Working on a customer loyalty project back in the 90s, one of our clients said, “The problem with loyal customers is that they are loyal until they aren’t anymore.” His point was that customer loyalty really doesn’t exist, and he was right. Loyalty connotes a feeling of devotion, fidelity, and that’s simply way too much to expect from customers, because it means, in essence, “no matter what you do, I’m with you, through thick and thin.”
Think about it: who would you stick with no matter what, through thick and thin?1 Your list certainly wouldn’t include any brands you do business with. If the performance of those brands even to which you are most committed lapses below a certain threshold, you’re gone.
“Committed” is a key word in that last sentence. Loyal customers may be too much to hope for and work toward, but committed customers are precisely what brands should work toward maximizing. And there’s a specific idea on the topic of commitment that we came across recently while browsing the new non-fiction shelf at Barnes & Noble, in a book seemingly unrelated to the world of business.2 Turns out the book is actually a kind of self-help book for marriage, personal relationships, and career, but the basic concept feels directly transferable to the world of business. It offers a “Customer Commitment Equation”3 that we see as directly applicable to the world of business:
Level of satisfaction: The extent to which product/service likes outweigh dislikes. The more the likes outweigh the dislikes, the more committed the customer; the more the dislikes outweigh the likes, the less committed the customer.
Quality of alternatives: The extent to which the customer sees viable options to his/her current product/service provider. The less attractive the options in the customer’s eyes, the stronger the customer’s commitment; the more attractive the options in the customer’s eyes, the weaker the customer’s commitment.
Level of investment: What (and how much) the customer has to lose if he/she walks away. The more invested the customer is in the product/service, the more committed the customer is; the less invested, the less committed. For example, the more time a customer has spent with a product or service, the more comfortable (i.e., invested) he/she is likely to be; likewise, the more the customer has been able to customize his/her experience with the product/service, the more invested he/she will be, etc.
Each of these three factors independently affects the level of customer commitment, but they interact as well. Perceived lack of attractive alternatives can overcome dissatisfaction. Being highly invested in a product/service can overcome attractive alternatives, and even dissatisfaction.
While they act independently, taken together these three factors act especially powerfully to strengthen or weaken customer commitment. To the extent a brand can satisfy customers, offer products/services that weaken competitive alternatives in the eyes of customers, and create ways to keep customers invested in the product/service, that brand will have more committed customers than any competitor—and highly satisfied, invested customers who see no attractive alternative are obviously pure gold.
So forget about customer loyalty—it’s not worth chasing what doesn’t and can’t exist. But a focus on customer commitment—how to strengthen it and how to measure your brand’s level of commitment against your competitors—is definitely worth the time and effort.
This is a topic we plan to explore further—both conceptually and empirically, and so we would love to hear your thoughts on it, in particular how this “Commitment Equation” might apply (or not apply) to your brand.
1 Well, I do admit to exceptions, but precious few. For example, I am a true loyalist when it comes to the Red Sox, Patriots, Celtics, and Bruins. No matter how much they may disappoint me, I remain a loyal fan. The fact is, sports teams might be the only brand exception to the “brand loyalty doesn’t exist” rule.
2 See Heidi Reeder, “Commit to Win: How to Harness the Four Elements of Commitment to Reach Your Goals,” Penguin Group, NY, 2014.
3 Ibid, p. 41.