April is the month where you are to make a special effort to create more loyalty among customers. I’m not kidding, there’s a month dedicated to this. It seems strange that you only have to do this one month a year. Is there a month for being nice to your Mom or telling the truth? It would seem that what’s important in April would also be correct all year around.
Even Google didn’t seem to know who thought up this approach, but whoever it was probably understood that loyal customers buy more from you even without promotional offerings. They recommend you to others and they even give you a second chance if something goes wrong.
The question is how you achieve loyalty? Loyalty is a gut level thing rather than the transactional phenomena of satisfaction that many companies seek. You are loyal to your alma mater, your home town or some sports team and of course your dog. This is a long lasting thing that doesn’t go away quickly like the satisfaction you get from a good ice cream cone. Studies have shown that satisfaction doesn’t motivate people to buy, but loyalty does.
Our significant studies into loyalty show that it is developed through three elements. First, there does have to be a history of satisfactory transactions. If your broker doesn’t return you phone calls, or your store is out of stock on the items you want, or your bank charges you fees that are not justified in your mind there is little hope of loyalty. Businesses have to be good at what they do.
Secondly, loyalty occurs when the organization is unique in something important that they do. Nordstrom is unique in their focus on service. Wal-Mart is unique in their ability to deliver low prices. Loyalty is developed when some unique part of the company offering attracts you because it is an important differentiator for you.
Thirdly, there must be ongoing and effective communication between the organization and its customers or members. A conversation, sharing some important information or otherwise adding some value to the relationship all qualify as effective communications. Imagine that the only communication between you and your alumnae association was their request for funds. This would probably not make you want to contribute, but if they effectively reminded you about the wonderful campus days, the story might be different. That communication kindles the loyalty.
Organizations who focus on developing loyalty thrive even in tough economic times. Perhaps the focus on loyalty is why Southwest Airlines is the most profitable and fastest growing US airline while the others crank out their satisfaction surveys and add ancillary charges for just about everything. Maybe they will change now that it’s International Loyalty Month.
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