Customer Loyalty Versus Customer Value
by Michael Greenberg | COO
Many companies equate customer loyalty with customer value. It isn’t difficult to see why, since value is easy to measure and loyalty is much more difficult. But often we see companies take this concept too far and focus all of their retention efforts on pure frequency or retention increases. A longer term approach is to balance investment in value creation and loyalty development.
Some people say loyalty can’t be bought. This isn’t quite true – its just an incomplete picture. Some portion of your customers allow their loyalty to be driven by financial considerations. Others respond to your brand promise and attributes with a more emotional attachment. Others are loyal since they don’t have alternatives. And others are loyal because they haven’t looked for alternatives.
While the objectives of customer loyalty development are the same as value creation (retention, frequency, and advocacy), the strategies and tactics are often different. Customer experience takes a larger role, frontline staff training becomes very important, social technologies become far more useful, and message tone has an impact. Consistency of message compounds as customers become more familiar with the brand promise and see it in action with every interaction.
We’ll be looking at all of these elements over the coming months and how developing customer loyalty impacts customer value.
