The myth of customer loyalty

Jun 17, 2024 |3 min read
Lots of hearts to represent customer loyalty

Our clients often ask us about how best to retain and build customer loyalty – the wonderful relationship that some customers have with a brand that keeps them coming back again and again. Building that bond between brand and consumer that means they’ll stick with you through thick and thin. Because that’s what loyalty means… right?

Well yes and no. ‘Loyalty’ implies a commitment, longevity, a sense of duty, and permanence to the relationship. We’re most likely to describe someone as ‘loyal’ when that loyalty is tested, like taking a friend’s side in an argument when they’re wrong; standing by someone when others would turn away; a pet dog who stays by your side no matter what.

 

But this is where the concept of customer loyalty falls apart.

This might work as a descriptor for human relationships, but not for brands.

As researchers, we need to know exactly how loyalty is defined in your business in order to identify and help grow this group. It’s usually one of the following:

I’ve never heard a business refer to their loyal customers as those who stuck with them when they had that really tough year, supply chain issues, or a period of terrible PR!

And that’s because your customers won’t stand by you if you’re letting them down. They might accept one or two instances of poor service, but that’s not down to loyalty, it’s down to experience. If they know that 99% of the time you get it right, then the chances are it will be right next time. They’re making a very practical judgement call.

Your customers’ relationship with you is transactional. Looking at the definitions above, then at best it’s habitual – frequent recurring purchases that they don’t question or consider alternatives for. But that’s not loyalty, it’s a habit.

Yes there are some people that really love certain brands, that will shout from the rooftops about how great they are but the reality is that:

  1. These relationships are VERY few and far between (think about how many brands you interact with, vs how many you would really shout about)
  2. This love is actually quite precarious.

I will happily declare that Heinz ketchup is better than any other brand. I will only buy Heinz ketchup, I’m not even a ‘considerer’ of any other brands, it’s Heinz or nothing for me. But what if they changed the recipe? What if it started tasting noticeably different? The foundations of my brand love would be shaken, and my ‘loyalty’ could be quickly eroded. I wouldn’t stand by them and buy a product I thought tasted worse than another brand. I’d start experimenting with competitors, and might find a new love. My relationship with Heinz is entirely dependent on them continuing to hold up their end of the deal (i.e. providing the ketchup that I know and love), and if they’re not meeting my expectations that ‘relationship’ will start to wobble.

 

Does your brand have great ‘customer loyalty’? Do you have a group of die-hard customers who love you? Congratulations! But it isn’t because they feel loyal, it’s because you’re meeting a need. If they really love you, then it’s probably a need that nobody else is meeting. But it’s not loyalty. And that’s fine. That doesn’t undermine your achievement or your success. Meeting customer needs is hard! And if they love you, then you’re clearly doing it far better than your competitors. But their love is transactional, and if you stop meeting that need, they’ll stop loving you. The ‘loyalty’ will end.