Article

Why customer loyalty isn't a 10-step process

Many have tried, but you can't develop a simple 10-step list for building loyalty. 

November 22, 2013

By Naomi Kasolowsky, Global Capability Director, dunnhumby

Thought leaders love to simplify their ideas into steps. And it's almost always done in 10 steps. You've seen them everywhere: "10 Steps to Sales Success," "10 Steps to Starting a Business," "10 Steps to Writing a 10 Steps Article"…I'll bet it's possible to create "10 Steps to Life" by defining key points between birth and death.

It’s different when the topic is building customer loyalty. Many have tried, but you can’t develop a simple 10 step list for building loyalty. People are far too complex, and businesses are so unique and full of opportunities that it’s impossible to uniformly apply 10 steps that will work for everyone.

Look at the brands and businesses that have built a base of loyal customers and you will see that there is really only one step. It is a deliberate commitment to putting customers first and being loyal to your customers, in every decision. Everything you do after that dictates the tone, approach, and type of transformation you will create within your business with this customer loyal mindset.

Think about a small, independent retailer you love to visit. Whether it sells food, clothing, toys or gifts, it’s probably not the store closest to where you live or work. You may have to go considerably out of your way to get there. It’s not likely to be the least expensive option either. In most cases, it will have a strong, clear, and very personal value proposition that surrounds you in every aspect of your experience with them. You feel they know you, know what you like, and deliver a great experience every time you come into contact with them.

That doesn’t mean that a customer loyalty approach only works for niche retailers or independents. It can be successfully modeled in all businesses and brands. Apple recently poached Angela Ahrendts, CEO of luxury clothing brand Burberry, for the newly created role of Senior Vice President of Retail and Online Stores. She executed her vision for Burberry on a central desire to create an interactive and highly personalized luxury experience in key growth markets. Every aspect of the customer experience was an extension of this positioning — personalized digital content, customized products, and the creation of Burberry World Live, which blurs the lines between channels, media, and content. Customers were clear about what to expect from the brand, and that’s exactly what Burberry delivered.

Discount grocers Lidl and Aldi are outperforming competitors in almost every market. Both retailers are completely transparent about what you will experience if you shop with them - low prices and a quality product. There is no dilution of this as you shop the store and consume the products. As a customer, you feel smart for getting the highest-rated product in the category for the lowest price. Isn’t that an experience you’d seek out often, and probably want to share with your friends?

Marketers often talk about taking customers on a journey from brand awareness, to preference, to loyalty and advocacy — a loyalty ladder of sorts. (This may explain the love of 10 Steps lists.) If loyalty is just a series of steps that incrementally contribute to a stronger feeling of love, why have so few retailers and brands managed to make their customers love them? True loyalty, on an emotional level, doesn’t work this way.

You can’t force or manipulate someone to fall in love with you. Customers have to want to love you because you created an experience that appealed to them more than any other. Many marketers think that they have done enough to capture customers’ attention and create experiences that grow loyalty. More often than not, they haven’t been as successful as they thought in consistently delivering an experience that customers actually value.

Many businesses have special programs designed to build loyalty, but they can’t see how much loyalty is lost in the execution. There can be a rather wide gap between what the brand promises to deliver and what customers actually experience. An accumulation of failed details that go unnoticed destroy loyalty. The clothing seams that come apart after one day of wear, the broken shopping carts outside a grocery store, the rude salesperson who couldn’t be bothered to show you where the mustard is, all leave negative experiences. It’s death by a thousand cuts. They all add up and influence where customers decide to spend their money in the future.

Most companies don’t understand the importance of these details and most couldn’t tell you which ones represent a tipping point for each customer. Understanding the customer experience is now just too complex to have a scientific way to evaluate the detail and the overview. These large companies put process and profitability before customers. This is where independent stores have an advantage. It’s easier for them to put the customer first since they can control more aspects of the experience and minimize the experience gap.

Even large companies can cultivate this loyalty. For example, IKEA was recently ranked #1 in dunnhumby’s Customer Centricity Index for housewares retailers. They have managed to deliver on their promise of “better everyday life,” giving customers sharp design at an affordable price. But they also create a fun showroom experience without showroom prices, and have started to reward loyal shoppers with extended benefits through their IKEA family program. The result: 8 percent comparable store sales growth over the past year.

But how many retailers would benefit from opening on-site cafes, for example? Clearly the business of loyal customer growth is a complex thing. Try to simplify it to 10 steps if you want, but the only step that matters is the first one: putting customers first. It’s also the only one you have to do perfectly every time.

(Photo by Gerry Thomasen.)