This has been a topic for a while now (something related to work). Since this came up, I am struggling with the idea of what loyalty is. The topic has been around “Loyalty programs” that people have. There has been a lot of back and forth. Where I am stuck is – What is loyalty and how does one generate loyalty?
I look at myself, and when I see my patterns (and of people around me), the loyalties are not linked to points or what benefits people get. They are loyal and I am loyal because of various reasons but none of those are “points or rewards they give me”. Finally, I think I have a POV that I can create and chose to accept.
People buy something under 3 conditions:
- They have a need
- They have a desire (and some spare money)
- They have an addiction
I can’t think of any other reason as to why would someone go out and buy a thing. These 3 are the reasons I can deconstruct every buying ever (please comment if there are any other reasons – but think of base needs like reasons).
Right out of the box, I would take addiction out of the conversation as to me that is ethically wrong for any brand. Some brands and companies do this. Mobile gaming industry does this all the time and they make billions and they somehow are able to justify it too. People are getting smarter so I have a feeling that some day this may get fixed, but it will never go away.
Now coming to desire vs. need. Here is an example – if I desire a Ferrari, then I may save money for it or I may never be able to save money and it may remain my desire forever. So it it loyalty? Some would say yes it is; but I simply think it’s a desire. When you desire something, you want it no matter what. Choices those brands or people make don’t matter much, because it’s an emotional response. You are not attracted towards that thing for reasons you can’t explain to yourself or someone else. You will make up reasons to defend the irrationalise around it. Some may call this fanaticism.
Need is something very different. In animals, need is something that drives all their decisions – when to kill (for food), when to sleep, when to mate. They don’t do things for pleasure. We humans do it for pleasure. Also, in animals you see loyalties – Dogs to humans, animals herds etc. Some would say these are also base traits, but I would say there is a sense of loyalty that you do not want to move away from the group you are loyal towards. But in case of an animal, they do not do things for any other motives but to survive. In case of humans, this changes – and this change of behaviour changes everything.
So for a brand, if they want people to be loyal, they need to find what ticks people. There will always be something else to fulfil a need. some needs clothes, there are about 100 options, you need a car – 20 options etc. etc. When a person needs something, what matters is if they think of you? They may think about you because they have experienced your brand somewhere else. Or they may think of you because of an advertisement on a TV or on YouTube. Loyalty rewards points are also another way of making them think about you but in this case it’s “because you are giving a discount”. There are stores and brands I have experiences who are all about discounts. These stores are known for sub-optimal quality / experience but are good for discounts. Generally people do not shop for sub optimal unless the money they have to suffice their need is just enough. If you are targeting those customers then great – your loyalty program will work; but when the next brand comes along and meet their needs better, they won’t stay with you.
This is why I feel Loyalty Rewards are wrong. They are situational, and you remain because there is no better option for reward.
LOYALTY doesn’t come at a reward. it has to be unconditional. So my take is there is on way to build loyalty with customers and that is
Every time they interact with you, you need to do something they value or connect to. They need to know that via your brand they have made a difference.
I buy an iPhone and I am willing to pay so much money because I know they stand for Privacy and I trust them. I am willing to be loyal to them because I know whatever else they might do, they will always take care of my privacy.
Beyond that, I cant think of any other brand that I am loyal to. everything else is a desire, and from there on its who meets my desire best.