty. That’s exactly what Saturn did that made me (and many others) not only keep coming back, but recommend the brand every chance we got. At Saturn, you didn’t just buy a car – you became a member of the Saturn family.
Many brands “talk the talk” of home and family in their advertising, but they don’t “walk the walk” when you actually deal with the company in the role of a customer. There’s a big disconnect between the ads and the way you’re treated when you speak to a sales person to open an account or to a tech support person for help with a problem. The key to creating lasting customer loyalty is for every employee to adopt the “family” attitude, not just the one who works with the ad agency to make a commercial.