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True Customer Loyalty: Part Disposition, Part Behavior

Posted by Josh Mendelsohn on Thu, Oct 07, 2010

Companies have always sought “customer loyalty” as a goal, and this goal has taken on even more significance in the current economic climate.  From a measurement perspective, much has been written about the best way to measure true “loyalty.”  Whether it is through the use of NPS (likelihood to recommend) or by more concrete actions like re-purchase like cross-sales and re-purchase, everyone has a philosophy on the best metrics for demonstrating loyalty. 

Unfortunately, most companies choose to rely on either behavioral outcomes OR emotional measures when quantifying customer loyalty.  In reality, true loyalty is a combination of internal disposition AND behaviors.  And  is NOT something that can be purchased, it’s earned.

For example, I am blindly loyal to JetBlue.   I love the experience.  I love having tv as an option.  I love the snacks.  I love the extra space.  By most metrics, I am an average or below average customer.  I probably fly JetBlue once or twice a year and am not involved in their “community” and have never redeemed my TrueBlue points.  But what they probably don’t know is that I routinely talk about how much I love JetBlue and always look first at their options when booking a flight and only choose another carrier if the timing just won’t work for me.

 

customer loyalty resized 600

On the other hand, by all behavioral metrics I am loyal to my cable company.  I have been a customer for years.  I recently upgraded to the sports package.  I have numerous cable boxes in my house. I have a voice/internet/cable bundle.  And I already get Showtime and HBO (I watch too much TV.)  Yet every football season I consider switching to DirectTV for the Sunday Ticket package and the earlier showing of Friday Night Lights.  I am considering getting rid of my home telephone line.  And I am indifferent about my internet service.   Clearly, I am not truly loyal to the brand… and they have no idea.

The takeaway is that when thinking about measuring and managing customer loyalty, it is essential to serve both the emotional and behavioral side of people’s loyalty to get a clear picture.  Relying on either alone can lead to inaccurate measures of customer loyalty and decisions that don’t make a ton of sense.  So, take the time to understand what your customers are thinking AND doing and act accordingly.

Posted by Josh Mendelsohn. Josh is our VP of Marketing and loves live music, tv, great food, market research, New Orleans, marketing, his family, Boston and sports. You can follow him on Twitter @mendelj2.

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