There have
been a number of articles written regarding loyalty as if it were a
black-and-white topic. The authors have made loyalty appear to be a term
something like pregnancy. You're either pregnant or you're not. This kind of
writing is not correct and is confusing, at the very least. Companies are looking for
loyal customers, as if there is only one kind of loyal customer. We think it is
time to address this issue of loyalty.
Can I be
loyal to company without giving it all my business? Of course I can. Many
companies are loyal to a given set of suppliers. Just because I go to a specific restaurant, can
I still be a loyal patron and frequent other restaurants? Because I buy a particular brand of shoes, do
I have to buy all my shoes with that brand in order to be loyal?
The obvious
answer to the above questions is that customers can be loyal to companies or businesses
without giving them all their business. I can be loyal to a company by giving
them most of my business. I can be loyal to company by giving them some of my
business. Let's look at a few examples of loyalty. In each of the four following ten purchasing sequences
I am loyal to company A.
1. A A A A A A A A A A (all 10 purchases to company A)
2. A B A C A D A E A F (5 purchases to company A)
3. A A B A A C A A D A (7 purchases to company A)
4. A B C D A E F G A H (3 purchases to company A)
In each of
these preceding sequences, I continue to return to company A. The degree of
loyalty can be thought of as a percentage of my pocket (the amount of money I
have to spend) relative to my spending at other businesses or companies.
One way to
view loyalty is the degree of commitment that one company has to another to
purchase or utilize its products or services. While this may not be a pure
academic definition of the word loyalty, it is intended to show that there is a
degree of variability in the word loyal when dealing with customers and companies. To a
certain degree, loyalty is connected to trust, but trust does not guarantee
loyalty to the extent shown above in the first sequence. It is present in all four sequences.
A more personal way to think of this is that
we have friends to whom we are loyal and while at the same time we have friends
who are only acquaintances, and to whom we have less loyalty. The degree of loyalty
that we give to other people is no different than the degree of loyalty customers will
give to different companies with which they do business.
The bottom
line is that we must not look at loyalty as a black-and-white parameter. There
are degrees of loyalty, which we will give to different companies depending on
a number of reasons. The challenge is to find ways of differentiating the
different degrees of loyalty. That is a subject to be dealt with in a later blog.
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