The true indicators of a loyal customer are found in the experience, not the outcome, and in those touchpoints that are important to the customer, not the marketer.
James Kane contends that there are four types of relationships that brands have with consumers:
- A small portion of your relationships are hostile. They are dissatisfied and will tell everyone.
- Most of your relationships are transactional; with every promise you make, all you’re doing is setting up an exchange.
- Your best relationships are predisposed; your customers have no complaints, but when something better comes along—and it will—they’ll leave you in a second.
- The only safe relationships are loyal. They have formed a nearly unbreakable, emotional bond with you.
Speaking at the AMA’s 2016 Symposium for the Marketing of Higher Education, Kane, author of The Loyalty Switch and an expert on customer loyalty, addressed how and why humans develop relationships and what that means for marketers attempting to accumulate as many loyal customers as possible.
The difference between loyal and satisfied customers, Kane says, is the difference between cats and dogs. While a dog anxiously awaits your return, a cat is only bothered by you because it knows you’re the one who’s given it food. “Satisfaction is about the past. Loyalty is about the future,” says Kane. “That doesn’t mean you don’t have to satisfy your customers. It just means that those who are satisfied aren’t loyal.”
How marketers develop loyal relationships is both simple and complex.
“It’s not about brand; you can’t be loyal to the brand. It’s not about reward programs or any version of them,” says Kane. “And it’s not about satisfaction.” Rather than the metrics that marketers traditionally measure customer satisfaction and engagement on, Kane suggests the true indicators of a loyal customer are found in the experience, not the outcome, and in those touchpoints that are important to the customer, not the marketer.
Basic analytics will suggest measuring time on page, clickthroughs and bounce rates, but which of the events in your Google Analytics report notes that you helped a customer send a last-minute anniversary bouquet? And which one sends that same customer a reminder the next year? That’s the data, says Kane, that is gathered insightfully, and is the key to truly knowing your customer.
“Loyalty is about fostering a sense of trust, belonging, purpose,” he says. Trust is engendered by managing expectations. Giving your customer a sense of belonging involves knowing them as more than a segment or a demographic buzzword, like millennial or Gen Z. And purpose allows both your company and your customers to strive for something bigger than themselves.
Loyalty answers three questions, according to Kane:
Do you make my life safer?
Do you make my life easier?
Do you make my life better?
Marketers who can answer, “Yes,” to those questions have a winning combination, but Kane cautions that there isn’t only one formula that will have all your customers responding positively. The key is to understand them so well that you can manage their experience and earn their trust in a relationship with you.
Read the full story, including infographics and video of the author, on AMA.org.