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Monday, January 21, 2008

Why you don't want loyal customers

When marketing to an mass audience or demographic, you want to own them. You want to be top of mind, the first (and only) thing consumers think of and purchase in your category. You want loyal customers. If you can get someone to buy your product for the rest of their life, you've won the game.

Customer loyalty plans are one of the tactics companies use to achieve that victory. Airlines, the most prominent example, have defined what a customer loyalty program looks like. But, other industries have grabbed the idea as well. In this post, I'm defining loyalty in terms of these programs. In this model, customers are a mercenary force built on promises of future rewards for sticking by your brand. They may not like your stuff but they have an invested interest in continuing to use it.

In the world of social marketing, the keyword is community. Community is not a new marketing term for the old audiences and demographics. When marketing to a community, loyalty is not the goal. When marketing to a community, creating or attracting passionate consumers is the goal.

User-generated content is an sign of passion. Re-mixing content is a sign of passion. Starting a blog based on your product is a sign of passion.

Why strive for a passionate few over the loyal many when marketing to a community? Because communities that make it easy for people to be passionate will strengthen brands -- and provide a positive feedback loop on consumption of products. Rather than the company providing the incentive (aka loyalty program) the community itself encourages continued use of the products. even as individual members of the community change.

That's the easy question.

The hard question is: Why can't I have both passion and loyalty?

Wouldn't the ideal scenario be to have an ever expanding community in which the passionate customers continue to evangelize to to the swelling ranks of loyal customers until an uber-community is created that encompasses everyone possible (per the mass marketing model)? My answer is: No, that is not the ideal scenario.

Reasons why passion and loyalty cannot co-exist:
  • You can't please everyone. And when you try, you are rushing towards mediocrity.

  • Passion in an interactive environment like a community naturally engages some people and turns others off. In this case, you can hope the customers turned-0ff will just stop engaging but keeping buying stuff... I don't think I'd write that into a business model though.

  • Paying for people's loyalty isn't enough to make them say nice things about you.

  • Familiarity breeds contempt. While, that's a bit extreme, the more chance for contact that a customer has, the more chance they also have change their opinions about the product.
  • Communities must to change if they are going to survive long-term. This is an extension of the idea of giving up control of your message/brand.
Companies will have to give up the loyalty of their consumers as they build relationships through communities. And community members will come and go, bringing and taking people with them. And, that is OK.

Links tagged in no+loyalty