Is Customer Loyalty a Myth?

We talk and measure customer loyalty, that sentiment that keeps customers buying from their favorite brands. But in an age when every customer with a smartphone has the ability to instantly price compare (and they do so standing in your store), read and write reviews, and be offered competitive offers instantly once they click on a product - does customer loyalty truly exist?

Loyal, as defined by the Merriam-Webster dictionary means "unswerving in allegiance." How many brands would consider any customer to be unswerving in allegiance? Exactly. None! Smart brands know that customers go where they find the conditions that best suit their needs, budget, mood and situation in the present moment. And now, with more choices than ever (brick-and-mortar, ecommerce, private individuals on Etsy and eBay, even Facebook has added ecommerce directly into their platform) - brands are faced with one glaring question: if the playing field has leveled, how do you actually compete?

The ability to search for better deals and more information via mobile devices has made today's shopper more finicky than ever before, as these stats from National Retail Federation demonstrate:
• 63% of US-based Web buyers find better deals online
• 75% of consumers use their mobile phone in store to search for better deals
• 46% of GenX & Millennials use their mobile phone in store to request a price match
• >64% of GenX & Millennials use their mobile phone in store to look up product reviews

"Daniel's Market Reality"
Brands are accustomed to an ingrained customer journey: awareness, consideration, purchase. Omnichannel shopping has changed the customer journey, so that shoppers maneuver among the phases in a non-linear pattern. Take for example, my son, Daniel. He's 13 and a DJ. Recently, he wanted me to purchase a new mixer. It cost a lot of money. So, I told him to convince me why he should buy that particular model. Daniel did what most shoppers do today. He checked out reviews online, read forums and communities, compared various brands and models, compared shipping prices, time to ship, the availability in local stores, return policies, and watched YouTube videos that showed the mixer in action and what other DJs thought about it. This was the "market reality" he used to determine that the mixer he wanted was indeed of the value and quality he needed, and then he found the retailer that made the best offer in price, shipping, return and support. Not bad for just a kid! (Daniel and his mixer also did a great job at our recent company picnic, by the way.)

But guess what? Customer loyalty didn't play into my son's decision at all. The retailer did exactly what they said they'd do, the item was shipped and arrived on time, the mixer works great and my son will most likely buy from them again, UNLESS... and this is the big "aha" here... his preferences change for his next DJ equipment purchase and if the peer reviews and YouTube videos do not convince him that the brand (and retailer) he just purchased from are the best for his next purchase.

Customer loyalty is not something you earn once and keep forever. There is no "unswerving allegiance" among buyers. There is a short span of loyalty from the time of last purchase to the next time they shop and consider your brand. They will choose a different brand if they get a better deal and the peer reviews persuade them. I know, it's a bit strange to hear the CEO of a company who helps brands build loyalty say this, but the reason I do is because brands need to understand that loyalty is a feeling. Feelings change. Customers are just as likely to buy from you for lack of a better alternative in the moment they want to buy as they are from past positive brand experience with you. Simply put, your customers are not loyal to YOU. They are loyal to their preferences. So, in the sea of options, how do you really compete?

An Island in the Brand Sea
You make your brand more than a place that meets their preferences. You make it a place they belong. In the Brand Sea, where every shopper looking for the products and services you offer is on their own raft, you become an island. A place where they find peers who have similar preferences, additional knowledge and experts, too. You become an island with your own branded, on-domain entity and on this island you build a Community. Now, when people pull up onshore (i.e., enter their name and email address to opt-in to your community), they find themselves in a place that makes them feel welcome, celebrates their presence, answers their questions with trusted content, meets their needs and makes them feel valued.

Now you have created something that you can compete with. Why? Because you have engaged their need to belong by bringing them into a group where they find people they can trust and share information with. Trust and sharing create cohesion. When people feel they belong in a group they trust, they naturally stay with that group. Going to your brand becomes not just a matter of preference, but routine because they belong to your brand and they know they will find the support they need in their buyer's journey.

In the sample of my son, if the brand or retailer he purchased from had invited him into a community where he could converse with other DJs, have his questions answered, receive discounts and great deals, and learn more about being a becoming a better DJ - that would have created a sense of loyalty. And you can be sure that he would be more likely to purchase from that brand or retailer again.

I'm not saying you can let up on creating a consistent positive customer experience at every touchpoint a customer has with your brand - no, no, and no. But where one bad experience with a rude employee may easily convince a non-community member to never buy from you again, that same bad experience would most likely send a community member to your forum or your twitter handle where they would give you the chance to make things right. And in this day and age, what you are really competing for is a chance.