Is Customer Loyalty Really Dead?

Adweek's Lisa Lacy recently wrote "there is no brand loyalty beyond obsessed superfans," and said the pandemic laid that truth bare as consumers readily switched brands and channels in an instant as the pandemic demanded.

Customer loyalty has long been a buzzword in the world of business. It's the holy grail of marketing, the ultimate goal that brands strive to achieve. But are customers really loyal in today's world of endless choices and instant gratification? And how should brands treat customer loyalty in order to build lasting relationships with their customers?

During a one-on-one discussion on the subject, Karthi Kumar Marshan ?? , former CMO of Kotak Mahindra Group, expressed that it's time for brands to recognize that loyalty is a myth. Customers are in a constant state of "50 first dates" with brands. In both life and brand interactions, humans are inherently predisposed to seeking variety, and it is social norms created for property protection that compel us to stay "loyal." Therefore, what brands should aim for and strive towards is earning and maintaining continued engagement with their customers. Similar to dating, it's important to bring your best and authentic self to each interaction with a customer, while also adding an element of novelty to keep them engaged over time.

Anand Bhatia , the CMO at Fino Payments bank, also acknowledges that achieving customer loyalty can be a difficult task. He points out that with customers having more options than ever before, they are more likely to switch brands if they are not satisfied with the current one. Bhatia believes that the mindset of owning the customer (a concept popularized by Citi in the early 2000s through the idea of the "financial supermarket") can hinder collaboration. He recommends an elegant solution that involves collaborating with complementary brands. This approach may require acting as a conduit at times (with lower margins) but it works better in the long run.

Despite the challenges, both Marshan and Bhatia agree that customer loyalty is still present in today's world. Customers may not remain loyal to a brand solely based on longevity, but they remain loyal to brands that consistently deliver the desired results as per their expectations.

How brands should treat customer loyalty

Distinguish between loyalty and habit: Product marketing managers can get confused between brand loyalty and habit because the two concepts can often produce similar outcomes like repeat purchases. For example, a consumer may repeatedly purchase a particular brand of toothpaste because it is a habit or simply because they are loyal to the brand due to its quality or reputation.

Not every product category may garner loyalty: Certain products are bought regularly, but they lack an emotional connection with the consumer, particularly commoditized products. Additionally, limited brand loyalty may exist where the consumer oscillates between one or two brands while making a purchase.

Know your “job to be done” well - This concept emphasizes that customers "hire" a product or service to fulfil a specific need or desire. By creating products and services that cater to the specific job customers are trying to accomplish, businesses can offer personalized and relevant experiences. This leads to greater customer satisfaction and can increase customer loyalty.

Reward Loyalty: Consider this as a hack of sorts. Customers love feeling appreciated, and one of the best ways to show them you value their commitment is by offering rewards. This could be in the form of loyalty programs, discounts, or exclusive offers.

Build Relationships: Remember, loyalty is all about building relationships. Invest time in understanding your customers, their preferences, and needs. Offer personalized experiences that make them feel valued, and foster strong relationships that promote loyalty.

In today's world, customer loyalty is earned through providing value, transparency, and rewarding loyalty. Building strong relationships with customers and listening to their feedback is crucial for tailoring products and services to meet their needs and in turn, getting closer to achieving their loyalty.

I would love to hear your perspective on this. Do you think there are other approaches that could be employed to bolster customer loyalty??