The Two Types of Loyalty, and How to Earn Them

Summary: Learn about transactional and emotional loyalty, and how to earn them. Understand the importance of member involvement, empowerment, and recognition to build emotional loyalty. Discover the science behind emotional loyalty and the key behaviors that connect organizations with their members on a deeper level. Find out how engagement and communication build loyalty.

About a 6 min read

After weeks of eager anticipation, I finally got the chance to whisk my better half away to this Greek hole-in-the-wall restaurant that I absolutely loved.

It was like stumbling upon my own little slice of heaven, nestled in a nondescript strip mall just a short drive from home. The moment we crossed the threshold, I could feel it in my bones - this was going to be an unforgettable experience. The food was out-of-this-world delicious, the service was as warm and welcoming as a big hug, and to sweeten the deal, the prices were shockingly cheap.

It was a match made in foodie heaven.

I couldn't contain my excitement as the food arrived at our table. Watching her take that first bite, I was practically on the edge of my seat, eagerly waiting to see if she would feel the same magic and delight that I did for this little Greek gem.

But as she chewed, her expression remained neutral. I couldn't resist asking, my voice tinged with optimism, "It's amazing... isn't it?"  My voice lilted up, prompting her to respond.

"It's okay" her eyebrows raised in apprehension. Then she threw me a dagger..."it's kinda bland."

I felt a pang of disappointment as my wife didn't quite share my level of enthusiasm for this delightful restaurant if was in love with. While she didn't despise it, she simply didn't have the same love affair with it as I did.

But our experiences serve as a gentle reminder of the two primary types of loyalty in the world: transactional loyalty and emotional loyalty. 

Transactional Loyalty vs. Emotional Loyalty

Emotional loyalty is the ultimate form of loyalty, where people are devoted to a particular brand regardless of price, convenience, or other external factors due to their deep personal connection with the brand. In my case, I developed a strong bond with the restaurant because I was one of their first customers, had the chance to meet the owner and establish a connection, and, of course, the food was absolutely amazing.

Transactional loyalty, on the other hand, is slightly different. It typically involves members who join simply for the value you offer through your benefits and services.  But when their circumstances change, or they don't see the value in being a member, they'll bail in a heartbeat.

In the retail world, it's much like a new retailer opening a store even closer to home or offering similar food at lower prices, customers may feel enticed to spend their money elsewhere. In the case of my wife, she chooses to dine at "my" Greek restaurant because of its convenient location and the fact that the food is satisfactory. (Although, I may occasionally persuade her to join me.) However, if there were another Greek restaurant that was closer to home or offered better value, she would be more inclined to try it out.

These type of transactional members may seem fickle, but their loyalty is often underrated. I mean, come on, any loyalty is a good thing, even if they're not totally in love your your mission, your organization's advocacy, or the functionality of your website. We all daydream about having an organization that caters to the needs of the masses, but let's face it - every member is different and every member's experience is unique. But here's the kicker, most emotionally loyal folks probably started off as good ol' transactionally loyal member.  It just took them a while to come around.

Emotional loyalty is the summit of the mountain, though. That's when people go out of their way to renew, advocate for your organization, and amplify your goals and message. It's when they feel like they're an important part of your organization and they want others to feel the same.

The Science of Emotional Loyalty (or Lack Thereof)

A recent Nielsen survey showed that 78% of consumers are not loyal to a particular brand. Purchasing decisions are being made less and less on emotion and more on a cold, hard ratio of pure bang-for-the-buck - just 25% of US consumers consider brand loyalty as something that impacts their buying behavior, according to Ernst & Young.

The same goes for emotional loyalty among member-based organizations, it's hard to come by and hard to keep. As mentioned earlier, a focus on retention vs. acquisition is an organizational commitment. It requires great member experiences. It requires an organization that delivers on it's promises. One that delivers on it's value proposition, and works to keep it's benefits and services relevant and fresh. 

Emotional loyalty can't be purchased, but it also isn't entirely earned either. If there was an absolute formula for it - well, you wouldn't be reading this because you'd already have it figure out. Right?

Four Emotional Loyalty-Earning Behaviors

While there isn't a definitive science to earning emotional loyalty, there are some best practices that organization's can implement to establish a deep connection with their members. By incorporating these four behaviors into the core values of your organization, you'll have have a greater potential to win over a larger number of emotionally loyal fans.

1. Member Involvement

People need to know the organization that spends the money they pay for annual dues. What are your true values? Is there a disconnect between what you say and what you do? Do your values match theirs?

A bit of organizational transparency goes a long way to help your people feel like they're part of the overall effort. This is especially true for young adults, 80% of whom prefer to support organizations that support a worthy cause.

This also means being an organization that is highly responsive to a member's needs. Poor member service is often the main reason why people stop renewing. If members are dissatisfied with any aspect of your organization, it is critical that you have a mechanism to gather feedback and, most importantly, address their concerns. It may seem obvious, but many organizations still struggle with this basic function. They have never or rarely survey their members. They have no established feedback loop,  and they are constantly up-selling members and failing to deliver on their overall value. 

2. Member Empowerment

Make it your mission to embed your product or service into the lives of your members. That means constantly engaging with them and creating opportunities for them to become experts in advocating for your organization,  Invite and involve members to shape every aspect of your organization, from member benefits, activities, online communication, member engagement, and marketing.

This point also goes back to number one - members need to feel like they have a say. If an organization wants its members to go all-in on loyalty, the entire organization needs to go all-in on serving member's needs.

3. Member Recognition

Members crave personal recognition and a sense of importance. This can be achieved through various tactics such as your staff making an effort to learn and use members' names and preferences. Use strategies that humanize your brand and foster strong relationships with members. Admittedly it's challenging to scale, but even a limited effort for a select few will undoubtedly prove to be worthwhile.

4. Member Loyalty Programs

On a grander scale, loyalty programs are a fantastic way to achieve ongoing member engagement. Now, I know some may dismiss loyalty programs as simply "buying" loyalty, but let's be completely practical here. A well-crafted, thoughtful member loyalty program can drive overall value, help your organization stay top of mind, and give you legitimate reasons to communicate with members more frequently.

Constant relevant communication that provokes engagement is an increasingly critical element of member engagement and loyalty. As mentioned earlier, loyalty is in part a result of frequency. Emails, texts, branded apps, mobile coupons, and even e-newsletters are all important to cut through the clutter and remind people of brand value.

Members are more and more aware of the value you offer, so, incorporating an effective loyalty program into your organization, demonstrates that you genuinely care about your members, and that's key to capturing both transactional and emotional loyalty.

The Engagement Factor

The bottom line is members need to know how they're being impacted by associating with your organization. You'll be able to form a meaningful relationship when members feel appreciated and reciprocated.

In the future, my wife might develop a stronger connection with the Greek restaurant. A life-changing souvlaki might not be necessary for this to happen. It could simply be because she is close to someone who advocates for the brand (me!), or it could be that the owner knows her by name and offers her complimentary appetizers that he thinks she will enjoy.

Or, she may never go beyond the occasional customer who stops in for a convenient take-out dinner. But she's still a pretty good customer to have. 

And while transactional members are focused almost exclusively on your organization's value proposition, when you're paying attention to the value you offer, then those members will  keep renewing year after year.

And those transactionally loyal members are pretty good members too.