Last week, in a networking event, someone told me they felt like customers loyalty to the brand feels like a pipedream nowadays.
I think she’s not wrong.
In order to address this problem from the ground up, we first need to determine why customers today are less loyal.
The truth is, in many ways, us marketers have “trained” our customers to be less loyal.
More than a decade ago, performance marketing emerged to address a significant problem in marketing, which was measuring and proving the return on investment of the campaigns. We started measuring how much revenue this type of marketing would bring in, how many customers it would attract, and how much sales it would generate.
However, it was performance marketing that has also made customers less loyal, or to be more precise, the way many businesses execute performance marketing makes customers less loyal.
When the ROI of marketing campaigns is viewed as the end, many of us tend to strive for higher and better numbers.
The problem is that, in chasing short-term figures such as sales and the number of customers per campaign, we have to resort to methods that produce quick and strong results, such as promotions.
As a result, customers are conditioned to only make purchases when there’s a deal or when the price is low and are ready to switch to competitors with better deals.
Excessive promotions also erode brand equity. It’s because now the factor that drive customers to buy is promotions rather than brand differentiation.
We, in pursuit of short-term figures, end up damaging business’ long-term assets like brand equity and customer loyalty. Many businesses get caught in this race to the bottom and lose their long-term assets.
But please don’t rush to condemn performance marketing. I believe performance marketing is one of the best things to happen to marketing.
However, we have to balance short-term figures with the long-term marketing assets of the company, such as brand equity and customer loyalty.
Chasing after metrics alone is not enough; we need to have a broader vision, and especially deeper knowledge about our customers.
Don’t blame them for not being loyal; learn how to earn their loyalty.