Is Customer Loyalty a Fantasy?


Let’s start with the clarion call for CMOs: Nine out of 10 marketing leaders are expected to grow revenue this year, says the CMO Council. Only a third of C-suite executives feel very confident in marketing’s ability to deliver the goods. Will marketers hit their numbers?

Truth is, repeat sales from loyal customers won’t get them there — not even close.

Yet customer loyalty continues to be in marketing’s crosshairs. According to an Ascend2 2021 survey, the top marketing objective of a strategy for using data to make decisions is to increase customer loyalty. This comes on the heels of a McKinsey Consulting report that found many Americans were disloyal to brands during last year’s rush to digital channels, which, of course, was spurred by the pandemic and shelter-at-home directives.  

“The crisis has prompted a surge of new activities, with an astonishing 75% of U.S. consumers trying a new shopping behavior in response to economic pressures, store closings and changing priorities,” McKinsey says in a report. “This general change in behavior has also been reflected in a shattering of brand loyalties, with 36% of consumers trying a new product brand and 25% incorporating a new private-label brand. Of consumers who have tried different brands, 73% intend to continue to incorporate the new brands into their routine.”

Herein lies the problem.

All of marketing’s pre-pandemic efforts to build loyalty went for naught, as customers clicked away in search of better product availability and prices. Moreover, in a CMO Council survey, 65% of consumers said digital engagements during the pandemic weren’t exceeding expectations. A vast majority (87%) found it frustrating when having to repeat themselves in multiple channels. This frustration led to 73% questioning why they were spending with the brand in the first place. 

Related: Download our latest report, The Exponential Power of Collaborative Marketing

Time and again, consumers abandon brands if the customer experience doesn’t meet their sky-high expectations. Or they jump to a competitor just to save a few dollars. Take the airline industry, for example. Airlines have made strides to provide a better customer experience, yet most customers continue to pick flights solely on price. 

Customer loyalty programs aren’t so much about building a relationship as it is about offering incentives and rewards to get consumers to stick with a brand. This doesn’t engender loyalty — it’s purely transactional.

Is it human nature to be fickle? 

“I recently read something on that made me sit up straight,” writes Raja Rajamannar in his book Quantum Marketing. “According to the article, 75% of men and 68% of women admitted to cheating in some way, at some point in a relationship. … If they are not loyal in their personal lives, are we fantasizing that we will generate their loyalty to our brands?”

Nevertheless, marketers persist with customer loyalty. That’s because it’s an investment of marketing resources with the surest attribution to revenue. After all, repeat sales from existing customers enrolled in loyalty programs are easy to track. There’s also the idea that loyal customers make great brand advocates and can help fill the funnel through online product review sites and social networks.

Clearly, customer loyalty has value, but how much? There’s no question customer advocates influence new sales and provide air cover against bad publicity. Nielsen research shows that 84% of U.S. adults belong to some type of loyalty program, which provides a wealth of customer information. There are real business benefits reflected in customer lifetime value. 

But customer loyalty is a long game with incremental returns, while the pressure to grow revenue in a big way is happening right now. When marketers look to loyalty and repeat buys, a CMO told me recently, they’re playing it safe. Don’t get me wrong: Customer loyalty should be part of the marketing strategy, but marketers need to prioritize new sales.

To convert new logos, marketers have to get out of their comfort zone and take risks. They should be aggregating data to better identify and segment new customers and leveraging analytics to gain actionable insights into shifting buyer behavior. CMOs should also be exploring potential partnerships, acquisitions and other strategic pathways to exponential revenue growth.

All of these profound marketing activities tower over customer loyalty. Under the revenue-growth dictate, CMOs should be aiming the digital experience at customer acquisition, not so much customer retention.

This article first appeared in

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