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The Loyal Customer

The Loyal Customer is perhaps the most elusive subject of all management science. One recent customer loyalty study suggests that the psychology at the heart of customer buying patterns and preferences is far more complex than previously thought. A consistent finding from customer research is that 60% to 80% of lost customers across all industry segments reported on surveys just prior to defecting that they were “very satisfied” or “satisfied.” To attract and retain the most loyal and profitable customers, a firm must understand the true drivers of loyalty—the customer attitudes that drive the different types of behaviors that must be understood and nurtured. These can be understood as spectrums of attitude and behavior along 3 dimensions:

By analyzing these indicators of this model, different loyalty segments emerge, each with its own distinct loyalty drivers. This approach can help you better tailor your advertising plan, message and media choices to what your customers are thinking and what motivates their purchasing decisions—and can help retain the most profitable customers.

(Adapted from The True Drivers of Loyalty by Woody Driggs, Customer Relationship Management 9/07)

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Keeping Customers Engaged

“As products and services have become commoditized, the ability to keep customers engaged is based on drivers other than product and price,” says brand loyalty researcher Robert Pasikoff. More and more, customer service is taking on a larger role in purchasing decisions. (Brand Week 3/19/07)

A new study for Hallmark and Barnes & Noble titled, Carlson Relationship Builder 2007: Getting It Right in Retail, finds when relationship strength is high, the customer is 49% more likely to remain a customer than when it is low, and 55% more likely to shop at the retailer within the next year. In addition, a customer in a strong relationship is 1.82 times as likely to recommend the retailer to others. Strong relationships are characterized by trust, commitment, a two-way dialog that meets mutual expectations of the company and customer. Customers with high levels of relationship strength aid a retailer's bottom line.
(1 to 1 Weekly 6/18/07)

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Inclusive Marketing

America’s Marketers have gone to great pains to make their ads “inclusive” by including a woman here, man there, black person there, Asian here, Latino there. They seem to say, “We’re being fair. We’ve included everybody. Buy from us.” But a new approach to marketing says the seemingly inclusive ads are nonsense, almost as offensive as the advertising campaigns of old that portrayed all wholesome families as white. Monique Tapie, Global Advertising Strategies, says the old “Multicultural Marketing 101” approach assumes all Asians are alike, all African-Americans are alike, all Spanish-speaking people are alike, we are all alike, which means we’re all mainstream…and mainstream is still considered to be white. Ethnic marketing is not a matter of cynically exploiting racial, ethnic, class or other differences for profit. It’s a recognition that differences exist, that America is composed of many cultures, and that if you plan to sell to those cultures, you’d better try to do a better job of understanding them.
(WashingtonPost.com 6/10/07)