Which is the more powerful marketing asset, customer engagement or customer loyalty?
Loyalty and engagement are interesting dimensions to look at. Before we get to that discussion, however, I’d like to introduce some definitions.
Temkin Group defines loyalty as the willingness to consider, trust, and forgive. A loyal customer is willing to consider new products and services you have to offer, to consider you on his short list of suppliers for new purchases, and to trust your descriptions of new products. A loyal customer also is willing to forgive you if you make a mistake (as long as it’s not repeated or egregious). That’s how we view loyalty.
We often see loyalty described somewhat differently, as a customer who repeatedly purchases your products or services. In this case there are situations in which customers may be loyal even though they don’t want to be. Think of a health plan that someone doesn’t like, but it’s the only one that makes sense for her employer. Or consider a TV service that someone dislikes, but he doesn’t really want to schedule time with a competitor that he isn’t sure is better. These trapped customers may not have other options or they may just be unwilling to go through the effort to make a change. So, by our definition these unhappy customers are not loyal.
We make this distinction in loyalty because trapped customers aren’t assets that you can count on. They’re prepared to leave as soon as the switching costs go down. And if you focus on trapping customers, then it can lead to bad behaviors and poor customer experience.
Get engaged
Now on to the other concept: customer engagement. I’d define engagement as the desire to think about and interact with an organization beyond what is necessary. An engaged customer will often spend a lot of time on your website, purchase multiple products of yours, share feedback about your company on social media sites, and go out of his way to act as a reference. He isn’t just interacting with your company to get something done; he wants to interact with you.
Let’s look at the connection between loyalty and engagement with two companies, Apple and Microsoft.
Apple historically has had very loyal and highly engaged customers (although there are some signs that the love affair with Apple may be waning). If you look online, you will find all types of customers willing to defend the company from any negative comment in social media and more than willing to stand in line to buy the company’s newest products.
Microsoft, however, does not seem to have that level of engagement. It does have loyal customers in many areas, but customers don’t go out of their way to affiliate with the company quite the way they do with Apple. A bad mention in social media is likely to garner a wide range of other people venting their dislike of Microsoft.
It’s not that Apple has more loyal customers than Microsoft; it just has much more highly engaged customers. For some reason, people not only want to buy Apple products, they also want to think about them and talk about them with other people.
Loyalty wins
So, what’s more important—customer loyalty or customer engagement? I’ll go with loyalty. I’d rather be faced with the challenge of turning loyal customers into engaged customers than the challenge of trying to create loyal customers from scratch. In most cases (but not all), engaged customers are also loyal. So, loyalty is a prerequisite for engagement anyway.
Before ending, I want to chat a little about what creates engagement. It’s built on a series of positive emotional responses to experiences. Think about people you like and others you don’t like quite as much. Which ones do you want to spend more time with? Why do you like them more than you like others in the first place? There’s something about them that makes you feel good when you’re around them.
They make you laugh, think, smile.
If you want to create loyal, engaged customers, then make sure to deliver something valuable for your customer and, like your best friends do for you, make them feel good.
********************
Bruce Temkin, Temkin Group
Bruce Temkin is managing partner and customer experience transformist at Temkin Group, a customer experience research and consulting company that he and his wife, Karen, formed in 2010. Temkin is widely viewed as a leading expert in customer experience. He is also the chair and cofounder of the Customer Experience Professionals Association and author of the highly popular blog Customer Experience Matters. Previously, he spent 12 years with Forrester Research. Temkin has a degree from the MIT Sloan School of Management and has a continuing passion for researching and consulting in customer experience. During the rare times he isn’t working, Temkin says, “I’d love to spend the time golfi ng with good friends and family on a beautiful golf course, followed by an action movie at IMAX.”
Want more? Check out the other answers:
