The End of Brand Loyalty

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.

Top Customer Service Mistakes

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.

How to Lose Respect and Alienate Customers

Want to lose your customers’ respect, refund lots of purchases, gain a negative reputation on blogs and social networks? It’s easy to do, a lot easier than you might think.

Here’s how: Don’t keep your promises.

The disconnect between marketing and every other division within your organization needs to stop. And it needs to stop yesterday.

Marketers have a job to do, drive sales. Whatever you’re responsibility is, whether it’s brand building, email, lead generation, website design, etc., the end goal is driving sales. You’re only as good as the business you bring in.

Because that is the case, marketers tend to over-promise. We make claims that our company does not support. We lie.

But in today’s world, those lies will come back to hurt your business in a bigger way than before. Negative reviews spread like wildfire. Unhappy customers are handed megaphones.

The rest of your company needs to know what marketing is saying, and marketing needs to know what the rest of the company is actually doing. When both sides are on the same page, sales will lead to happy/satisfied customers who will help you market your company instead of inhibit it.

Consumer Thinking as a Marketer’s Best Friend

As consumers, we make many different decisions on a given day. We may choose to shop at one retailer instead of another, online instead of off, product A instead of product B. The reasons we make those decisions will vary, from decision to decision, and from person to person.

It’s the marketers job to try to hone in on those decisions, and even better, hone in on the reasons behind them. Once we do, we isolate common themes and figure out what most people are thinking when they make the decision to choose our product over the competition, or the other way around.

We then take that information and use it in our messages, rephrasing it to tell consumers what they want to hear.

For example, I wrote a post a few weeks ago about Verizon Fios and their ads about the speed of their network compared to others. Verizon knows that many customers that are unhappy with their internet are unhappy because it’s too slow. And so they use that knowledge to deliver a message that is more likely to trigger something in a consumer’s mind, more likely to get their attention, because it’s something that they have thought about in the past.

It’s amazing to me that so many companies talk about this benefit and that benefit of their product or service with no idea what it is that consumers want to hear. Even if you can’t afford expensive marketing firms, surveys, or focus groups, you have a whole world of consumers at your fingertips. Social media has broken down those barriers between companies and consumers.

Want to know what your customers are thinking when they buy your product? Ask them.

Customer Service in a Consumer Driven Market

This blog was started with one general philosophy, and has evolved from that. In the beginning, it was based on the principle that the world now works in a very different way than it did in the past. Consumers are in control for the first time, and companies are slowly realizing that. What happens after they realize that is up to them, some are running for the hills, some are fighting back, but the successful ones are embracing it.

The other day I stumbled across this great infographic, which highlights one area where the new consumer-driven market is most noticeable, customer service. Enjoy!

Click to enlarge