MORE VALUE DRIVES MORE LOYALTY
Another calendar year draws to a close, and for some, if not many of us another financial year closes. Still, if we plan it well we get two weeks off to enjoy ourselves with those really important friends and family and clear our minds of the clutter that has engrossed us for the last twelve months. Hopefully we have completed our planning for 2016 so this really can be a period of peace.
I always think that those few days between 28th and 30th of December offer the time to reflect on the past year. What did we do well and what can we do better? There is always one area I believe where every company can improve and that is customer loyalty. This is not meant as a provocative statement, it is a fact of life. Everyone is looking for better value. Remember our definition of value?
Value = Benefits – Costs
Where benefits are what the customer gets (return on investment, service, convenience etc.) and costs (money, inconvenience, risk etc.) are what the customer gives.
Typically B2C companies offer loyalty programmes. However, Tesco’s and Sainsbury’s loyalty cards have not stopped them losing market share to Lidl and Aldi. Because of the vast numbers of customers these organisations have a “one size fits all” approach to loyalty. Despite their loyalty programmes that approach appears to be based on the concept that cheapest prices drive loyalty. The budget airlines disrupted the market with low prices, a similar story and strategy. To some people lowest price is clearly the best value, but not to eveyone. Take a minute to think about your own loyalty to the people you deal with and what drives it. I suspect that what drives your loyalty is different to mine and to that of some of your friends and colleagues. I use Sainsbury and fly with Emirates, not because of their loyalty schemes or their prices but because of the value I believe I get.
In the B2B environment I believe that it is feasible to offer a tailored approach to loyalty and that is understanding what your customers’ value and by continually and consistently delivering, or better still exceeding it. We will look at this some more next year.
In last month’s SalesPulse I promised to let you have a copy of our Managing Market Change case study which you can find here.
All that remains is for us all at Koru to wish you and your family a very happy Christmas and a healthy, prosperous and enjoyable 2016.