Be less dog: Stop measuring loyalty, says consumer behaviour expert

What does customer loyalty really mean to a brand? Philip Graves, an expert consumer behaviour consultant and author of Consumer.ology, believes the term is no longer relevant and misguides businesses in their approach to customer service.

In a report written in collaboration with Oracle, Graves states that the measurement of customer loyalty is antiquated, and should be replaced with a better understand of behavioural psychology and customer ‘stickiness’.

The endearingly titled ‘Dogs are loyal, customers aren't’ stipulates that, in psychological terms, loyalty means ‘the safety of a herd’ and that loyalty can only exist when feelings of shame and guilt are triggered as a result of us not acting in accordance with the “rules”.

And Graves believes this is a feeling that can’t truly be replicated in the act of switching brands, and therefore brand loyalty can never truly exist and shouldn’t be something businesses try to measure.

“The repeated and exclusive use of your goods or services might appear to be loyalty; in fact, this description entirely ignores what customers are actually experiencing emotionally. In all likelihood they aren’t feeling anything like loyalty,” he says. “And if that’s not what they’re feeling, it has major implications for what you should be doing in customer service.

“No small part of the problem comes from misguided market research that purports to represent customers’ interests...by drawing someone’s attention to something, you can create a focus of attention that is totally artificial; in other words, respondents are considering something solely because you’ve asked them about it. Your insights are then based on thoughts and feelings that they never have as consumers!

“If you recruit customers on the basis that they’ve used your brand exclusively for years and talk to them about the longevity of their patronage, it’s no surprise when they grumble about wanting their loyalty rewarded.”

Instead of loyalty, Graves suggests businesses measure ‘stickiness’, which he applies to the instance in which customers “use you more than your competitors (or better still, exclusively)”.

Another benefit, he adds, is that stickiness puts the sole focus on behaviour— as there is no place for attitudinal claims as with loyalty. Also, in using the word “stickiness” (which is descriptive of the behaviour) rather than “loyalty” (which is a projection of what’s driving the behaviour), you encourage a broader perspective on the levers that you might use to influence customer behaviour.

Stickiness has three clear benefits over loyalty, he adds:

1. You can turn stickiness into a verifiable dependable metric, whose movement actually means something to your business.
2. Customer service is a huge component of stickiness: it’s clearly a metric customer service should own and attempt to influence. Loyalty, of course, becomes the primary domain of people who wear black turtleneck jumpers, invent words like “ideation” and still get to go to lot of Christmas parties.
3. Consumer behaviour offers valuable insights into how to drive stickiness through customer service.

Graves isn’t the first to flag the issue of trying to measure customer loyalty in the modern era, with Lior Arussy, president of the Strativity Group stating back in 2009 that customers were now far more driven by experience in their purchasing decisions, rather than a sense of genuine loyalty.  

Supermarkets are just one of a number of industry sectors that are experiencing this change in consumer behaviour first-hand, and the continuing rise of discount stores such as Aldi and Lidl in recent months has led retail expert Natalie Berg to state that supermarket loyalty schemes may soon be “dead”.

The travel sector is another struggling with consumer behavioural changes around loyalty, especially in terms of reward schemes. Recent research from Collinson Latitude found that 74% of travel decisions are influenced by reward schemes in booking vacations with travel operators, but just 33% were satisfied with the quality of what was available.