By Jackie Huba, bestselling author of three books on customer loyalty, including Monster Loyalty: How Lady Gaga Turns Followers into Fanatics
Most everyone in business agrees that it’s increasingly difficult to create and keep loyal customers. With myriad product and service choices and countless ways to get them, including brick-and-mortar and ecommerce, it’s easy for fickle consumers to switch brands on a dime.
Now, the Experience Economy is creating yet another way to erode customer loyalty. Customers value their experiences with brands in parity with the brands’ products and services. It’s customers who are fully in charge of their brand experiences and dictate what they want, when, where, and how. Organizations trying to keep up with customers in the Experience Economy face a turbo-charged race.
I maintain that the Experience Economy is where brands will gain not just loyalty, but evangelism—when authentic emotional connection is in the mix. Let’s unpack that.
What customer loyalty is not: Loyalty programs. In many industries, we see “loyalty programs” centered on rewards or incentives. That doesn’t seem like loyalty to me, when the main motivation is collecting points. Think about airline loyalty programs. Are you in one? Do you truly love that airline and evangelize about it? If not, then the program doesn’t engender loyalty. It engenders repeat use.
The Loyalty Ladder of Customer Behaviors
What customer loyalty is: Jumping in to help when the ship goes down. I use a Loyalty Ladder model that progresses from customer satisfaction to retention to referrals, and then evangelism, where customers act as a volunteer sales force. Beyond that is ownership, in which customers literally feel like it is their job to support the company in any way.
Here’s an example with Southwest Airlines. After 9/11 when airlines weren’t flying, many were laying off personnel. Many of Southwest’s customers sent in checks, money, and returned flight certificates, explaining that they didn’t want to see their favorite Southwest gate agent or flight attendant laid off. Now that’s the Holy Grail everyone is trying to achieve in business.
The road to that Holy Grail isn’t just through products. It’s experiential, emotional connections. The most successful companies are those that are masters at the Experience Economy, creating exceptional customer experiences across all touchpoints and subsequent emotional connections with their customers.
When customer experience involves the variability of employees, you can have absolute success—and absolute failure. When it comes to digital and ecommerce, we're getting increasingly better with technology to deliver an exceptional customer experience.
Lately I’ve been pondering this question: How can companies in the Experience Economy create an authentic emotional connection—with or without human interaction? Answer: You have to sell something bigger than what you're actually selling.
Here are three ways to sell that “something bigger” and elevate emotional experiences, thereby increasing customer evangelism.
1. Lead with purpose. Research shows that companies with a purpose behind their products—a higher calling—are the ones that succeed. Jim Stengel and Millward Brown analyzed 10,000 companies and sifted out the top 50 that led with purpose. Tracking those companies’ performance against the S&P 500 revealed that these purpose-led companies outperformed the S&P 500 by 400 percent. Why? Leading with purpose creates an experiential, emotional connection with evangelistic customers who believe in the purpose. For example, Lady Gaga recently launched a makeup line, but she is fervent that it isn't just another makeup line. She says it’s a way to discover who you really are through makeup, just as she did as a child. By watching her mother put on makeup, she realized she could create this Lady Gaga character—and ultimately gain confidence—through makeup.
2. Embrace the un-sell. Another purpose-led brand is Lovesac. Realizing the need to protect the planet and not throw away furniture every five years, founder Shawn Nelson developed a line called Sactionals. His philosophy, Designed for Life, is that you buy one couch, and it lives with you for the rest of your life because it’s modular and upgradable. His reason for wanting you to buy from him is so that you buy less and save the planet from outdated, discarded furniture. And that's how he creates loyalty.
3. Find someone people can root for. Not only is Lovesac purpose-led, but it’s founder-led, which is another smart strategy. Shawn Nelson is out there on social media, and people love him. He's gregarious, he's fun, and he's committed to the environment. Many people follow this company in large part because of him. But what if you are a large company without a Shawn Nelson? Find one. Personifying large brands is a challenge, but people love and root for people, so it’s worth the effort to find a spokesperson who delivers an emotional connection and can create word-of-mouth promotion.
Customer evangelism, the level of loyalty in which customers voluntarily sell for you, starts with an authentic, emotional connection to your brand. Focusing on what the customer wants—a hallmark of the Experience Economy—will naturally lead to strategies that engender emotional connection.
Click here to read the eBook “Industry Experts Share Their Predictions for Customer Loyalty,” which features 7 loyalty trends sure to shake up the traditional points-for-purchases scheme.
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