Forever Loyal: Turning Loyalty By Default Into Loyalty By Design

Last week we spoke about customer loyalty and how in many cases even clients that are supposedly loyal to a business are only loyal essentially through habit and not through any more meaningful rationale and are therefore more than vulnerable to rival attacks should their the offer be more attractive or better targeted to their specific set of needs.

Level of Dependence

Simply put the goal of every marketer is to translate weak, uncommitted levels of customer loyalty into stronger, longer term and more intentioned levels of support. To do this you must form less of a transactional relationship with clients and instead start to design ways to migrate across to the strategically based relationship quadrant which by definition is associated with far closer working relationships, higher levels of loyalty by design and ultimately advocacy where the client proactively sings your praises to others. In these situations both client and corporate have a mutual high level of dependence and act intuitively to help, support and protect the other.

 Transactional Relationships

 Imagine the scenario of someone entering a newsagent on a busy weekday, picking up a copy of the daily newspaper and seeing the store owner is busy taking with someone at the counter with other people already waiting in line, makes a hand gesture catching the owners attention and throws the  exact change on the pile of papers adding to the other money that has been deposited in exactly the same way. This example albeit an extreme example, is an example of a purely transactional customer relationship where there is quite literally no relationship, connection or level of engagement between the two parties. Put another way neither the buyer nor the seller really need each other. The buyer can obtain a copy of the paper across the road  at the convenience store and the newsagent will survive if the customer chooses to take their business elsewhere. So the key question remains how do you transition from transactional to strategic?

Strategic Relationships

Now imagine another scenario. That of a product brand manager that is launching a new product and requires a consultant to help them build a promotional product that will help position the product, drive its awareness in a market that knows nothing about it and deal with the vagaries of the market within which it will operate.

This example comes to my mind because at the time I was that product manager launching Australia's first combination anti hypertensive medication Monoplus and tendered out the project to four respected firms but through the process of determining the right candidate, the decision became increasingly obvious each day as the other three positioned themselves as transactional players with a stance of simple in and out, no unique skill, no shared risk, no meaningful differentiation and an eye for price and price alone.

The eventual winner of the tender on the other hand ticked all the strategic buttons. Namely: Sharing in the risk of the project, clearly defined and unique skill sets, differentiated approach and an unmistakable strategic role in the deign and roll out of the package which meant higher levels of barriers to exit for both parties.

I'm pleased to say I was able to convince senior management of my preferred choice and history shows that the launch of the product was an amazing success with the product achieving a staggering 250% of its budget in its launch year.

So moving forward always see suppliers, distributors or clients as being in one or the other of these two discrete groups and make your mind up as to which one s have the potential to be moved effectively in the strategic space because these are the type of relationships that build businesses not simply sell papers.

So until next time, good luck and good marketing.  And of course remember to sign up for any Free workshops you haven't already seen in the Digital Enterprise Program through:
http://www.vecci.org.au/business-solutions/digital-enterprise-program/workshops
where you will automatically qualify for the free, one on one, 4 hour coaching session for your business with a leading marketing consultant.

Regards,
Daniele.