In this grueling economic environment, it’s certainly endangered. But maybe loyalty has always been an illusion.
Companies are now looking ever more closely at their customer relationships. This is because they recognize the value of things that can endure—especially during uncertain and turbulent times.
But in today’s “new normal” economic climate, customer loyalty can no longer be taken for granted. And while it may not be dead, customer loyalty shows all the signs of becoming an endangered species. One study from Catalina Marketing reports that more than half of the average brand’s highly loyal customers became markedly less loyal in 2008 than they had been a year before. That’s a scary figure because, as the study also notes, the defection of loyalists has already resulted in some severe drops in company revenue. When a company’s once-reliable fountain of sales and profit shows signs that it’s running dry, there’s reason for real concern.
The question, of course, is whether this is a reflection of the current economic climate—or an underlying characteristic of an emerging new-millennium consumer with a decidedly different mindset. That consumer places little value on brand relationships and will never demonstrate the sort of steady habits and loyalties that marked preceding generations.
Maybe customer loyalty is simply a relic of the past, something that won’t return when the economy rebounds, and a notion that today’s marketers can only view with wistful nostalgia. But perhaps an answer can be found in a deeper dive into the concept of what loyalty really is and what it represents.