DEVELOPING CUSTOMER LOYALTY
Let me share a little marketing drill I enjoy using with a group—you might try it with your own teams.

I pass out a folded yellow card to half the group, and a folded green card to the other half. I ask the two "teams" to keep their cards hidden from each other.

Inside, the yellow cards read:

Write 5 reasons why you become loyal to a friend.

The green cards read:

Write 5 reasons why you become loyal to a company.

When I tabulate the answers, here's what I find:

1. The reasons are essentially the same.

2. They are based on basic virtues.

Virtues like honesty, reliability, trustworthiness, sharing, dependability, common goals—a list straight out of episode one of MisterRogers' Neighborhood.

Deploy all the customer loyalty programs you want, spend all the money you care to on CRM tools, go overboard with wining and dining your customers. But without the virtues that inspire loyalty, your company is banging its head against one very expensive brick wall.

Loyalty Is Earned
When companies approach the issue of customer loyalty, they far too often look at it as a tactical exercise—a set of programs executed to create loyalty.

Such activities, alone, get customers to behave as if they were loyal, but that loyalty lasts exactly as long as the promotions last. Once it's no longer profitable to give things away, or offer discounts, or entertain your customers, they start looking around all over again.

Consider this definition—from the first listed result of a Google search on the topic:

Customer loyalty is the result of well-managed customer retention programs; customers who are targeted by a retention program demonstrate higher loyalty to a business

Consider how that would sound if we changed just a few words:

Creating a loyal friend is the result of well-managed friendship retention programs; friends who are targeted by a retention program demonstrate higher loyalty to a person.

Absurd, isn't it?

Creating a loyal customer is exactly like creating a loyal friend. And just as there's little difference between why people become loyal to a friend and why they become loyal to a company, there's little difference between how a loyal friend is grown and how a loyal customer is grown.

Are You Earning Your Customer's Loyalty
Someone becomes your loyal friend because they want to—and they want to because of who you are.

Someone becomes your loyal customer for exactly the same reason.

In other words, in business as in life, loyalty is earned, not purchased.

So, it's time to ask: are you earning your customers' loyalty? For example:

This admittedly "sunshine-and-bluebirds" perspective is essential. Not "how can we entice customers to return," but rather, "what must we become so that customers want to return.

After all, if building customer loyalty were as simple as mining the results of CRM applications or offering discounts or making the right dinner reservations . . . then everybody could do it, couldn't they?

Programs Have Value—When You're Ready to Deploy Them
When you begin to deal with the issues of retention and loyalty, don't begin with retention programs. Begin with an analysis of who you are. Of what kind of "friend" you are to your customers. Sometimes the results can be harsh—you may find that you're a lousy friend, or no friend at all; but that is far and away the exception rather than the rule. You're more likely going to find that you have definite virtues as a company that will serve you well in your efforts to earn your customers' loyalty.

From there, work to further strengthen those "virtues," or, if you need to, change your corporate culture to build them.

Only then are you ready to put a customer retention program into place. Such programs play an important role—but they are the finishing touch: the capstone not the foundation of customer loyalty and retention.

And I'll talk about some of those programs next time.