Customer Loyalty Boomerang Effect

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Customer loyalty is important to business success. Profitability of customer retention is pretty much common knowledge. So companies do a lot to encourage customer behavior that favors their brand, to increase:

• Purchase frequency and volume
• Involvement and structural ties
• Recommendations of the brand.

Yet, like most things in life, loyalty is a two-way street. Who are you loyal to? "Loyalty by its very nature demands that we commit ourselves to a person, group, or cause," explain Timothy Keiningham and Lerzan Aksoy in their book Why Loyalty Matters. "We suppress our short-term self-interests to maintain our bond. In its most noble form, we serve a cause greater than ourselves, designed to unite with another."

What and who do you consider to be greater than yourself? The answer to this question reveals the shallowness or depth of loyalty in your environment.

Customer Loyalty
Are you personally loyal to your customers? Is your whole department loyal to customers — both internal and external, with an emphasis on the external ones who ultimately make your payroll possible?1 If not, we may be subconsciously expecting customers to "serve a cause greater” than themselves – us! If we really think about it, the company exists because of customers, not the other way around, so this line of thinking makes the customer “a cause greater than ourselves".

Reciprocal customer loyalty is not limited to customer-facing employees. A company is a team. Everyone's attitude, decisions, and behaviors have a ripple effect on customers.

How do you (individually and collectively) demonstrate your loyalty to customers? What happens when you're stuck between a rock and a hard spot, so to speak? Do you "suppress short-term self-interests" to maintain your bond with customers?

Companies' reports to stockholders and industry analysts frequently tout satisfaction and net promoter rankings. In some cases, stellar customer-centric performance is indeed a hallmark for the business. In other cases, the benchmark may be the prevailing mentality among competitors, which may not at all reflect what customers actually perceive as being focused on their best interests. It's worthwhile to conduct occasional reality checks!

Personal Loyalty
"Our loyalties demonstrate what we value, what we believe, and what we want our world to be", explain Keiningham & Aksoy. "Loyalty requires deliberate effort, constant practice, and conscious employment. … Being loyal is the manifestation of the choices we make in life. … And for the world at large, it is the small yet numerous acts of loyalty or disloyalty that help determine the kind of communities in which we live."

Laws of congruence imply that it may not be possible for reciprocal loyalty on a professional level without actively practicing loyalty on a personal level. Consider loyalty among your friends, family, community, faith, and fellow citizens. In this age of instant gratification, it's easy to become self-centered and discount the value of relationships and time-proven principles. It's worthwhile to conduct occasional reality checks with all your relationships, and strive to continually improve relationship skills. You may enjoy richer ties in all facets of life, with spill-over benefits of customer retention in your business.

Boomerang Effect
Huge budgets and efforts are dedicated to enticing customers to be loyal to businesses. And according to the two-way street theorem, reciprocal loyalty by companies to their customers is key to sustainable return on investment.

¹Note: a careful analysis of this is essential, as it's not just about who deposits money in accounts, but rather, those who are at the end of the line as recipients in the chain of your services and products — even for non-profit and government entities.

²The book includes a code for complimentary access to the LoyaltyAdvisor online assessment, which provides an evaluation of how you view your loyalties, and how your friends and family view them, to help improve your bonds with others.