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Monday, April 15, 2013

Customer Loyalty - Driven by Desire or Fear?

Many successful businesses invest in customer loyalty programs that are focused on enhancing the customer’s buying experience ... typically with extra value in the form of and additional complementary product/service or perk/status/priviledges.
Often, however, how the customer feels about what they get is actually more important than what they actually get. The emotional connection is what actually drives customer loyalty. The emotions about what they have to gain through loyalty and about what they might lose by taking their business elsewhere.

Consider Airline mileage programs. I’ve seen people inconvenience themselves to either use a carrier simply to add to their mileage points or to choose flight times/dates based on the impact to their mileage totals. Are they being loyal because they want to increase the value of their bank of miles or are they being loyal because they are afraid of losing the value of the mileage points they have collected before they reach a level they can be "cashed in"?

When it comes to customer loyalty awards that make us feel more important and more valued, the fear of losing that recognition can be a greater motivation to loyalty than the actual cash value of the reward received.

Here are some interesting customer loyalty stats:

88% of customers say that quality is a key factor in their decision to remain loyal to a brand

72% of customers say that customer service is a top priority for customer loyalty

62% of customers do not believe that the brands to which they  are most loyal are not doing enough to reward them

54% of customers would consider increasing the amount of business they do with a compay for a loyalty reward

48% of buyers agree that their 1st purchase, or the start of using a new service, is the most critical time for a company to gain their loyalty

source: ClickFox Brand Loyalty Survey


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