Cash in on loyalty magic
- Louise Kelly
- 29 January 2008
It takes a lot more effort to attract a new customer than to keep one. Businesses that create loyalty in their customers are far more profitable than their competitors, says Louise Kelly.
What is this magic ‘loyalty’, and how can you get it? Loyalty is based on a customer’s response to your brand. Years ago, companies used to explore the correlation between satisfaction and loyalty but, over time, experience has shown that satisfaction is a weak indicator of loyalty. It’s not surprising, after all, ‘satisfaction’ literally means ‘enough’, and loyalty is all about creating the desire for more.
Today’s leading brands measure loyalty through advocacy, the degree to which their customers are so impressed they would recommend the brand to a peer.
Seth Godin, in his marketing blockbuster Purple Cow: Transform Your Business by Being Remarkable, explores this concept further. He says leading brands are beyond ‘very good’; they are ‘remarkable’. And remarkable means ‘worthy of comment and discussion’, which creates advocacy.
At Hearts and Minds, we believe a brand becomes remarkable when the experience of a product or service shines out among the competition. You can design and measure how your business shines by understanding your customers’ emotional responses to your brand. Emotions are like a set of traffic lights that govern your customers’ decisions, telling them to ‘stop’, ‘go’ or ‘wait’.
Over time these emotional experiences linger in the long-term memory of a customer, d create loyalty. People will always recall emotionally-charged experiences as stories in their heads, and these are the stories they tell others.
So what does all this mean in a world where business edge is increasingly determined by your ability to compete online?
In order to plan how the internet can increase loyalty, you first need to map out how your customers make decisions. This could be based on available information, recommendations, price, or the perceived level of need. Once you understand your customers’ decision-making milestones, and their ‘emotional traffic lights’ at each of these milestones, you have the key to loyalty magic. And the web can play a powerful role in ensuring this loyalty is ongoing.
One tool is to offer online decision-making support. For example, a small suburban accountant could send tips about getting ready for the end of the financial year. This would become even more powerful if the accountant tapped into the emotional needs around the end of the financial year, by promising to keep information simple and fast. Or a health-food shop could provide health tips. It could also look at the motivational issues customers may have, such as keeping up their wellness regime.
Online decision-making support enables businesses like yours to build profiles of your customers’ needs. Combine this with insight into their decision-making milestones and emotional traffic lights, and you can create a message that is more relevant than those of your competitors.
