A lot of money is spent by marketers in campaigns and efforts to market products and services to customers. The primary objective of most marketing effort is to gain customer loyalty. Several analyses on customer loyalty of customers both within and outside the United States abound. For instance, statistics show that 84% of U.S. adults are loyal to their retailers while 82% are loyal to their brands. However, it appears that customer loyalty is somewhat overrated.
Why Companies need Customer Loyalty
Customer loyalty determines the brand a customer sticks to or favors in a competitive market. Firms strive to increase their customer loyalty because of the benefits associated with it.
- Customer loyalty can offer a firm the benefit of a bigger profit. However, this is usually a long term benefit.
- Customers are more than willing to promote a brand or product for free once they become loyal to the brand.
- Firms only require little or no efforts to make their existing customers loyal than they do to find new customers.
Excessive Emphasis on Customer Loyalty
The excessive emphasis firms place on customer loyalty seems to be misplaced. There is a clamor among firms to delight their customers due to the popular belief that delighted customers will always patronize the brand and remain loyal to it. However, this is not entirely true. Studies show that delighting customers does not build loyalty; however, customer loyalty is actually built by reducing customer’s efforts.
For instance, customers do not always go for airlines that offer the best services but they are quick to refute those that offer poor services. Customers’ loyalty is gained when firms reduce the work customers have to do in order to get their problems solved.
In addition, customers are prone to making automatic purchase decisions. Most customers would rather purchase easy-to-buy products and also familiar products. The concept of easy-to-buy products has been discussed above and includes products or services that reduce the efforts customers have to exert to obtain them. Once a customer has purchased a product or service and is satisfied with it, he is more prone to purchase that product or service again and less prone to purchasing competitive products and services.
Facebook is a good example of a company that has leveraged the concept of familiarity in becoming a notable brand and the most addictive social network in the world today. Moreover, the idea of comfort and ease-of-use is also employed in the social network. Users who have become familiar with a product will consciously and unconsciously patronize that product.
In conclusion, customer loyalty is not actually what drives sales, familiarity and ease-of-use do. Moreover, the emphasis on making customers to delight on a product or service is highly misplaced. Making customers delighted with a product or service does not make them loyal to the product or service. Firms can improve their sales and profit by devising effective means to remove obstacles in accessing or purchasing their products or services and make their brands familiar to their customers.