Six Myths of Customer Loyalty

Was attending a conference recently on Loyalty, and came across an interesting presentation from the team at Corporate Executive Board, outlining the myths of customer loyalty. This of course is based on extensive global research and inputs provided by leading firms, and offers a refreshing perspective.

Am also elaborating on each of the myths with a summary interpretation and perspective

Myth 1: A satisfied customer is a loyal customer : Proactive v/s reactive being the key message

Myth 2: Loyal efforts help you retain business, not acquire new business : Principles of WOM (word of mouth) shall prevail at all times, hence the benefits of customer loyalty in generating new business, though possibly not clearly measurable at all times, definitely works

Myth 3: Loyalty efforts should focus on the attributes that customers say are most important : Functional attribute requirements arising from customer / consumer dialogue and research are important. The tipping points however lie in the latent emotional support and benefits.

Myth 4: Enrolling a customer in a loyalty programme will result in loyalty : Logical.....

Myth 5: Developing personal relationships with customers is the best way for sales to drive loyalty : Personal relationship is par for the course. Making the extra effort in understanding the client's business drivers, goals & objectives, and even challenging the client is what makes the difference.

Myth 6: Employees who don’t face customers cannot affect customer loyalty : EVERYONE contributes and can make a difference. Enhancements in invoicing design can make an impact as much as a smiling sales executive.

Am also going to be shortly publishing another listing of myths in the context of loyalty programme design, but in a lighter vein
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The Social Edge

Tasti D-Lite, the New York Ice Cream Parlour Chain, has launched a unique social twist to its loyalty programme.

Now it's loyalty customer base can earn extra points by allowing Tasti D Lite to send out tweets on their Twitter and Foursquare accounts. Customers can earn an extra point every time they purchase ice creams at Tasti D-Lite!

A novel and interesting twist on leveraging the power of social networking to the advantage of both the brand and its loyalty customer.

Napolean Hill, Chris Brogan and The Year Ahead.

Over the recent holidays, my friend Bill Hanifin pointed out a post written by the person arguably at the forefront of the whole social media movement, Chris Brogan. In the post, Brogan said, “People are slowing down to turn their thoughts to family and to their own development, and to what worked and what didn’t in 2009. Not me.”

While he did leave an escape hatch for those choosing to bail out during the holidays, “You don’t have to do it this way”, Brogan was working as hard as ever, holidays or no holidays.

It got me thinking about Napolean Hill, author of the classic Think and Grow Rich. Although it was first published in 1937, the book’s message about gaining monetary success through hard work, determination and positive thinking, still rings true today. The popularity of the book endures as well, as it ranks in the top 1,000 books on Amazon.

What a lot of people may not know is that in 1967, three decades after the publication of his magnum opus, an 80-year old Hill put out a book with a more expansive view of the role of work in our lives. Its title: Grow Rich—with Peace of Mind.

While offering many of the same valuable lessons on self improvement as Think and Grow Rich, Hill adapted his message to basically say, grow rich—but have a life, too. We’re not talking 4-hour workweek here, but Hill did suggest we “make a time budget”.

Spread out over a 24-hour day, his time budget looks like this:

* 8 hours a day for sleep and rest
* 8 hours a day for work at your business or profession (but as your success grows, less work)
* 8 “particularly precious” hours “devoted to things you wish to do, not have to do”

Hill’s suggested list for the final 8 hours includes: “play, social life, reading, writing, playing a musical instrument, tending a garden, or just sitting and watching the clouds or the stars.” (I would add “spending time with family.”)

Hill further amplifies the point with this passage: “Do not let a day go by without taking some time for yourself — some time you spend in pure pleasure, as you see it.” He adds, “With increasing success, increase your hours of pure enjoyment, do not allow these hours to be eaten away by business or anything else.”

God bless Chris Brogan, he’s an inspiration to all of us. But there’s something to be said about the whole work-life balance thing. And while I have personally set business goals for 2010, following Hill’s lead, I’ve set leisure ones as well.

The bottom line: Sure, let’s get rich. But let’s not forget that success is measured by more than the balance in our bank accounts.

This article was originally published on Loyalty Truth on January 11, 2010, and was written by Tom Rapsas, a 20 year direct and loyalty marketing veteran. He can be reached on Twitter @tomrapsas

Tiger, Accenture and a celebrity endorsement gone bad.

Editors Note: This article originally appeared on Loyalty Truth on December 13, 2009. A few days later Accenture announced they had broken ties with Woods.

For me, the most compelling question to arise from the tawdry Tiger Woods scandal isn’t whether his wife will leave him, but whether his corporate sponsors will. In particular, the management consulting company Accenture.

We’re not talking energy drinks or golf shoes here, Accenture is a starched white collar Fortune Global 500 firm that, excuse the analogy, is figuratively in bed with Tiger. In the words of Accenture’s own Web site:

Since 2003, Tiger Woods has been the centerpiece of Accenture advertising. As perhaps the world's ultimate symbol of high performance, he serves as a metaphor for our commitment to helping companies become high-performance businesses.

A metaphor for your commitment to helping companies? Well Accenture, I’m thinking that right now Tiger Woods is not exactly the paragon of commitment.

Yet, a visit to accenture.com a full week after the scandal broke revealed he is still gracing the company’s home page. The headline, over a big color image of Woods apparently looking for a misplayed shot, reads: "Opportunity isn't always obvious." Which, like virtually any headline used with Tiger these days, can be followed up by a punchline. (Sure, opportunity isn’t always obvious. Sometimes you have to go to the back room of a Vegas lounge to find it!)

Naughty behavior is always a danger when using a celebrity as your spokesperson. But the fact is, when using a celebrity, even one as previously squeaky clean as Woods, you’ve got to be prepared for a worse case scenario. In this case, I think it would have been smart for Accenture to put Tiger on the shelf for at least a few weeks or months until the scandal blew over

Accenture’s TV commercials used to end with the line “Just another day in the life of a Tiger”. And if that becomes the perception of the company’s attitude toward the Wood’s scandal—that they’ve chosen to ignore the negative implications of being tied to the Tiger—Accenture is going to turn off more than a few current and potential clients.


Tom Rapsas is 20-year direct and loyalty marketing veteran and heads up Creative Services at Hanifin Loyalty. He can be reached on Twitter @tomrapsas.