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Customer Loyalty is Waning. Do You Know Why?

By: capturecode | Jul 4, 2014

Loyalty is no more the coolest thing these days. While that may sound fine for a buyer, declining loyalties are a nightmare for businesses, which have to be on the lookout constantly for ways to keep their customers happy and encourage them to stay loyal to the brand. Although it is a fact that customer loyalty is waning slowly, the good news is that companies can retain their existing customers with a little bit of effort. But to do that, it is important to understand why customers don’t want to stay loyal to a brand.

 

Waning loyalty a reality

There are a number of reasons why customers don’t trust a brand so easily these days. For one, the businesses aren’t able to meet customer expectations, which continue to get higher and higher by the day. Second, the loyalty programs aren’t very rewarding; instead they can be encouraging the wrong behavior in customers. Increased transparency in pricing, quality and features of products due to digitalization has made it easier for customers to choose what’s best in the market. If you don’t offer the best, expect your customers to go to your competitors.

Loyal customers can disappear quickly

There aren’t many brands that have been able to retain their loyal customers in this competitive world. People don’t trust brands as they used to before and are jumping ship as soon as they get a better offer. For example, Nokia was the global leader when it came to mobile phones at one point. But after Samsung and Apple launched their smartphones, people didn’t think twice before switching brands. What happened to Nokia after that is a story that every marketer is familiar with.

Are loyalty programs a bad investment then?

Does this mean it is a waste to invest in loyalty programs? May be not. Loyalty programs are still a company’s best bet for retaining existing loyal customers and encouraging them to do more business with them. This is possible by designing the right rewards programs and also maintaining the quality of products or services that you offer. Rewards programs will reward even the business, provided the customers are being actually rewarded and not punished.

Loyalty is not entirely gone

The silver lining here is that there is still a section of people who will stay loyal to one or more brands provided they are offered something valuable. Many people who switched to Apple continue to be loyal Apple customers for the simple reason that the brand has been offering a valuable experience to its users through its technological innovations. The experience has to be impressive enough to make the user so comfortable with your product or service that they do not think of another brand.

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