Recently, I walked into my Finnish mobile operator store and saw a power bank priced at €29, which had been campaigned for €10 the day before. I missed the campaign for just one day, but as a loyal customer of 17 years, I thought I could convince them to honor the special price. However, they refused, stating they couldn’t change the price. Initially, I was upset, as I thought it was not right.
Why am I loyal to them? Do I share their values? I realized I didn’t even know what their values were. Are they offering cheaper services than their competitors? Probably they don't. So what was the reason for staying with the company for 17 years, and why didn’t they offer me a special deal?
As a long-term customer, I believed my loyalty should have been recognized and rewarded. Over the years, I have consistently chosen their services over numerous competitors. This long-standing relationship, I felt, should have entitled me to a degree of flexibility or special consideration, especially for a minor request such as honoring a sale price from just a day earlier. My frustration stemmed from the expectation that loyal customers should be treated with a certain level of respect and appreciation, recognizing their contribution to the business's sustained success. The refusal to accommdate my request not only felt like a disregard for my loyalty but also contradicted the idea that businesses should prioritize long-term relationships over short-term profits.
But then, I began to reflect on my loyalty to the operator.
Why am I loyal to them? Do I share their values? I realized I didn’t even know what their values were. Are they offering cheaper services than their competitors? Probably they don't. So what was the reason for staying with the company for 17 years, and why didn’t they offer me a special deal?
I probably wouldn’t switch my operator because I am satisfied with the service - not with the customer service, though - but with the mobile service I pay for. It is priced about the same; everything works, and I don’t want to make any changes.
So why didn’t they value my loyalty? The truth is, despite my long-term patronage, I was just another customer to them. The salesman didn't see me as bringing more money compared to their other clients; instead, I expected lower prices out of loyalty, which meant our relationship was probably not worth investing in for them.
Contrary to that, my dear friend visited his tie merchant in London’s Burlington Arcade, hoping to replace his favorite tie after a mishap. He loved that tie, which perfectly matched his shirt and a meticulously tailored suit. The shopkeeper didn’t have the exact tie in stock but promised to check with the factory in Italy. If the factory couldn’t provide one, they would make a new tie specially for him. He didn’t demand a replacement; he intended to buy a new one, bringing more business to the shop. His loyalty was rewarded with exceptional customer service.
This brings us to the core of what drives true loyalty. People stay loyal to brands for various reasons that cater to their needs, desires, and motivations. Here are the key four reasons:
We value exclusive deals and rewards that loyalty offers in return. These benefits make us feel appreciated and rewarded, reinforcing our commitment to a brand. According to a 2020 study by Bond Brand Loyalty, 77% of consumers say loyalty programs make them more likely to continue doing business with brands.
The convenience of personalized service, faster checkout, free shipping, and other customer experience enhancements make it easier and more enjoyable for us to do business with the brand. Research by PwC shows that 73% of consumers point to customer experience as an important factor in their purchasing decisions.
The sense of belonging to a community of like-minded customers, along with the status and recognition received from higher tiers in the loyalty program, appeals to our ego and self-esteem. A study published in the Journal of Consumer Research highlights that consumers derive significant value from the social status provided by loyalty programs.
Emotional connection refers to our deep affection and attachment to the brand. This connection is built on positive experiences, brand affinity, and the emotional satisfaction we derive from interacting with the brand. It goes beyond rational benefits and taps into our feelings of loyalty and personal identification with the brand. Research from the Harvard Business Review shows that emotionally connected customers are more than twice as valuable as highly satisfied customers.
Reflecting on other businesses I am loyal to helps illustrate these points further:
A Fast Food Chain
The financial benefit of rewards based on my purchase frequency, like a free butterfly chicken, drives my loyalty. If they stopped offering rewards, I would likely switch to a competitor who would still do.
An Airline
The enhanced customer experience through fast track and priority boarding motivates me to fly with a certain airline despite the higher costs. Losing my airline status would likely shift my loyalty elsewhere, as happened with my previous preferred airline when I didn’t travel as much after the pandemic as before and lost all accumulated benefits.
A Sophisticated Wine Club
The sense of belonging and status drives my loyalty. I enjoy telling friends about it, even if I do not go there often and do not spend extra money there.
A Boat Rental Company
They don’t give me “free chicken,” I don’t get access to lounges, nor do they have a 5000-wines wine list. But I've been loyal for five years and keep telling all my friends about my experiences, acting as a brand advocate. Why? My loyalty lies here due to the emotional connection. Despite high costs and low boat availability during high season, my love for the sea, the experience of driving a boat, and the quality time with my friends and family keep me loyal. The emotional satisfaction far outweighs the tangible benefits.
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When businesses invest in understanding and nurturing different types of loyalty -whether driven by financial benefits, enhanced experiences, a sense of belonging, or emotional connections - they create a powerful foundation for long-term success and advocacy.
All types of loyalty are vital for the sustained success of a business. However, marketers, like the Zen Master from the tale of the Artist and the Emperor in the 'Art of After-Sales Marketing Book', must immerse themselves in their customers’ journeys to understand the true drivers of loyalty. Tailoring After-Sales Marketing communications to align with these factors can significantly enhance customer retention and brand advocacy.
When businesses invest in understanding and nurturing different types of loyalty - whether driven by financial benefits, enhanced experiences, a sense of belonging, or emotional connections - they create a powerful foundation for long-term success and advocacy. The goal is to build relationships beyond financial incentives and convenience. True loyalty is rooted in a deep emotional connection that fosters a sense of belonging and attachment, making it the cornerstone of lasting loyalty. This emotional bond transforms satisfied customers into ultimate brand advocates.
To truly master these techniques and turn your loyal customers into brand advocates, sign up for our in-depth Sales Accelerator course, "Boosting Growth Through Customer Loyalty and Retention."