Loyalty's Limits

By Hewitt, Mike | Marketing, January 29, 1998 | Go to article overview
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Loyalty's Limits

Hewitt, Mike, Marketing

All brand owners want it, but what does it mean?

If there was one buzz word which defined 1997 for marketers, it was loyalty. No marketing director was content until he had launched a loyalty scheme. We all learned that it is much cheaper to keep an existing customer than to acquire a new one, and we read Don Peppers until our eyes ached.

Maybe the new year is a good time to step back and think about whether the headlong rush into loyalty schemes has gone too far. In our enthusiasm to embrace the idea of 'customer loyalty' with cards, points and prizes, are we not in danger of forgetting that loyalty can't be bought that it has to be earned?

As late as November, at Marketing '97, loyalty was the main theme of many of the conference papers. One of them contained a pithy definition of just what a loyalty scheme is. According to professor Steve Worthington of Staffordshire University: "A true loyalty programme is a card-based scheme that links a consumer and an organisation in a long-term, mutually beneficial relationship based on an exchange of information and rewards."

Interestingly enough, in a survey which Marketing commissioned from NOP, we discovered that 59% of Britons have at least one of these cards. I have plenty myself - I am the Viscount Althorp of the supermarket aisles - and that's true of many users of loyalty cards. We pick them up, we may even use them, but we're not loyal in any true sense of the word. In fact, that same survey suggested that only 26% of those who have loyalty cards for stores visit them more often.

So I'm at odds with professor Worthington. True customer loyalty has nothing whatsoever to do with plastic cards. Let's forget all that marketing stuff for a second and think about what real loyalty means.

To do that, we need to forget marketing for a moment and go back to an age when our culture's ideas about loyalty were being formed.

In the tenth century, a small band of Saxons fought a pitched battle against Viking raiders at Maldon in Essex, just half a mile from where Marketing is printed. They were local men, called out in defence of their homes by their lord. He was killed early in the battle, and from that moment, every Saxon on the field was doomed to die, because it was the greatest disgrace to return alive if your lord was killed.

One of the oldest warriors, Byrhtwold, gave us the lines of Old English poetry that summed up the idea of loyalty which prevailed in Britain until the advent of the plastic loyalty card. In the poem written about the fight, The Battle of Maldon, he is quoted as calling out, while his comrades died around him: "Courage must be the firmer, hearts the bolder, spirit the greater, as we grow fewer."

Great words. Now which of us would willingly die for our grocer? The fact is that loyalty has become a debased currency.

Loyal customers are only 'loyal' as long as you deliver the goods. That isn't to say that some sort of loyalty does not exist among regular purchasers of a product or service, but it certainly isn't the unquestioning loyalty that some marketers would like to believe is possible.

Stand by your brand

Loyalty in the marketing sense may not mean giving up your life, but it surely must mean sticking with a brand you trust even when it's more convenient or cheaper to go elsewhere.

I drive past a Sainsbury's store to get to my nearest Tesco. My decision to do that isn't based on convenience, or price - I have loyalty cards for both stores - but on a perception that the experience of shopping at Tesco is more pleasant that it is at Sainsbury's. The points I collect are an added bonus, but they're not the deciding factor.

A card only works if this sort of loyalty (with a small 'l') has been built up first. And you can't buy that with discounts - you have to earn it. How?

Anglo-Saxon Poetry is not what you would usually expect to read in Marketing, so let's come right down to earth with a shiny new acronym: KERF.

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Loyalty's Limits


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