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Are you building loyal customers, or just bribing them?

“Now I want to rant about how the word “loyalty” has been kidnapped. Loyalty has been dislocated from its true meaning and is now used to describe programs and promotions, usually supported by sophisticated software, that encourage customers to buy from a company multiple times.
Hey, there’s nothing wrong with multiple purchases, but return visits don’t necessarily correlate with true, meaningful loyalty. This kind of tit-for-tat transactional loyalty can be fleeting. Purchase intent one week doesn’t automatically lead to purchase intent the next week, if a competitor offers a better sale price or promotion. This is the kind of loyalty that can evaporate quickly when another company offers better incentives.
The sturdiest, most indelible loyalty is that which is built from a relationship, and not from bribery.”

www.tompeters.com (16 Sep 2008)

I came across one of Tom Peters’ famous “rants” on his website last week, and it struck a chord.

This is what many companies are doing in Kenya today: they have given up on building meaningful relationships with customers, and are resorting to cheap bribes in the name of promotions and giveaways.

As I teach on my executive programmes: a repeat customer is not a loyal customer. A customer held captive by purely economic incentives (such as air miles, points schemes, promotional offers) is not the customer you really want, for he will be gone before you can say “two-for-one” when someone else offers a better deal.

A loyal customer is someone who has aligned herself to your brand, and believes she shares some deep-seated values with you. She is someone who thinks she has a long-standing, stable relationship with your company, not a one-night stand. The connection is deeper than the wallet, in other words.

Equally, a loyal customer is not an evangelical customer. The evangelist is the one you REALLY want – the one who is quite happy, at her own expense and in her own time, to spread the “good news” about your company. This is the customer with whom your brand has really struck a chord: she believes you believe in the same things, and feels a deep-seated emotional connection. If you have indeed managed to develop some evangelical customers – well done. They are a badge of honour.

But let’s not be in any doubt: this stuff is difficult! Gaining loyalty and evangelical loyalty can’t be done by everyone. Only the truly great companies manage to do it. That is why you almost never see those companies making so-called “special offers”. When was the last time you bought a Mercedes on a special offer (buy one, get a free golf bag!); or saw Serena Hotels enticing you with freebies; or bought an Apple Macintosh on a giveaway promotion?

So why do so many companies do the cheap and easy thing in Kenya? Partly because you, dear customer, are all too willing to be seduced by a puny discount. Because too many buyers do break down the doors when there is the whiff of a giveaway. Until that changes, we are not going to build too many great customer relationships. Those who do, however, will smile all the way to the bank.

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