Let's stop using the L-word

Jul 14, 2023

It's time to retire the term "customer loyalty" from our marketing vocabulary. In today's fast-paced and ever-evolving business landscape, the concept of customer brand loyalty has undergone a profound transformation. The word "loyalty" and its connotations no longer capture the dynamic relationships between consumers and brands. Here's why.

The underlying social value of loyalty is no longer relevant

Over the last 30 years, major trends in marriage, politics, religion, and corporate America have reframed our expectations for surviving and thriving. The consistent theme is that change is inherently good. The historical concept of loyalty as a value hinged on the social value of the "tired and true." Today, the "new and different" is the usurper. Change wins and "new" is now better than "known." Even thinking itself has changed. David Levy, calls this the 'popcorn brain," to describe a morph of our brains to be accustomed to constant stimulation due to daily use of technology.

Loyalty is an oversimplification at best, misguiding at worst

Some brands still command loyalty -Google, Apple, Tesla etc. For everyone else, the reality is negotiable. The same brand loyalty that your parents and grandparents were used to is gone. Among the top 100 CPG brands, 90% have experienced a sharp decline in market share over the last 20 years. Today, 30% of consumers say they would gladly switch brands for a coupon. Double would switch for better service. Ergo, the concept of a one-way relationship to a brand has become outdated. Instead of focusing on loyalty, interrogate factors that improve attraction (not the same as customer acquisition). Attraction unlocks hidden value. Loyalty is short-lived and distracting.

Traditional loyalty programs are outdated

71% of consumers say that loyalty incentive programs don't make them loyal. Traditional loyalty programs are becoming outdated-transactional and stale. Even repeat buyers don't equate loyalty with frequent purchases. 67% of consumers who frequently buy from the same company say they're not necessarily "loyal". This underscores an important shift in consumer psychology. Consumers have emotional expectations that traditional hard KPIs can't predict (e.g., conversion rates, cart sizes). Today's digital consumer is an influencer and creator. So brands should start focusing on "community" rather than "loyalty".

The age of relevance is upon us

The future of marketing big picture is about relevance. The 1980s focused on mass production and mass appeal. The 2010s focused on loyalty and the emergence of advanced CRM. Today, the digitization of literally everything shines the spotlight on relevance, experience, and personalization. How does a brand serve its consumer's most relevant needs in the moment? This framing question is far more holistic than how to retain customers. The former invites experience and personality. The latter tends to overindex on hard KPIs.

Key tactics moving forward

Instead of customer loyalty, focus on retention. Here are some mantras that overstood the test of time. Now, instead of repacking this into another loyalty scheme, bake it into your core philosophy around consumer engagement.

  • Know me (but don’t get too close unless I give permission).

  • Be reasonable as if I'm your friend (by not sending me more water ski ads when I just purchased water skis from your store).

  • Anticipate my needs (you know things I don’t, that’s your value).

  • Show you care about me (and my community).

  • Appreciate me (thank me for my business).