The End of Brand Loyalty

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As marketers or small business owners, there is no better vision for our future than amassing a large number of loyal customers.

Strong brands used to rely on those brands to reach customers. Brands stood for something. They signaled to customers the kind of quality and service they could expect. They helped well-established companies fend off smaller rivals, because customers were more likely to go with brands they knew and liked versus taking a chance and trying something new.

Newsflash: that’s not the case anymore

Over the last five years, all indicators point to the fact that brand loyalty is in decline. Consumers are more likely than ever before to shop around, looking for the best value instead of choosing and sticking with a particular brand.

Why is this happening?

Theories abound on why there is such a strong decline in brand loyalty among consumers. I’ve managed to find three lines of thinking that combine to account for this on the aggregate:

  1. Consumers have more power than they used to. In our digital world, transparency is key. The ability to shop around is greater than it used to be. There is an endless amount of information out there for the savvy consumer, and they’re using to ensure they make the best possible purchasing decisions.
     
  2. Companies have eroded trust in the marketplace. It’s no surprise that this recent decline coincides with the recent financial crisis. Large companies in a wide variety of industries have been the perpetrators of great injustices against the public, their customers among them. Why would consumers feel loyalty to specific brands when they don’t feel that same loyalty in exchange.
     
  3. The pace of technology puts more pressure on companies to change and evolve. Customers have higher expectations, partially due to the proliferation of technology impacting all facets of their daily lives. Companies that move too slowly let competitors take the lead and risk losing once-loyal customers in the process.

What does it mean?

Loyalty is a two-way street. No longer is it effective or acceptable for companies to spend massive amounts of money on branding, with the hope of adding new customers who plan to stay for life. It just isn’t happening.

Companies need to change the way they think about their brand. They need to change the way they think about their marketing. And they need to change the way that they think about engaging with customers.

It’s not enough anymore to publicly claim that you “put customers first”. You actually have to do it.

That change comes from the top down. It involves a shift in culture that focuses on delivering unmatched customer experiences, in sales, in service, in product design, etc.

Maybe we can’t count on brands ever being as trusted as they once were, or on consumers to ever be as loyal as they once were. But the very best companies, the ones with the biggest upside in this shifting landscape, are those that truly act in the best interest of the marketplace.

How to Handle Customer Service on Social Media

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Customer service on social media is not for everyone. There are pros and cons that each company must actively weigh before making the decision.

Pros

  • It’s public facing, so good customer support will be rewarded, acting almost like marketing
  • It’s where many customers want customer service, so you’d be catering to them

Cons

  • It’s public facing, so bad customer support will be visible for the whole world to see
  • It requires a slightly unique skill set to that of a more traditional phone-based or email service rep
  • It is one more channel to keep track of and monitor, if you’re using social media in addition to phone support, email, live chat on your website, in store service, etc.

The world, in many ways, is much more complicated than it used to be for businesses. Customers will air your dirty laundry on social media regardless of whether or not you choose to actively engage with them there. So most companies see the need to take care of certain customer service issues publicly.

The ones that do it well are rewarded with higher customer service ratings and more positive reviews. But if your company makes that decision, you have to do it with 100% confidence that your team has the tools and skills necessary to do it right.

A half-hearted effort at customer service, when done in such a public forum, will have negative effects. It will be worse than just letting customers complain without a response. Because when you have unhappy customers, and you can’t give them the answers or solutions they need, all you will do is compound the problem and look incompetent in front of thousands or millions of potential customers.

If you do choose to handle customer service on social media, aim to:

  • Delight
  • Excite
  • Offer compassion
  • Turn negative experiences into positive ones
  • Make customer service a key component in your branding efforts
  • Train the very best customer service reps and give them the freedom to make decisions that keep customers happy

Top Customer Service Mistakes

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For those who don’t see the connection between customer service and marketing, I ask that you broaden the way you think about marketing. A marketer’s objective is to tell a story, to connect that story both to the brand and products he represents as well as the target market of consumers. The goal is to reach consumers, get them interested, bring them to the door, and sell to them.

For many, it ends there. But I would argue that one of the most important jobs a marketer has is to make sure that story they are telling is true. When customers’ experiences don’t match up with what they expected, they’re not going to be happy. They’re not going to purchase from you again. And they might even ask for a refund.

Customer service is an extension of marketing because it’s a direct point of contact between the company and the customer. It is a continuation of the story marketers are telling.

Here are the top 7 customer service mistakes a company can make:

  1. Not Training Properly – customer service agents need to know the ins and outs of everything you sell. They need to know the answer to every question before it gets asked, or at least who to go to when they don’t know the answer. And as marketing and product teams make changes, those changes need to be communicated to customer service teams quickly and effectively.
     
  2. Not Making Yourself Available – there’s nothing worse than not being able to reach a customer service rep when you need one. Phones, emails, social media, live chat, and in store, it’s critical that your customer service teams are accessible nearly 24/7. If that’s not possible, at least create a way for customers to reach out and then be sure to get back to them as soon as possible.
     
  3. Not Enough Technology – the right technology makes a customer service agent’s job easier by giving them easy access to product information, customer records, and the tools they need to respond to complaints.
     
  4. Not Giving an Inch – customer service teams need to have some flexibility in how they respond to customers. Company policies are fine, but leeway is needed to solve customer problems before they turn into larger complaints and negative reviews.
     
  5. Not Making the Customer Happy – continuing from #4 above, a customer service rep should do whatever it takes to create happy customers. Sometimes this can be in the form of a discount or refund of some kind. Other times it may be a replacement, or some other “make good”. Customer service can sometimes seem more like counseling, and it should be the goal of service teams to turn angry or upset customers into happy ones if they can, no matter what it takes.
     
  6. Not Acknowledging Your Flaws – let’s be honest, the customer is not always right. But neither is your company. Mistakes are made, and no product is perfect. Customer service teams need to know the most common complaints or issues they’re going to deal with and have a solution when they hear them. And they need to be able to voice those concerns back to other departments in the organization to affect positive changes.
     
  7. Not Following Up – you may not be able to solve every problem on the first try. Follow up is a critical part of customer service. When you say you’re going to find out the answer to a question, do it. When you say you’re going to ship out a replacement, make sure they get it. Show the customer you care not just by answering the phone, but by following up to make sure they are better off after you do.

Avoid these mistakes and you will make customers happier. You’ll be more likely to turn them into a loyal customer and advocate, and you’ll avoid the negative reviews that can crush a business in today’s social-driven world.

Who Are Your Competitors and Do You Care?

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In my work, I meet two different types of business owners and managers. There are those that spend all of their time focusing on what the competition is doing, and there are those who never pay attention to competitors.

Which bucket do you fall in?

The people that focus on the competition are worried about losing customers. They are worried about special offers and promotions in the marketplace. They see changes in competitors marketing strategy or product offerings and react to them.

The people that don’t care about competitors claim there are no “real competitors”. What we offer is better or different, they say. No one does exactly what we do, and that’s why our customers choose us, they argue.

Which group is better off?

You might argue that the people in group one are being too reactionary, spending too much time worrying about the competition and not enough time building their own brand. You’re right.

You also might argue that the people in group two are a little naïve about their market and might miss something important that could affect their business. You’re right again.

In reality, you have to be a little bit of both, and somewhere in between. While it’s important to know who your competitors are, and what they’re doing, it’s also important to differentiate yourself and define your own brand. Customers are looking for a reason to buy from you and not them. You can’t give them a reason if you’re just copying what your competition is doing, but you also can’t give them a reason if you don’t know what your competition is doing.

Succeeding in a competitive environment means knowing what other companies are doing, and offering something better. What value do you provide your customers?

Next week we will be digging deeper into the competitive landscape in two posts designed to offer conflicting views of how to deal with the competition. Stay tuned!

Why Entrepreneurship Needs to Rebrand Itself

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Merriam Webster defines an entrepreneur as “one who organizes, manages, and assumes the risk of operating a business or enterprise”. Sounds right to me.

You start a business, you are an entrepreneur. But here’s the problem:

In today’s world, we are so over-exposed to the wonderfully successful tech entrepreneurs like Mark Zuckerberg and those with companies acquired by the likes of Facebook and Google, that when most people here the word entrepreneurship, all they think about is the tech scene.

And I think that’s a problem. Here’s why:

Ben Casselman, writing for Five Thirty Eight, detailed the slow death of entrepreneurship in America. And while this is not a new problem, it’s a problem that most people can’t see because of the success of a very few “lucky” technology startups.

I’m not trying to discount the work of those in the tech space, all I’m saying is that by glorifying their work over other fields, we don’t expose would-be entrepreneurs to ventures that might be right for them. And we don’t make people aware that the rate of entrepreneurship in this country is going down when we spend so much time thinking about how successful a small number of entrepreneurs have been.

And so, at the end of the day, we end up raising a generation of people with fewer and fewer people who end up starting a business. That means fewer new businesses, which make up a big chunk of new jobs every year.

We used to be a nation of entrepreneurs. And in many ways, we still are. But less so than ever before. And that could spell trouble for the economy of today, and even bigger trouble for the economy of the future.

It’s not all about tech. But it is a little bit about tech. Thanks a lot Zuckerberg.