Customer Loyalty is Dead – Avaya CMO Morag Lucey Blog

Customer Loyalty is Dead

It’s a bold statement, I know, but I’ve been struggling with the idea that true loyalty can’t really exist in today’s digital world. Hang in with me for a moment.

My colleague was taking her 16-year-old son to open his first bank account (exciting!). Naturally, she chose to go where she and her husband have banked for over 19 years and enjoyed exceptional service. So what happened? When they arrived, the teller said the bank’s systems were down and suggested they come back the following day. So what did they do? They went to the bank across town whose systems were working and allowed the account to be opened that same day. That instant gratification that’s so expected and needed today trumped the more than 19 years of positive experiences and service she had enjoyed with her bank. So much for loyalty!

My children aren’t any different. They’ve been huge advocates of the Uber car service. They even got me hooked on it. Every experience has been seamless for all of us. So, imagine my surprise on a recent trip when my daughter pulled up Lyft to get us a “lift.” What did Uber do wrong? Absolutely nothing. They did everything right; it’s just that Lyft is the driving service du jour and it’s apparently way cooler … for the moment.

In both examples, the brand hop wasn’t about a series of shoddy customer interactions. A few decades ago, my colleague likely wouldn’t have switched banks so easily. What’s different today? Short of actually opening an account, banking can be done in your hand. Before tech, she likely would have waited until the next day simply to avoid having to drive across town to bank at different locations (those were the days when we had to walk into a building to make withdrawals and deposits). Convenience most certainly would have come into play and kept her loyal to her bank. In my daughter’s example, it was about easy access to another well-known choice. Technology, which is accelerating at rapid speed every day, has changed the game and has leveled the playing field for new companies to emerge and easily compete with well-established companies.

It’s About Customer Experiences

If we acknowledge that customer loyalty is a thing of the past, then what are we left with? Providing exciting, sought after and irresistible experiences—plural, not singular—to our customers. The types of experiences that make us salivate for more.

Let’s look at recent headlines. I think we all heard a collective groan during Apple’s latest launch event when the “wow” factor we wanted just wasn’t there. There isn’t any doubt that Apple has revolutionized technology in nearly every way; but it’s not enough. We expect Apple to continue to innovate and blow us away, especially given the hype attached to their launch events.

Last year when Apple introduced the first Apple Watch, the world took notice. It was new, sexy, innovative and a wearable that people actually wanted to wear (I’m looking at you, Google Glass). But just because Apple has the world’s best brand recognition and loyal user base doesn’t mean that the Watch wasn’t introduced with mixed reception. It’s a very polarizing product that’s still in its infancy. After all, breaking into a new product segment and expecting overnight success is something that every company dreams of, but very rarely ever achieves.

I recently viewed Samsung’s launch event where the company previewed the soon-to-be released Samsung S3. It’s a smartwatch and let me tell you, it’s beautiful. It looks like a watch, and its capabilities blow Apple out of the water. And get this … most any watch band will fit on the Samsung S3. That’s right. Samsung is catering to customers. The company knows that customers may want to personalize their watches so they give them that feature.

Conversely, Apple recently announced that we need wireless headphones or headphones with a lightning cable for the iPhone 7. How many companies can you name that make audio devices with a lightning connector? That’s a very niche market. Apple used to be about simplicity. The company’s motto was “it just works.” What’s simple about having to carry two sets of headphones or adapters? How will my new lightning headphones “just work” on my MacBook? Apple has begun to fail their customers and create negative experiences.

Admittedly, I don’t think Samsung will outperform Apple in sales of their watch or phones, but I do think they’re making a dent in Apple’s customer base. Little by little, other companies are taking away market share from Apple. This will continue until Apple steps up its innovation game and starts redelivering on customer experiences.

Creating Limitless Customer Experiences

What can we learn from Apple? We need to keep “experience” top of mind. Consider these stats:

  • The most important driver of brand loyalty for millennials is a great product at 77%, followed closely by brand recognition and trust at 69% (NewsCred). What I glean from this is that great products can be replaced by other great products pretty easily (case in point: Uber versus Lyft and Apple versus Samsung). Surprising to me is how important strong name recognition matters to millennials (cool rules!). So what’s hot today definitely drives purchasing decisions.

  • 46% of customers are more likely to switch service providers (across industries) than they were 10 years ago (Accenture).

  • 78% of consumers are not loyal to any one particular brand (Nielson).

My advice? Constantly innovate. Take chances. Don’t be afraid to fail. You don’t have to be first to market, but you must steadily outpace your competitors once you get there. Perhaps most importantly, take a good look at your own customer experiences in your daily life. What makes them great? Why are you likely to go back to a particular company to do business? Did they personalize your experiences? Did they consistently go above and beyond? Did they make you feel special? Was your interaction with them seamless and easy?

Sometimes small details are just as impactful when it comes to experiences. Take these golden nuggets and apply them accordingly. As we lay customer loyalty to rest, let’s bring to life experiences our customers have come to expect and so richly deserve.