What Price Customer Loyalty? As You Sow, So Shall You Reap….

Customer loyalty is a very interesting concept.

Customer loyalty can be earned, and bought.

But is it ever owned?

For an organisation, for a business, there will always be a point, a tipping point, where customers will begin to question the value that they receive for their loyalty.

Customer loyalty can be bought, and earned.

And it can be lost.

Lost in an instance.

Or lost over a series of events.

A good dental friend of mine talks about the triangle of business.

The three points of the triangle are:

• Quality
• Service
• Price

He says no business can provide all three.

He says one always has to be surrendered.

If a customer or client wants great quality and great service, there will be a price.

If a customer is willing to sacrifice service, or quality, then the fee, or price can be lowered, usually.

Similarly, for a business, a reduction in their fees and prices will result in a reduction in their profits and margins. For the business to maintain a viability, it must then look at a reduction in the level of service it provides, which costs, and/or a reduction in the quality of products it offers.

The cost of service is reflective in the number of staff employed to provide the service, as well as their experience, and also their levels of specialized trainings and ongoing trainings.

Costs of products is easy. Businesses can source less expensive, lower quality alternatives. They can also try to “extend” the life of certain replaceable items they use in their business.

Or businesses can cut the item from its use in that business.

But there’ll be a time when loyal customers will notice.

And when they notice, those businesses had better be prepared for a loss of clientele, because those loyal customers will walk, and take their business elsewhere.

So think wisely, if you are in business, as to whether your clientele will notice your changes.

Your cost cutting changes.

Here are some examples:

Airline loyalty programmes.

Accruing points and miles is an absolutely useless and pointless exercise if the redemption of those miles is a painful and unpleasant and insulting process for the loyal customer.

In my mind, the points and miles have been earned and purchased and paid for.

With previous flights.

Airlines need to show Frequent Flyer Miles in their Balance Sheets.

Booking airline flights with points should be just as easy as booking paid flights.

After all, the miles, or points, have already been paid for.

But when one airline views its flights booked by points as an encumbrance, or burden, it really shows when it stacks up against another airline that welcomes points purchases, and looks at these purchases as an opportunity to sometimes acquire a customer.

Recently I had great difficulty booking flights well in advance with my regular airline. They offered me long routed, multi stop itineraries.

With very limited options.

Fortunately, another airline, which I had not ever used, *yet*, welcomed my points and miles. With several options and direct routes.

The difference was chalk and cheese.

Sadly, in the real world, my first choice airline is doing it tough.

And it’s starting to show.

Paper towels instead of cloth towels.

Packets of chips instead of warm prepared snacks on overnight long haul flights.

Even my old favourite, the hot towel was missing on this recent flight…

And it’s this decrease in quality, and reduction and stretching of services, that’s causing me to question the value of my loyalty to them.

I’m looking forward to seeing the level of service I receive on my reward flights with my new carrier….

Now I’m a long-term frequent flyer of considerable status with the “old” carrier.

But I’m thinking, well it’s about time….

Restaurants.

We’ve all been to restaurants where the service is bad.

But what do you do when it’s one of your favourite regular places?

Sometimes the variance in service can purely be due to an “off day”.

But an off day is not what customers want.

Customers expect *best* every time.

So what do you do if that happens to you?

Many customers will take their business and patronage elsewhere after being the recipient of only one off day.

Other customers will give the restaurant another chance.

But where do you draw the line?

Is the lesser customer experience due to one team member, and is it their attitude, their skill, or their level of preparation that lowers the customer experience?

Or is the lesser customer experience a result of a directive from management or ownership, which is then filtering down to the front line?

In this case, the staff and employees are merely pawns in the game being played by management. And so it’s not really the fault of the staff.

But they have to bear the brunt. The brunt of complaint or question about policy.

A good customer will recognise the difference when their expectations are not met.

Whether the customer chooses to accommodate those differences, or reject them as being unacceptable, well that’s the gamble that businesses take every day.

And not just restaurants.

Dentistry.

In dentistry, your loyal patients will know when your Office starts cutting corners.

Your customers will know when your quality of materials and purchases is reduced.

Your loyal clients will know when your new staff are under-trained in customer service.

Sure, in any business or profession, staff with bad attitudes can drive loyal customers away from great businesses.

Likewise, policy, and change of policy, can drive loyal customers away from great businesses with great staff.

Yes. I know. Businesses do need to make a profit.

Without profit there is no business.

But what profit? And how much profit?

All economies are cyclical.

Sometimes profit forecasts need to be tempered during tougher times.

In farming, you sow and you harvest and you reap. You cannot reap every season.

If you plant inferior seed, you will reap inferior crop.

If you plant good seed, but tender it poorly, your amount of reap will be lowered.

If you employ poorly trained and lazy farm hands, your yield will suffer.

Good seed, good farmhands, good tender, yields good harvest.

Invest in the seed, invest in the labour, invest in the equipment.

And you shall reap loyal customers who want your produce.

In farming, if you cut corners, you do so at your own peril.

In all business, it’s the same….

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