Real Loyalty vs. Deal Loyalty (part 1)

Note: This is an “encore” post from our Loyalty Leaders blog…

Let’s discuss something fundamental to customer loyalty. When you break it down to the basic of basics, customers are loyal to your brand either because you pay them for it or despite the fact that you don’t. Let’s call the former “deal loyalty” and the latter “real loyalty”.

By the way, “deal loyalty vs. real loyalty” is not an original tag. I heard it back in the late 90′s during a DMA keynote by Larry Light, CEO of Arciture, LLC. Larry went on to become global CMO of McDonald’s and helped turn the brand around. That phrase has stuck with me ever since.

Where were we? Oh yes. Real loyalty. There are precious few businesses that can maintain customers despite price pressure. The reason is that real loyalty is very hard! It goes beyond what we marketers call “customer experience”. Real loyalty comes about by having a true commitment to providing value that goes beyond price. The only exception is being the low price leader in your category. And unless you’re Wal-Mart, which you’re not, being the low price leader is probably not where you want to be.

Real loyalty takes patience, money, and strong leadership. But most of all it takes strategic thinking and having a strong sense of your customer base. Customers will remain loyal if they are provided something unique. Uniqueness is usually found in products and services. And remember, we can rant and rave all we want about how our products are unique or superior, but what counts is how consumers perceive us – and very often it’s not as superior as we think.

The key to achieving real loyalty is to understand that customers buy emotions. Period. Whether you’re a product company or a service company, remember to separate what you are selling (peace of mind, safety, status, opportunity, comfort, etc.) and what you are delivering (a strategic marketing plan, a bicycle, a web site, an ice cream cone). When you realize what it really is that people are buying from you, then you can start to work on how to gather real loyalty.

The fact is, as marketers, we practice deal loyalty. We may support real loyalty if it’s lucky enough to be embedded in the organization, but the reality is that real loyalty is not in the realm of marketing. Where we get stuck is that we sometimes send the message of real loyalty, when in fact the company does not deliver on it. The foundation for real loyalty needs to permeate the entire organization, which is why it’s so difficult to achieve. It’s about merchandising, operations, and the corporate culture.

OK. Enough typing. We’ll continue this discussion next time. I’ll also provide some personal examples of companies to which I am “really” loyal.

– Jay Weinberg

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