1to1 Magazine's Weekly Digest

Date: 12/10/2007

Issue: December 10 2007

People: Don Peppers

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Loyal to What?

Customer loyalty is one of the "must-haves" for any business. From the executive suite to the sales team to the call center, the drill is often the same: Engage customers enough to make them loyal to our product.

But what happens when those employees succeed a little too well -- when the customer ends up being loyal more to the salesperson than to the products and services offered by the company itself?


It happens more often that one might think, according to a new study, Customer Loyalty to Whom? Managing the Benefits and Risks of Salesperson-Owned Loyalty, conducted by a team of marketing professors and recently published in the Journal of Marketing Research.

"I had been concerned with some loyalty and satisfaction measures that are often taken that assured that sales were being made based on customer loyalty to companies," says the report's coauthor, Lisa K. Scheer, the Emma S. Hibbs Distinguished Professor and associate professor of marketing in the University of Missouri College of Business. "But my own personal observation and belief was that it was not so much at the company level.

"If you're a woman and you regularly go to a particular hair salon, you might describe yourself as 'very loyal' to that salon," she continues, "but the fact of the matter is that your stylist happens to work at that salon, and if she moves to another salon, you'll probably follow her."

Companies too often rely on surveys that focus on more "global" types of loyalty measurement, Scheer says. "They need to develop more complex surveys to assess the relative amount of loyalty a customer places in various aspects of the offerings at the company." She encourages companies to look at the absence of various elements in their surveys: If Salesman X was no longer here, would you still buy from our company? If this particular brand was no longer offered, would you maintain a relationship with our company?

"True loyalty is ultimately about a relationship," says Lisa Bradner, senior analyst at Forrester Research. "And it's easier to build a relationship with someone than it is with something. I may be loyal to Starbucks but part of it comes from the way the servers act towards me. Human interactions can reinforce a brand."

Bradner suggests that companies institutionalize behaviors. "Starbucks has a huge employee training program, where they invest heavily to make sure it's a very positive experience. And yes you may love your barista, but if she leaves, the next one is going to be equally warm and friendly."

It's about mindshare
Luc Bondar, vice president, global loyalty at Carlson Marketing, says companies should encourage their staff to build those strong relationships with customers -- and then work to replicate it.

"Once you've identified 'good salespeople,' those who go above and beyond, you need to place them with your high- value customers as soon as possible, he says. "But then you should rotate them out into dealing with the lower tier of customers, so that they can teach others the same principles, before rotating them back."

Understanding what it is that makes a particular employee so attractive to customers is key to being able to replicate that behavior throughout an organization, Bondar says. "It's not an easy step, and it's not something you can accomplish with a short-term approach. The last thing you want to do is to tell an employee, 'Be more like Mike.' There are all sorts of nuances to consider."

"It's all about taking the best qualities of 'Harry' and replicating them in your organization," Bradner affirms, "so that if or when Harry leaves, there's not a gaping hole to be filled."

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