Wednesday, March 25, 2009

Are you loyal to your customer?


Of all terms in the management lexicon, I find the term 'Customer Loyalty' the most oxymoronish.

Let us first examine what 'customer loyalty' means. A random search in google would give you many definition. I will use the most common one, extracted from wiseGEEK (this just happens to be on the top; I have nothing against or for it):

The term Customer Loyalty is used to describe the behavior of repeat customers, as well as those that offer good ratings, reviews, or testimonials. Some customers do a particular company a great service by offering favorable word of mouth publicity regarding a product, telling friends and family, thus adding them to the number of loyal customers. However, customer loyalty includes much more. It is a process, a program, or a group of programs geared toward keeping a client happy so he or she will provide more business.

Why do I find Customer Loyalty an oxymoron? Because I always see 'loyalty' as flowing from bottom to top. The subjects are (or used to be) loyal to their kings not vice-versa. I have heard of 'loyal servants'; never heard of 'loyal masters'. So far with me?

And if customer is the king why should customers by loyal to a company or a brand? The company or brand should be loyal to the customer. Suddenly the whole perspective changes, doesn't it? What this means is that the companies should go all out to prove that they are more-loyal-than-others.

Actually this happens in smaller companies. For a small company, customer is not a king; s/he is god. The company goes out of its way to serve god. As the company grows bigger, this philosophy is sadly kept aside. The focus then switches to how to make the customer loyal to the company and not the other way round. How to keep the customer happy.

So I wish to rephrase the definition of loyalty:

The term Customer Loyalty is used to describe the behavior of company's effort to serve customers in order to generate repeat purchase, good ratings, reviews, or testimonials. Some customers do a particular company a great service by offering favorable word of mouth publicity regarding a product, telling friends and family, thus adding them to the number of customers. However, customer loyalty includes much more. It is a process, a program, or a group of programs geared toward serving a client so he or she will provide more business.

There is a world of difference between keeping a client happy and serving a client to the best of your ability. You should be loyal to the customer; not the other way round.

Picture courtesy: Shannon Pifko

Stumble Upon Toolbar

1 comment:

Hemal Shah said...

Customer Loyalty is something that every company thrives for, because it brings in a repeat purchase possibility. A commercial wish.

I agree to your view that loyalty should be other way around.

Instead of Customer Loyalty, I would term it as Brand Loyalty. A customer becomes brand loyal when enjoys the product and recommends it to his/her near and dear ones. And the company be loyal to customers who are loyal to their brands.

My Library