The Loyalty Factor

Are they loyal to you personally or loyal to the company?  Customer loyalty is one of the “must-haves” for any business. From the executive suite to the sales team to the call center, the drill is often the same: Engage customers enough to make them loyal to our product.  But what happens when those employees succeed a little too well — when the customer ends up being loyal more to the salesperson than to the products and services offered by the company itself?  It happens more often that one might think, according to a study, Customer Loyalty to Whom? Managing the Benefits and Risks of Salesperson-Owned Loyalty, conducted by a team of marketing professors and recently published in the Journal of Marketing Research.

“I had been concerned with some loyalty and satisfaction measures that are often taken that assured that sales were being made based on customer loyalty to companies,” says the report’s coauthor, Lisa K. Scheer, the Emma S. Hibbs Distinguished Professor and associate professor of marketing in the University of Missouri College of Business. “But my own personal observation and belief was that it was not so much at the company level.”

Loyalty to the Person

“If you are a woman and you regularly go to a particular hair salon, you might describe yourself as ‘very loyal’ to that salon,” Scheer continues, “but the fact of the matter is that your stylist happens to work at that salon, and if she moves to another salon, you will probably follow her.”

True Loyalty is About What?

“True loyalty is ultimately about a relationship,” says Lisa Bradner, senior analyst at Forrester Research.  “And it is easier to build a relationship with someone than it is with something. I may be loyal to Starbucks but part of it comes from the way the servers act towards me. Human interactions can reinforce a brand.”

Bradner suggests that companies institutionalize behaviors. “Starbucks has a huge employee training program, where they invest heavily to make sure it’s a very positive experience. And yes you may love your barista, but if she leaves, the next one is going to be equally warm and friendly.”

It’s about Mind Share

Luc Bondar, vice president, global loyalty at Carlson Marketing, says companies should encourage their staff to build those strong relationships with customers — and then work to replicate it.  “Once you’ve identified ‘good salespeople,’ those who go above and beyond, you need to place them with your high- value customers as soon as possible, he says. “But then you should rotate them out into dealing with the lower tier of customers, so that they can teach others the same principles, before rotating them back.”

“Understanding what it is that makes a particular employee so attractive to customers is key to being able to replicate that behavior throughout an organization,“ Bondar says. “It is not an easy step, and it is not something you can accomplish with a short-term approach. The last thing you want to do is to tell an employee, ‘Be more like Mike.’ There are all sorts of nuances to consider.”

“It’s all about taking the best qualities of ‘Harry’ and replicating them in your organization,” Bradner affirms, “so that if or when Harry leaves, there’s not a gaping hole to be filled.”

Excellent book about building Customer Loyalty:  Loyalty Rules: How Today’s Leaders Build Lasting Relationships

What causes your customers to be loyal?  Is it your company, your products, one specific sales person or your company’s excellent service?  Post your comments below.  I would love to hear from you.