Inertial loyalty

True customer loyalty–as Bryan Pearson points out in his new book The Loyalty Leap–is a function of two dynamics: behavioral loyalty and emotional loyalty.

Behavioral loyalty relates to metrics like share of wallet, RFM score, duration as a customer and the like. Sometimes behaviorally loyal customers are very unlikely to switch. Other times, eh, not so much.

If you had the data you might conclude that I’m pretty loyal to my family doctor, my bank, my cell phone service provider and my most frequently used credit card because they all have a high share of my respective category spending and I’ve been with them a long time. But most of my perceived loyalty is, quite frankly, based upon inertia.

In fact, I have very little emotional loyalty to any of them; each meets my needs just well enough to retain me.  Because I’m busy, because I perceive it’s a big hassle to switch and because it’s not clear that my alternatives are demonstrably superior, I don’t make much effort to explore my options. Of course, if they were to take the time to collect Net Promoter Score (or similar) type data on me, they would realize that my business is fragile, they could understand precisely why that is the case and, most importantly, they could take action to build true loyalty (and perhaps build positive word of mouth while they were at it).

It’s not hard to imagine two potential scenarios that might effect a more immediate defection.

The first is that they screw up badly. When a brand builds emotional loyalty, they get the benefit of the doubt when the inevitable mistake occurs. My quartet of so-so providers won’t get the same pass.

The second is when a new alternative emerges that sufficiently tilts the value equation. Inertial loyalty is no longer tolerated when someone makes it easy and/or powerfully better to switch.

Blackberry looked pretty solid until the Iphone and Android came along.

Blockbuster had pretty compelling market share until NetFlix and Redbox emerged.

And so on.

If you are living off of inertial loyalty you might be in for a rude–and scarily fast–awakening.



Author: stevenpdennis

Steven Dennis is a trusted advisor and thought-leader on customer-centric strategic growth and innovation. As President of SageBerry Consulting, he applies his C-level executive experience to drive growth and marketing strategy for multi-channel retail, e-commerce and luxury industry clients. He shares his ideas and wisdom regularly in the press, as an industry speaker and through his popular blog "Zen and the Art & Science of Customer-Centricity"( Prior to founding SageBerry, Steven was Senior Vice President of Strategy, Business Development and Marketing for the Neiman Marcus Group. As a member of the Executive Committee he drove the company's major growth initiatives, multi-channel marketing programs and customer insight agenda. Before joining Neiman Marcus, Steven held leadership positions with Sears, including Acting Chief Strategy Officer, Lands' End acquisition integration team leader, Vice President-Multichannel Integration and General Manager-Commercial Sales. Earlier in his career he was with NutraSweet and the global management strategy consulting firm, Booz & Co. Steven received his MBA from the Harvard Business School and a BA from Tufts University. In addition to his consulting work, Steven is an executive-in-residence at the JC Penney Center for Retail Excellence at SMU’s Cox School of Business, President of the DFW Retail Executives Association and serves on the Advisory Boards of Invodo Inc. and Nectar Online Media. He is also active in the social innovation and education reform arena as a Partner and member of the Board of Directors of Dallas Social Venture Partners. He is currently co-leader of DSVP's investment and engagement with SMU's Center on Communities and Education "School Zone" initiative in West Dallas.

1 thought on “Inertial loyalty”

  1. One of the things that I’ve observed is that emotional loyalty can go so much further than behavioral loyalty. It drives grandparents to buy certain toys. It can cause someone who hasn’t needed a service in years to suddenly testify for it when he or she meets someone who does need it. Recently I had an email interaction with a sales person where I couldn’t afford the service, and I was stunned by the contempt he showed me. I replied and pointed out that I may be an important customer down the road and could send referrals in the meantime. But he was too busy with the customers he already had… I suspect a shrinking group over time.


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