Let’s stop talking about customer loyalty

by Dr Susanne O’Gorman – Insights Division / Kantar – Global Head of Customer Experience

A couple of weeks ago I came across an article titled “The Death Of Brand Loyalty”. The author argues that because of a generational shift the concept of loyalty has lost relevance and nowadays it’s all about constant change. But is that really true?

While reading this article I was standing on the platform waiting for my train. It has not arrived when scheduled. Even after 30 minutes there is no announcement saying it is late. I opened each of my three public transpOKort apps in a desperate attempt to find out whether I would be in time for my meeting and the one thought going through my mind is, ‘No, the real reason for customer churn is simply that many brands today don’t provide a customer experience that makes people stay with them’. If I could have found an alternative to that train I would have taken it!

The concept of loyalty in itself is coming from the wrong perspective. We hope and expect our friends, partners, spouses to be loyal to us and companies want their customers to be loyal to them. Whereas the appropriate question should be, what do I need to do to make my customer stay, spend more with me and recommend me to their friends? And this is where the problems start. Kantar’s most recent CX+ report for banks in France showed that less than half of all banking customers receive relevant advice and information from their banks, only one third felt appreciated as a customer and a small minority of 16 percent stated they were delighted with the last interaction.

I don’t dispute that there is a generational shift taking place. Expectations of consumers are changing rapidly across generations and countries. And this makes it even more urgent for brands to stop talking about customer loyalty and start to become customer-centric. Customer-centricity in its true definition (and not just as a buzzword) implies setting up an organisation from an ‘outside-in’ perspective: the customer is at the heart of the organisation, the company is organised around customer journeys rather than (often siloed) functions. Customer feedback is made available to everyone in the organisation so that the customer literally has a seat at the table.

And finally, true customer-centricity is achieved when brands manage to engage their customers emotionally. Those French banking customers who felt appreciated showed 12 time higher preference for their brands. The times of simply delivering what is expected have long gone. In an age of experience, we need to do more than just meet needs – and that is real generational shift happening right now.

So, what do you think is responsible for the apparent decline in brand loyalty?