The concept of loyalty has changed. The concepts of brand loyalty, product loyalty and personal loyalty are all intertwined now. How many large organisations have commoditised the concept of loyalty to suit their agenda, not the needs of their loyal clients? Be careful you don’t make the same mistake, warns Jim Prigg…
What is loyalty?
Loyal (n) Definition: True or faithful. Steadfast in allegiance.
Loyalty is a double-edged sword. If you require people to be loyal to you, then you have to provide them with something they value, a service they are prepared to pay for, or you attract them with your experience and expertise.
Do large companies have loyalty to you as a customer? A little research will show that often they have more interest in attracting new customers rather than rewarding existing ones…
Example one: Phone companies try to attract new customers by offering special deals to get people to switch providers. But what about the loyal customer who has been with them for years? Are they just taken for granted? Amazingly, it is usually only after you intimate that you might leave them that they offer you an incentive to stay, often not as attractive as that offered to get new customers to join!
Example two: Credit card companies offer seductive low interest rates to get you to switch. Yet the good, solid customer who has paid on time for years doesn’t get these offers made to them. Why don’t they reward loyal and long standing customers?
Do employees have loyalty to their employers? Consider the employee who gains special skills, such as an MBA. They use that as a lever to get more money from where they are currently employed. Do they also use it to leverage their income earning capacity with another employer? There is nothing wrong with that. Loyalty is about being true and faithful, isn’t it?
On the other hand anyone who has been handed a redundancy package has felt the lack of corporate loyalty. Some might say that the move to contract workers or consultants is about disloyalty to permanent employees. Yet the company must make a profit so employees can be collateral damage in that aim.
Your organisation or your company needs to make a profit. It is the major reason for existing. If you don’t make a profit, you cease to exist. Business entities are not charities.
Organisations and individuals are assailed with new offers, extra information and innovative products every day, like never before. Why shouldn’t people make decisions that will save them time, make them money or build their prestige and self esteem? When people move from one supplier to another, is it going from good to better? They do have the right to choose and change their suppliers. Your challenge is to retain them to get new business or subscriptive income.
So, the idea of loyalty needs to be revisited by businesses:
- You can build a sustainable business model of repeat or subscriptive income
- You can let your customers make the decision to be loyal, because they want to be loyal
The answer is bilateral.
- What do you demand from clients to earn their loyalty?
- What do clients demand from you to earn your loyalty?
Building loyalty with advice clients
Modern commerce has trained, cajoled and forced people to be price conscious, not value appreciative. Advisers have to learn how to contend with comments like:
“Give me a discount like the online providers.”
“Give me a quote Mr Salesperson. Thank you. Now I will go to the web to get a virtual comparison.”
“I can buy it cheaper elsewhere.”
“Why should I pay for your advice when my bank/industry super fund doesn’t charge me?”
The really interesting paradigm shift in this development has been the lessening of loyalty as a relationship component. So what can replace loyalty to ensure that you have a viable business model?
Well it as simple as 1, 2, 3. If loyalty is a diminishing asset, then sales skills have to be considered as an appreciating asset to balance the equation.
Sure, you can have great products or great services, but to bolster loyalty you have to get back to being able to sell those great products and services you have created.
The better the loyalty, the less need to sell. The less loyalty the greater the need to sell your offers. What are the benefits and advantages of what you do that you can sell to existing clients and prospective ones?
- Is it the length of time you have been in your business?
- Is it the quality of your suppliers?
- Is it the value in the cross generational interchange of wealth you can provide?
- Is it in the continued educational experience you give people?
- Is it the exclusivity and professionalism of your service?
- Is it regular communications?
- Is it how you show people you care?
In David Yule’s excellent book 87 TIPS for practical SELLING (ISBN 1-85252-478-2) he uses the expression “the age of the never satisfied customer” (page 107). David has uncovered the dilemma of service related industries. He says: “If you want repeat business, you must maintain contact, solve problems, learn about customers (businesses) and be proactive.”
People are being bombarded with new offers, products and ways of spending their money. Loyalty is a state of mind. Good selling and communications skills with clients and potential clients will increase your chances of building better relationships in your world.
So, is your business still transactional, related to product sales, or is it developing loyalty programs and devices so people will pay you for advice, because they see long term value they are prepared to pay for?
- Create your own loyalty program based on continual information flow
- If you have clients who are not as loyal as you would like them to be, what do you need to do to rekindle or invoke that loyalty?
This article is reprinted with permission from Jim Prigg and Knowledgemaster Pty Ltd. Knowledgemaster is an online resources company that delivers practical communications, interaction, sales and soft skills tips, tactics, techniques.
Jim Prigg is the CEO and founder of KnowledgeMaster. He says there is a raging indifference and ignorance to showing people in a practical sense the real face to face skills they need to sell insurance, which prompted him to create the KnowledgeMaster insurance series. It is not about compliance, technical or product knowledge, but the capability to inject emotion and empathy into the sales process. Rather than tell people what to do, KnowledgeMaster shows them “how to” do it. This means having access to practical scripts, interactive reports, successful communications ideas and just as importantly actions and activities at the end of each topic so we can help people to learn.