Loyalty is Profitable

Loyalty is Money. Be Loyal and Follow the Money.

Loyalty is big business. Here are 10 compelling reasons customer loyalty should be at the heart of any business.


1 Loyalty is Putting the Customer First

Customer loyalty means putting the customer first. Loyalty’s definition in part is devotion, fealty, and commitment. Putting the customer first is part of being loyal to a customer. Creating new products and services should start with a company’s commitment to building deeper loyalty with its customers.


2 Rewarding Loyalty Pays Dividends

Invest in your customer and they will invest in you. Companies committed to customers have customers committed to the company through the company’s products and/or services. Investing revenue dollars back into the customer communicates to the customer that loyalty goes both ways.

Loyalty programs, customer engagement programs, and market research on existing customers demonstrate a long-term commitment to your customer and communicates to the loyal customer you care about cultivating a long-term relationship.


3 A Bird in the Hand

Maintaining a loyal customer is worth far more than gaining a new one who is not loyal. Let me be clear: customer acquisition is a critical part of business growth, but it must not come at the cost of sacrificing the foundation of existing customers and their loyal business.

Far too many for-profit companies are too heavily focused on new customer acquisition. Often this objective can be short-sighted and comes at the cost of losing loyal customers. Cannibalizing marketing dollars from current customer loyalty and engagement programs to engage in new customer acquisition demonstrates a loss of sight on what is important, the loyal customer. It results in a loss of revenue from existing customers, forcing companies into an outward facing, customer acquisition strategy which is shallow and short-term focused.


4 A Strong Branded Foundation

Strong foundations must be built. A successful company with loyal customer relationships does not happen by accident. That company is thoughtfully built and deliberately maintained. Within the organization from the top down and from the bottom up, a truly successful and long-lasting company will be made up of individuals who are loyally committed to their customer. From a company’s mission statement, values, and employee handbook, to individual employee goals, employee recognition programs, and any other aspects of the company’s culture, the guiding principle must be aligned to achieving and maintaining customer loyalty.


5 Relationships Matter and are Material

From Customer Service and Marketing all the way to the C-suite and Board of Directors, we know relationships matter on a personal, professional, and business level. Each and every company has a unique and individual relationship with the customers they serve, regardless of the industry or sector, service or product.

Relationships are not static. They are on a continuum, constantly evolving based upon the actions and reactions of those in the relationship. Relationships are built upon trust. Trust leads to loyalty. Loyalty over time pays dividends. Loyalty is long-term and material for any business.


6 The Loyal are Forgiving, the Transactional Are not

Loyal customers have a greater capacity for forgiving a company’s missteps and mistakes. New customers have a far lower patience tolerance threshold and are more transient, willing to shift to a competitor based on limited interactions with your company. Customer loyalty is a well. A company can draw from a well that is deep, established by investing in that customer’s loyalty to create that deep a reservoir. Fail to invest in customer loyalty and your well will run dry quickly. Customers with a shallow well are far more likely to leave you when you fail to meet their expectations during any one interaction with them.


7 Loyalty Speaks Volumes

Investing in loyal customers is investing in one of the most powerful marketing tactics for third-party validation, word of mouth. There is no more powerful marketing tool apart from need (demand) that a company has in growing business than the word of mouth testimonial.


8 Upselling Enriches

“Trust is built in very small moments” –  Brene Brown

Loyalty is incremental and is built on trust over time. When trust is given to a company and a company that meets the obligation of that trust, that company is rewarded with a greater degree of trust. Each level of trust becomes deeper. A company committed to customer loyalty is committed to building trust and generating opportunities to earn greater and greater trust through up-selling. Up-selling is an opportunity created by the company to earn deeper trust with loyal customers.

Upselling cannot occur effectively with new customers. While price may be a relatively effective tool to up-sell short term, it is transactional and only a gateway to building greater trust and loyalty when the up-sell itself rewards the customer’s trust. Ask yourself, how often are you likely to take at face value an offer for deluxe model, combo package or loyalty account when the company has not yet proven themselves to you as a customer?


9 Being Customer Centered Sells

Effective selling starts with customer-centered products and services. Selling a product or service a customer needs and wants is critical. No salesperson can effectively and sustainably sell an unwanted product or service. Personal power, personality, effective training, drive and determination, and experience will only get a salesperson so far. There is no better way for a company to lose ground to market competition short-term or long-term than by losing touch with the loyalty of their customers and as a result offering dated or irrelevant products and services. In a market landscape where competition abounds, a company with a product or service focused on customer loyalty will always have a solid foundational business and market opportunity.

10 Loyalty is Reciprocal – Loyalty is about relationships, and the definition of a relationship is “the way in which two or more individual entities are connected.” Being loyal is a part of human nature, and demonstrating loyalty reciprocates loyalty.

Excellent Examples

Look for no further proof that loyalty is profitable than in these successful companies that build upon loyal relationships with their customers:

  • Apple – Some have called Apple customers some of the most blindly loyal customers, brand fanatics, and even apple evangelists. Apple products and technology are well known for their striking design and style, functional reliability, and user experience. But beyond these tangibles, Apple has created and cultivated a deeply personal relationship with customers who use its products and technologies. Deeply personal, fundamentally human, and like a close friend who is incredibly loyal, Apple has and maintains an ethos and mystic while taking on the unique and individual faces of all its loyal customers.
  • Starbucks – Read the history of Starbucks (Onward: How Starbucks Fought for Its Life without Losing Its Soul) and you will instantly understand Starbucks drinkers loyalty to the brand. Described as a coffee experience, Starbucks has both the formula for excellent coffee and excellent customer loyalty, putting a premium on experience and purchase. They liberally reward current customers’ loyalty, with baristas with outstanding personality and interpersonal skills, professional training, and professionalism. Starbucks is a company that understands the importance of loyal, well-paid employees who will create a product and service patronized by loyal, well-paying customers.
  • Subaru – Subaru has the numbers to prove they are committed to customer loyalty, from an Experian analysis of 6.8 million household repurchases, Subaru ranked first for brand loyalty and manufacturer loyalty. With a customer-centric model, excellent customer service, and a deep understanding of how to transform a product into a personal lifestyle choice, Subaru owners are some of the most loyal owners. Look at their most recent commercial tagline. “Love, it’s what makes a Subaru a Subaru.”
  • Amazon – Amazon’s founder, Jeff Bezos, understands the importance and profitability of putting the customer and focusing on loyalty. From the early days of Amazon, Bezos would bring an empty chair into meetings. That chair represented the customer. The message was clear: the customer was always top of mind and seen as the most important person in the room.