Many companies want to improve customer loyalty but they ask the wrong questions. Instead of seeking ways to improve customer loyalty, start by improving company loyalty. Consider these 3 questions:
- Should we be loyal to all customers? – Trying to be everything to everyone and satisfying no one is a common recipe for failure. Businesses, as a general rule, are better served by engaging with their target markets/customers very well and by politely declining customers that are outside that market. For example, Apple does not build mainframe computers even though the mainframe market is large and lucrative. Start by pursuing the “right” customers.
- How loyal are we? – How loyal is our company to our customers? It is easy to think of all the ways we expect customers to extend loyalty to us. But do customers perceive us as loyal? Do we keep commitments, listen to understand, and act in ways that benefit our customers? To get loyalty, give loyalty.
- Is our loyalty conditional? – Would our customers say we respond to their needs always, or only when it suits our needs? Here are two quotations that when applied to customer loyalty help illustrate the difference:
Stand with anybody that stands right, stand with him while he is right and part with him when he goes wrong. – Abraham Lincoln
Lincoln’s statement is conditional and is the way customers behave – they extend loyalty only as long as loyalty is extended.
There’s something wrong with your character if opportunity controls your loyalty. – Unknown
“Unknown’s” statement is unconditional and is the way companies want customers to behave – extend your loyalty no matter how we behave.
In a free-market economy, and in well-run businesses, these two statements aren’t mutually exclusive. Improving customer loyalty starts with a focus on the target market. Companies that miss this target early end up with customers they don’t even want to serve. Plus, once the company has selected the “right” customers it becomes more important and also easier to align company capabilities with customer needs because it benefits both parties.
The pivot point is that having loyal customers is a result being a loyal company. To get started, (1) choose the right customers for your business and (2) demonstrate strong alignment with their needs. Ultimately, it sounds a lot like the golden rule: to get loyalty, give loyalty.