Tag: customer loyalty

Expressing Gratitude to Loyal Customers

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My favorite holiday, Thanksgiving, is just around the corner. This is a great time of the year for companies to send out words or gifts of appreciation to their loyal customers. The insurance company AMICA sends out artistic Thanksgiving cards to their customers every year; many real estate agents send out fresh calendars for the next year to their clients; and I once even received a BIG can of popcorns as a customer appreciation gift during this time of the year. Are such gestures beneficial for companies? How should such thank-you’s be conveyed? In this week’s post, I pull academic research on gratitude to shed some light on these questions.

Feelings of Gratitude

According to philosophy and social psychology research, gratitude is an important emotional foundation for sustained reciprocity in human relationships. When an individual feels gratitude, he or she is motivated to repay the favor by conducting an act of kindness in return. Many of us probably still remember the paying it forward story at a Starbucks in Florida a few years ago. It started with a woman offering to pay coffee for the customer behind her, who then passed on the kindness by paying for the next customer. This chain continued unbroken for a total of 378 customers. That is the power of gratitude. In a bilateral relationship between a customer and a company or brand, feelings of gratitude can provide the drive to sustain a trusted and committed relationship and increase customer loyalty.

Gratitude Needs to be Expressed

The feeling of gratitude has a unique social component that prompts it to be expressed. In an eloquent essay written by Dr. James W. Ceasar, he describes gratitude as having developed into an objective standard of behavior. In his words, “Gratitude has a social aspect and is incomplete if it does not include the act of acknowledgment”. Or in more plain words, not saying “thank you” when someone has done something nice for you is just rude. Although much of Dr. Ceasar’s arguments relate to political and social domains, they are just as relevant to customer relationships. It is not quite enough for a company to claim its commitment to its customers when it does not properly express its gratitude to customers. Continue reading “Expressing Gratitude to Loyal Customers”

Turn Loyalty into Habit and Habit into Loyalty

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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. Continue reading “Turn Loyalty into Habit and Habit into Loyalty”

An Ambush on Customer Loyalty

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I’ve always liked Delta Airlines. In my perception (perception is reality, right?), Delta has nice airplanes, friendly staff, and generally good service all the way around. I consider myself a loyal customer of Delta. With the exception of mandated price shopping for work travels, I always like to look at Delta first when I need to go somewhere. But my recent service issue with Delta caught me completely by surprise. It made me question if I had misplaced my loyalty this whole time.

The Delta Luggage Incident

It was something simple really. While coming back from my international travel, I rechecked my luggages at the New York JFK airport for the last domestic leg of my long flight home. When I reached the destination, two of my three checked-in luggages showed up on the conveyer belt, and the third one did not. I filed a claim with the Delta baggage service right away and was informed that Delta would contact me for delivering my luggage. In the days that ensued, I checked the online status of the luggage regularly. Unfortunately it never changed.

Delta Online Baggage Status

After 10 days not seeing any change and not hearing anything from Delta, I finally picked up the phone to call Delta. Having to hold for half an hour on the phone and still no one on the line, I reached out to Delta via Twitter instead. Luckily that got me a faster response than the good ol’ phone. In a few minutes of messaging with the Twitter service rep, I was informed that the status means that my luggage was in the security area. The rep asked what the luggage looked like and what was in it. I told him/her that it was a smart balance scooter (like the one you see at the top of this page). This was when I was informed of a Delta policy that I had been complete unaware of previously. The screenshot of the stated policy is shown below. Continue reading “An Ambush on Customer Loyalty”