In his new book “The New Expert” by Robert Bloom, US CEO Publicis Worldwide – Retired, the author states that loyalty is dead but that there are 4 Decisive Moments that you need to focus on and plan for to grow your business. Is this true? Is loyalty dead?
With smartphones and mobility and the new ways of shopping loyalty might be severely wounded but I don’t think that it is dead.
Loyalty is given to the company that uses these same technologies to satisfy the customers wants and needs to create a competitive advantage or a barrier. If you are selling solely on price, you can’t expect loyalty. But if you have another selling proposition that loyalty is within your reach.
Think about what happened to Netflix last summer. First they raised their prices by about 30%. Customers were very unhappy but they settled down and the defections were not that bad. Then, about 4 weeks later they announced that they were going to split into two companies – Netflix for streaming and Flixster for via the mail. This is what caused customers to abandon the service en mass. Customers walked because they didn’t want to have to manage two sets of data. Part of the value that Netflix provided to them was to manage their queue and their history and even to provide ratings. If the customer now had to manage that on their own through two different sites it was no longer worth it to them. So they dropped the service.
Luckily for Netflix they realized the mistake they made and decided not to split into two companies (although prices still went up) and customers have now come back.
Loyalty isn’t dead, but how are you competing on something other than price to earn it?