Recently I was interviewed by the creative minds at Venables Bell + Partners on the topic of customer habit and loyalty. One of the questions asked was how businesses can turn loyal customers into habitual customers and vice versa. That conversation inspired me to write this blog post, to share with you how a business can bring loyalty into habitual behavior and vice versa develop loyalty into automatic habits.
Why Do You Want To Turn the Customers?
Why would your business want to turn one type of customer into the other? Consider Jane, who loves your brand and is a loyal customer. She purchases your brand heavily and is in the top 20 percentile in terms of her spending. A paradoxical fact about loyal customers like Jane is that they are also often the most demanding customers. They negotiate the hardest and have the highest expectations because they have been so “loyal”. By encouraging Jane to become a habitual customer, you help make her brand choice process more automatic, reduce her overthinking, with the added bonus of having more regular, predictable behavior.
Now imagine the opposite case. Tom is also a frequent customer. He visits your store and buys your products habitually, but he does not have strong opinions about your store one way or another. I know what you are thinking. “Wait a minute! How is it possible for Tom to buy so much without liking you a lot in the first place?” You are certainly right that habit a lot of times evolves out of our passion for doing something. Over time, it becomes a habit. But for many products and services, consumers don’t necessarily care enough to want to choose the very best. Instead, they try the first thing that is available. It works reasonably well. They don’t care enough to go search for a better alternative. So they settle down right away and repeatedly buy that first product, eventually becoming a habitual buyer.
The above is just one example of how you can have a habitual customer who buys a lot but does not have strong feelings for you. Why do you want to turn someone like that into a loyal customer? The reasons are pretty straightforward. It could be a defensive move. If Tom loves you, he may not be so easily lured away by your competitors. He may also be more inclined to try other products from your brand. When unexpected things happen that disrupt his habit, you can hopefully have his loyalty to fall back on to keep him buying.
Turn Loyal Customers into Habitual Customers
Now that we are clear about the reasons behind turning one type of customers into the other, let’s look at how it can happen, first for Jane. As I described in my previous three-part series on consumer habit, habit requires two components: high frequency and stable context. Since Jane is already a loyal customer, you likely already have the frequency piece. What you need to facilitate is tying your products to some contextual cues (location, time, social setting, what happens before or after). Below are some things you can do to help make that connection:
- Embed the same contextual cues in your ads and other marketing messages. For example, use the same dinner scene with your products across different messages, to help build an automatic association between dinner and your products.
- Incentivize consumers to buy or use your product during a specific time of the day, e.g., between 2-4pm. Build repetition into the incentive (e.g., buy between 2-4pm every day of the week and double your points) so that consumers will be motivated to repeatedly do what you ask during the designated time period. Be careful though to make the incentives attractive enough but not so large as to make consumers too driven by the reward.
- Place your product or reminders of your product in physical or time proximity to what consumers may already do habitually in their life. For example, geo-target customers near a gym to capture those with an exercise routine to visit your healthy juice store every time after working out. Or send flash deal emails to stay-at-home parents around the time of school drop-off in the morning to foster the habit of checking out your website everyday after dropping off their kids at school.
Turn Habitual Customers into Loyal Customers
How can Tom be turned from an indifferent habitual buyer to a loyal customer? This involves a multi-step process.
Step 1: Ask Tom what he thinks about your brand. People tend to infer their opinion about something from their own behavior. Since Tom does not have a clearly formed opinion about your brand, if we were to ask him about how he feels about you, he may simply infer from his frequent purchase of your brand that he must like you enough.
Step 2: Provide reinforcement. The sense of loyalty generated from step 1 does not have a solid foundation and tends to be short-lived. You need to provide follow-up actions and facts to help Tom confirm that he is actually not wrong with his conclusion. These can be simple things such as an exceptional customer service encounter, a note of appreciation, a prompt from a friend also expressing liking of the same brand, or convincing proof of the superior quality and value of the products. These evidences will help convince Tom that he’s been right all along. After all, we all like to be right instead of being wrong.
Step 3: Rebuild habit. By this point, Tom should be well on the way to becoming a loyal customer. However, because your earlier steps made Tom more self-aware about your brand, there is a danger that you have disrupted his purchase habit. So as the last step, you need to help sustain and rebuild his habit. This step may become an opportunity to modify his old habit to include new routines, such as buying an additional line of product. See Part 3 of my habit series for some ideas on that.
By now, I hope you have realized that by turning customers from one type to another, we are not replacing one with the other. That is, we are not trying to get rid of habit and replace it with loyalty, or the other way around. Instead, we are trying to foster customer relationships that are built on both loyalty and habit. If you can achieve this goal, you will end up having a stronger group of customers. Not only will it offer you more immunity to competition, but it will also give you more flexibility in terms of marketing messaging and tactics.