The commitment equation (forget customer loyalty)

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. 

  • For example, I am not at all satisfied with my go-to airline, and there are definitely other airlines I would much rather fly; but I am so invested in this airline’s frequent flyer program that I’ve become a longtime, highly committed customer.  [NOTE, RELATED TO NET PROMOTER (NPS):  Would I recommend my airline?  Not a chance.  But because I’m so invested in it, I’m fully committed nonetheless.]

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.

What’s love got to do with it?

I wonder if you would be willing to offer me some recommendations having to do with the following:  for my Fall 2014 senior level/graduate level course in sports marketing at the University of New Hampshire, the putative topic will be “development and promotion of a popular recreational sport” (the sport is tennis).  But the real focus will be on love, and specifically “the stages of a tennis love affair.” 

The idea for this course grew out of research we did many years ago for the NBA and also for Major League Baseball (and NBC Sports).  The NBA work ultimately led to the tagline, “I love this game.”  The MLB work underpinned NBC’s (at the time) promotion of its MLB telecasts. 

The Fall course will include readings on research methods and the application of those methods:  interviews with people who have just fallen in love with tennis, all the way up to people who have been in love with tennis for a very long time (and people who have fallen out of love with the game), answering the questions:  What makes people fall in love with tennis?  What makes them stay in love with tennis?  What causes one to fall out of love with the game?

The course will also include readings on advertising and promotion.  My tentative plan is to use parts of the following books:  Lovemarks:  The Future Beyond Brands (by Kevin Roberts) and The Little Blue Book of Advertising:  52 Small Ideas That Can Make a Big Difference (by Steve Lance and Jeff Woll).  If you have a recommendation for books or articles that you think would be valuable for me to consider including, I would greatly appreciate it.

The course will also include fictional and nonfictional (and philosophical) readings on love.  I’m considering Alain de Bottom’s novel, On Love (about the thrills and pitfalls of romantic love), along with Irving Singer’s Philosophy of Love:  A Partial Summing Up (a brief overview of his monumental trilogy, The Nature of Love), and Erich Fromm’s classic, The Art of LovingAgain, if you have a recommendation for books and/or articles on the nature of love itself, I would love hearing them. 

Finally, each week students will be assigned to bring in for discussion the following (rotating who brings in what across the ~15 students over the course of 14 weeks of classes):

  • An ad (TV, radio, print, web, etc.) that particularly grabs their attention
  • A song about love
  • A poem about love
  • A pithy quote about love
  • A photo depicting love
  • 3 words associated with love

I also plan to bring in one of each of the above every week.  And so, now, really and truly finally, if you have song(s) or poem(s) or pithy quote(s) or photo(s) or words about love (no holds barred), please send me them?  I would greatly appreciate help in building up materials for this course.

I don’t want to be presumptuous, but in the hopes that you do give me some recommendations—thanks very much in advance.  I’m pretty excited about this, and more than a little anxious.  I figure this course (like love itself) could be a huge success, or it could be an abject failure.  But it seems to me it’s worth going for, because I’d like to suggest:  All you really need is love.

Acting . . . and focus group moderating (Have a ‘warm heart and a cool mind’)

Posted: January 9, 2014

I recently came across an old book on the craft of acting*, not because I’m thinking of auditioning in the near future (needless perhaps to say), but because I had been wondering about possible clues for the craft of focus group moderating.  The book talks about both physical and psychological keys to effective acting:

Psychological qualities in acting:

(1) Understanding:  Intelligence makes the actor perceive things properly and regulates the sensibilities.
(2) Sensibilities:  Emotional awareness allows the actor to perform with feeling, and animates, enlivens, inspires the understanding.  
(3) Spirit:  Having a kind of fire and lively imagination (but not blustering) produces the living character in the actor.

Physical expression in acting: 

  • Use of one’s body
  • Use of one’s voice
  • How one looks

It seems to me that effective focus group moderating requires the very same psychological qualities and physical expressions that are so important in acting.

Psychological qualities in moderating:

(1) Understanding:  Intelligence makes the moderator perceive things properly and regulates the sensibilities.

  • A firm grasp of the study objectives is necessary to come away from the groups with the business questions answered.
  • Being quick on one’s intellectual feet is required to probe when probing is needed and let go and move on when it’s not.
  • Deep experience in the art, as well as the topic at hand, enhances the understanding:  the more you see, the more you know; the more you know, the more you see.

(2) Sensibilities:  Emotional awareness allows the moderator to perform with feeling, and animates, enlivens, inspires the understanding.

  • Developing a rapport with all respondents in the room, making them feel comfortable about opening up and speaking freely and candidly on the topic at hand, is essential for teasing out the kind of insights that separate great from mediocre project learning.
  • The best moderators walk a very fine line between “relating” and “distancing”—that is, between connecting emotionally with the group, yet maintaining the emotional detachment necessary to effectively manage the flow of the discussion.

(3) Spirit:  Having a kind of fire and lively imagination (but not blustering) produces the living embodiment of the moderator.

  • The best moderators have the kind of energy that keeps respondents (and observers too) fully engaged in the process.
  • I’ve never believed in staying seated as a moderator (perhaps because I’ve never been able to).  When the group energy feels like it’s sagging, I get up and walk around the table; I sit in an empty seat for awhile; I kneel on one knee at the far end of the table; I find myself sitting on a credenza against the wall.

As moderators, our physical expression (how we use our bodies, our voice, and the way we look—how we dress, our facial expressions) acts in support of our psychological qualities to manage a group, to connect with participants, to elicit the insights needed.

Joseph Jefferson (famous 19th-century American actor) called the combination of understanding, sensibilities, and spirit, supported by physical expression in acting, as having a “warm heart and a cool mind.”  The same goes for focus group moderating.  The best moderators genuinely care about and enjoy their respondents (warm heart), and are at the same time relentlessly curious about what their respondents think, how they feel, and why they behave the way they do (cool mind).

Further (and finally), it’s no stretch to say that, like actors, moderators too have an audience—client observers and colleagues behind the glass and/or watching remotely—who count on us to educate, edify, and entertain.

*Acting:  A Handbook of the Stanislavski Method, compiled by Toby Cole, Three Rivers Press, 1947

Ubiquity is, well, everywhere

Posted: September 26, 2013

Five years of research for the music industry led us here at Taylor increasingly to the conclusion that the primary cause of the industry’s woes could be explained simply by the term ubiquity.  So much “free” music became so readily available from so many sources, that two things happened:  (a) more and more consumers began to say, “Why buy when I can acquire whatever music I want for free?” and (b) increasingly, music became less “dear” to consumers—held less value in their minds.  People continued to love music, no question about that, and they still consumed tons of music—maybe more than ever; but because it became so available for free everywhere they turned, they stopped buying the music they love.  Why should they?  They didn’t have to.  

Over time, more and more consumers listened to music from an ever wider variety of “free” sources (legal and illegal), and the heaviest  “wide-variety-of-sources” users, over time, purchased less and less music compared with the market as a whole.  As music lovers, such consumers continued to purchase more music than other consumers, but their rate of decline in purchasing over time became significantly greater than that of the average consumer.  Moreover, the perceived “value” of music to consumers ticked down slowly but steadily, quarter-by-quarter over that five-year period.

It turns out the music industry isn’t alone in the deleterious effects of ubiquity.  Pay-TV service (cable, satellite, phone company TV), consumer electronics, movies, and apparel are examples of other afflicted industries.  Too much choice gets in the way of the provider’s value proposition in the eyes of consumers. 

Here’s some evidence of the point in a number of categories:

On consumer electronics shopping (from an article titled, “Shopping For Electronics Is A Drag”):
“Despite falling prices and the increasingly consolidated retail space, consumers still despise shopping for consumer electronics. . . .  The process [is] more complicated than it needs to be. . . .  The selection at most stores remains almost mindboggling, with products and models from a range of companies offering almost too much choice for buyers.  Most shoppers . . . walk into the average CE retailer worried that they’ll buy the wrong thing or end up paying too much.”

On movie watching (quoting Siva Vaidhyanathan, UVA professor of media studies):
“It’s a paradox of abundance.  If people aren’t pressured to see a movie in a specific timeframe, viewers tend to put it lower on their priority list.  When you have every choice in front of you, you have less urgency about any particular choice.”

On jeans buying (from The Paradox of Choice by Barry Schwartz):
“‘I want a pair of regular jeans,’ I said.  ‘Do you want them slim fit, easy fit, relaxed fit, baggy, or extra baggy,’ the sales woman replied.  ‘Do you want them stone-washed, acid-washed, or distressed?  Do you want them button-fly or zipper-fly?’  I was stunned.  The trouble was that with all these options I was no longer sure WHAT I wanted.  Increased choice brings autonomy and control, but as the number of choices continues to grow, so do the negatives.  Beyond a certain point the negatives escalate until we become overloaded.  Choice no longer liberates; it debilitates.” 

On pay-TV service (from our work for leading firms in the industry):
The growing availability of video content online; the growth of services like Netflix, HuluPlus, Apple TV, etc.; and the availability of video-on-demand are surely eroding pay-TV service offerings—and are likely to continue to do so.

And then there’s my personal favorite example—the disastrous effect of “ubiquity” in hunting.  [NOTE:  I have never in my life hunted; I just love the book this notion comes from:  “Meditations on Hunting,” by the great Spanish philosopher, Jose Ortega y Gasset]
“It’s essential that the desired animal is uncommon.  If it were everywhere there would be no question of not running into it.  If it is unnecessary to look for it because it is always at hand, in inexhaustible supply, one does not worry about success in killing it.  If the first blow fails, it is all the same; another animal is right at hand to receive a second aggression, and so on indefinitely.” 

The point:
In any category one can think of, so much choice so readily available from so many sources has a ruinous effect on one’s value proposition and affects consumers’ purchase decisions (and kills the fun if you’re a hunter).  Ubiquity of choice in any given category makes the product (or service) less “dear” or more confusing (or both).  Scarcity, which of course is the opposite of ubiquity, creates “value” in people’s minds.  When something of reasonable value is relatively scarce, its perceived value is heightened; when something of value is available everywhere you turn in seemingly unlimited choice, its perceived value is diminished, and is at risk of being destroyed.