1:1 magazine ran a cover article not long ago titled If You Want Loyalty, Get A Dog (the site tells me the article is no longer available), and now, in my inbox, comes an article from a company called Vox that poses the question “Is customer loyalty a thing of the past?”and claims that “old business tactics don’t work on today’s savvy customers.” The article goes on to say:
Today’s customers don’t hesitate to switch where they do business if they feel their expectations aren’t being met. In fact a recent survey conducted by Thunderhead, found that 61% of insurance, and 63% of banking customers polled planned to switch providers during the next year. The reasons? 76% want more personalized options when it comes to how providers communicate with them.”
My take: First off, no where near 63% of banking customers are going to switch providers during the next year. Second, among those that actually do switch, the desire for “more personalized options when it comes to how my bank communicates with me” is not going to be at the top of the list of reasons why they left.
There’s no shortage of articles and blog posts proclaiming the death of customer loyalty. While it may very well be true that “today’s customers don’t hesitate to switch” and that people want “more personalized options,” these articles rarely explain why.
The reason, in my opinion, is impacted by — but not caused by — the Internet. No, the root cause of this goes back well before the advent of the Internet, and social media, and all the other so-called “disruptive” technologies that some people like to rant about.
Instead, the reason is rooted more in societal changes and globalization. As we’ve become a more affluent and highly educated society, we’ve had an increasing desire to have more control over our lives. It’s an insult to our intelligence to think that we can’t make decisions for ourselves and that someone else has to tell us what products and services to use. Globalization, however, has had a negating impact on that feeling. As news from around the world reaches us daily, hourly, and now on the minute, we’ve increasingly felt that things are happening so fast that we’re losing control of what goes on around us.
Switching providers — whether it’s banks or firms from other industries — is an act of independence. We switch because we can. We switch to make a statement. We switch to demonstrate that WE are control of our lives and our business relationships.
While having the ability to “personalize communication options” is a demonstration of personal control of the relationship, let’s get real here — in the scheme of things, it’s simply not that important. Despite all the market research that purports to show a decline in customer loyalty there are still plenty of examples of firms with fiercely loyal customers. Do they all allow “personalized communication options”? Doubtful.
Successful firms approach customer relationships as just that — relationships. A two-way street. It goes far beyond “customization” and “personalization”.