Why It’s Time to Redefine Customer Loyalty

Our Advofest conference in 2019 was a wonderful celebration of brand advocacy, as leaders from various industries came together to share experiences of the changing landscape in business. Customer-business relationships are evolving, and our speakers discussed the ways in which companies can adjust to this trend.

We welcomed Dr Laura Chamberlain, Associate Professor of Marketing at Warwick Business School, who gave us a fascinating insight into brand loyalty. Laura argued that the customer experience field makes assumptions about loyalty which are outdated and must be reconsidered.

She believes that businesses must reduce their reliance on metrics such as Net Promoter Score, and instead adopt a human-centric engagement strategy. This is because customer loyalty is the ‘holy grail’ for modern businesses, so they must do everything in their power to secure it.

The power in business relationships has shifted towards the customer in recent years. Customers are aware that loyalty is far more valuable to the brand than it is to them because current loyalty schemes are ineffective.

Loyalty can now be commercialised with reward schemes, but these do not adequately reward returning customers. The benefits of schemes which merely reward repeated purchases are not enough to cultivate a true affinity between customers and businesses, transforming them into loyal advocates.

This is due to the fact that most companies measure loyalty by metrics such as Net Promoter Score (NPS), when true loyalty goes beyond simple transactions. These metrics can be useful, but should not be the basis of models for measuring loyalty, as human emotion cannot be expressed in numbers.

In place of these outdated loyalty schemes, Laura argues that a customer-centric model must be adopted. Her ideal customer relationship is driven by three questions which aim to engage with customers on a human level rather than relying on numbers.

To truly advocate for a brand, customers require an emotional relationship to be nurtured between them. While a loyalty card shows that a brand values a customer’s purchases, true loyalty comes from being valued as a person.

Once this model is adopted, customers will reciprocate the loyalty they are being shown by the brand and will become advocates. Businesses cannot cut corners to earn loyalty, but the resultant benefits make it well worth their while implementing this model.

The importance of loyalty in business cannot be overstated. Laura describes loyalty as the ‘holy grail’ because an engaged community of loyal customers can facilitate rapid, sustainable growth.

The recommendations of trusted brand advocates are far more effective than traditional marketing or advertising campaigns, at a fraction of the cost. Companies must cultivate a two-way relationship with customers, rewarding brand advocacy with a great customer experience.

You can watch Laura’s full talk below:

At Hyve we love helping businesses to use brand advocacy to grow their brands, and the idea of loyalty is vital in achieving this. Laura’s model for redefining the customer relationship is a great way of both ensuring and rewarding loyalty, to the benefit of everybody.

We would like to thank Laura for joining us at Advofest, and sharing her ideas about brand advocacy and loyalty.

You can learn more about Advofest on our website and our official social media channels.