Every once in a while I read an article and start wondering, who is missing the point, me or the writer? In this Advertising Age article, writers Hamish Pringle and Peter Field assert that customer loyalty isn’t as valuable as one might think. Actually what I think is customer loyalty is more valuable than most people think! The facts they reference and the conclusions they reached don’t exactly match up! Perhaps it’s all in their definition of customer loyalty?
Call me simple minded, but I figure the more a customer buys, the more customer loyalty they have shown. After all, every decision to purchase is a choice of buying from my business or from my competitor’s business. In fact there is always the option not to buy at all! The loyal customer is one who comes back again!
I’d like to ask the authors a question like, how do they suppose businesses can inexpensively communicate to customers without having the customers’ contact information? Email, telephone calls, and direct mail all work as effective marketing channels. Of the three contact methods, email is the least expensive for delivering a targeted marketing message, but it’s very difficult to execute an email direct marketing campaign without knowing the customers’ email address. In absence of a customer loyalty and rewards program, how do the authors think most businesses gather their customers’ email addresses?
Sure, ecommerce merchants obtain e-mail addresses as part of their transaction and some percentage of terrestrial customers will opt in to an email list, but most businesses have to make it worthwhile to obtain their customers’ email address. More and more consumers are wary of providing email addresses for fear of attracting too much spam.
Speaking of spam and the importance of avoiding contributing to this growing problem, I’d like to ask the authors how do they think a business can target their marketing messages without having a record of their customers’ transaction history? The best businesses have their customers purchase history in a database that has been married with customer profile and supplemented by geo-demographic data. The resulting combination is a rich customer profile suitable for targeting marketing messages.
In absence of a customer loyalty and rewards program, how do the authors think businesses can afford to lift and shift loyal customers buying behaviors. They can’t easily, so predictably it appears the authors believe it’s more effective to spend money advertising in hopes of acquiring new customers? I suspect their conclusion may be true for the market leader, but not for everybody else. Let us not forget there is only one leader and often lots of followers who want to be the next leader. The wannabes need to do everything possible to developer their customers’ loyalty!
