The brand of computer I prefer to use comes from Austin, Texas. The brand of motorcycle I prefer to ride comes from Milwaukee, Wisconsin. The brand of beer I prefer to drink comes from St. Louis, Missouri. Okay, with beer, if someone else is buying, I’ll drink their label.
Our research shows that customers have brand preferences for everything from shoes to underwear to automobiles. Companies rely on those preferences for repeat business. Though some brands evoke strong passions among customers—Apple and Harley-Davidson—most brands enjoy preference, not passion. Brands are about things. Loyalty is about people.
Loyalty is rooted in emotion. I prefer a brand of motorcycle, and that significantly influences my buying decision for what I want to buy. Where to buy what I want to buy is another story. I like to buy from places that provide a great customer experience. That customer experience is influenced by two things: company policy and people.
Company policies are practices and procedures that make it easy or difficult to do business with them. I like to buy from places that make it easy for me, the customer, to purchase something. Company policies are designed and implemented by people. This is where loyalty comes into play.
I may prefer a brand, but I reserve loyalty for people.
It is delusional for companies to believe that customers feel loyalty to warehouses full of inventory. Customer loyalty is the emotion buyers feel toward the people with whom they do business. Retention is the behavior of repeat business. When companies lose good people, customer retention is at risk. When companies change policies and procedures that make it difficult to buy, customer retention is at risk. Policies and procedures are not gospel; they are guidelines created by human beings, and human beings sometimes make mistakes. When companies lose good employees over policies and procedures, they will lose customers for the same reason.
Tom Reilly is literally the guy who wrote the book on Value-Added Selling (McGraw-Hill).