The Number One Killer of Customer Loyalty Is…

It’s been well established that customer loyalty is a fickle concept - if it exists at all.

That being said, you can find any number of articles and thought leadership pieces on how to earn it. Many of them are useful, though it’s important to always keep in mind the uniqueness of every brand and customer base.

There just isn’t much knowledge that can be applied across the board when it comes to earning loyalty.

When it comes to preventing loyalty, however, there are a lot of shared characteristics.

At the top of that infamous list isn’t a bad product, a lack of a defined loyalty program, or even high prices. Those will certainly chase some people away, or prevent them from buying in the first place.

There are companies who offer great products at great prices, yet consumers are ambivalent about them at best.

It’s because it all comes down to the customer experience with the people behind a brand.

Those experiences become the brand itself. They alter how customers view the brand. 

Whether it’s a customer service representative, the person at the register, or even the “person” behind an automated registration email, personal interactions have a massive effect on an individual’s perspective.

Personal interactions aren’t just the top killer of customer loyalty, it’s arguably the top builder of it as well.

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Customer Service as a Personal Expression

Everyone has something to sell. Great products are enough to grasp a certain level of affection from customers.

The human experience, however, is the representation of how much a brand truly cares about the individual. 

In most surveys about why people defect from brands, or what they love about brands, customer service - the primary arena for interpersonal interactions - is always at or near the top:

  • Shoppers who notify retailers of their poor experience and had their problem completely resolved were 84% less likely than silent shoppers to be at risk of decreasing their spend (LoyaltyOne)

  • 70% of customers cite poor customer service as a reason for not buying from a brand (McKinsey)

  • 76% of American shoppers view customer service as a "true test" of how much a brand values them (Aspect Software)

  • For every customer experience failure, brands lose an average of 65% of the revenue they would have earned from the affected customer during the following year (SDL)

  • 51% of U.S. consumers switched service providers in the past year due to poor customer service (Accenture)

  • 78% of consumers have bailed on a transaction because of a poor service experience (American Express)

  • 70% said they would remain loyal to certain retailers because of good customer service (PriceGrabber)

(These stats were pulled from our comprehensive collection of customer loyalty statistics.)

With 75% of the workforce disengaged, you can decipher a major reason why 78% of consumers don't consider themselves loyal to any particular brands.

The employees don't care, so why should the customers?

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Every Interaction a Pivot Point

Every interaction with a customer is a crucial pivot point that can help someone fall in love with a brand or send them to the nearest online review site to boil up a few 1-star critiques. With the right personal interaction, even the angriest customer can become a softy.

That means companies have a double sided impetus:

First, to invest in customer-minded employees, and training that reinforces positive traits.

Second, to enable - not dissuade - interpersonal encounters as often as possible. Seek feedback, personalize as often as possible, be responsive, etc.

As we’ve mentioned, Starbucks spends more on employee benefits than coffee beans. Their product is great, but their personal experience is even better. The combination of the two is what keeps people coming in every day, even though there’s cheaper coffee to be found all over the place.

This issue has much to do with the current not-so-great state of customer loyalty, but the tide is turning. Powerhouse brands such as Walmart and Chipotle are following the lead of Starbucks, Whole Foods, and Gravity Payments and investing in people.

As more brands turn to the online model of “DIY customer service” through FAQs and Troubleshooting documents, companies that invest in creating great touchpoints are going to stand out in customer’s minds.

The more the individuals in a brand take on that customer-centric persona, the more it becomes the persona of the brand.

Let personal interactions become a loyalty killer for other businesses. For yours, they’ll be the loyalty builder.

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(Queue line image by Xiaojun Deng)

Topics: customer loyalty

Written by: Brandon Carter

Brandon is a former writer and marketer for Access Development. He's a frequent blogger on customer and employee engagement & loyalty, consumer trends, and branding. Connect with him on LinkedIn or Twitter at @bscarter

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