The future of generative AI in conversation intelligence
Tethr is testing GenAI applications to help contact center leaders find and act on conversation insights even more efficiently.
October 31, 2023
July 13, 2021
We’ve talked about a lot of ways to build customer loyalty over the years.
There’s no top-secret tool, no gadget, and no magic phrase that makes your customers loyal for life. While we may focus on “net promoters” and invest in programs that let customers earn rewards or track customer loyalty, the truth is, loyalty is much simpler.
Today, we’ll break down the “four flavors” of customer loyalty, and work to identify the one aspect that leads to repeat business, happy customers, and brand loyalty.
As we’ve identified in previous research, customer loyalty can be boiled down to a four-cell framework. OAs we’ve identified in previous research, customer loyalty can be boiled down to a four-cell framework. On one side, we have the effort customers must exert to do business with your company. On the bottom, we have the “stickiness” of your product/brand, which references how difficult it will be for a customer to switch from using your brand to another.
As you can see, there are lots of reasons for customer loyalty, and not all of them are good. Let’s break down each of these four cells and try to identify the most direct cause of customer loyalty in these situations.
In the lowest left-side corner, we have the least-desirable corner of the four cells, otherwise known as the “Chronic Suck” category.
This high-effort experience results in a product or service that is sub-par, and does not meet customer needs and expectations. This is like when you go to the coffee shop, wait twenty minutes for your order, and it ends up wrong anyway. Then you find out your credit card was charged the wrong amount.
Everything about this experience is negative! We all know a business that’s just like this, and you wonder how they’ve stuck around all this time. These types of experiences lead to bad word of mouth, and low customer engagement.
Our takeaway? These experiences do NOT create loyalty. Don’t be like this. In fact, when new companies implement Tethr, one of the first things we recommend is to work to eliminate experiences in this category as we begin measuring customer loyalty.
On the right side of the high-effort row, we have the Bearable category. These experiences are the ones where you can forgive a high-effort customer experience for the sake of a great product, or it’s so much effort to switch products that they feel compelled to stay even if customer service isn’t great.
This isn’t ideal. Perhaps you have a great product—the best coffee in town, for example—but your staff is unhelpful and your store hours inconvenient. Your customers make do, but your customer satisfaction is never where it could be.
Alternatively, maybe you run a bank and the customer has been banking with you their entire life, and it’s just too difficult to switch.
Our takeaway? These experiences create loyalty indirectly. A bearable experience has some powerful negatives, but ultimately it’s too hard to switch or your customers love your product enough to suffer through negative experiences.
The upper left, Forgivable, represents those experiences that are just too easy to pass up. This could be heading to the corner store instead of the nice grocery store that’s twenty minutes away, or the gas station right next to your place of work. It might be more expensive to shop there, but it’s easy and convenient to do so, so you keep returning. Customer retention is, in this situation, achieved through ease of experience.
Our takeaway? A low-effort experience sometimes encourages customers to become loyal, even when the product or service is lacking in some way.
Finally, let’s discuss the holy grail of customer loyalty: low effort and high product stickiness. We call this “The Promised Land.”
These experiences are the ones where it’s super easy to get what you need, and it’s exactly what you want when it’s in your hand. This happens in situations like this: You find the perfect pair of jeans online that cost the right amount of money, place an order—and they arrive in two days and are exactly what you wanted. If those jeans don’t fit? Returning them is a snap. That’s the kind of situation where a low-effort experience and a great product combine to create powerful customer loyalty.
We’re all aiming for The Promised Land.
What’s the direct cause of customer loyalty in all the situations listed above? There are two types of loyalty visible, good and bad.
So, with this in mind, let’s go back to the beginning and answer our first question: What is the most direct cause of customer loyalty?
Answer: A low-effort customer experience combined with a good product or service.
If you’re interested in learning more about the research around reducing customer effort, The Effortless Experience, or Tethr’s own effort scoring system, check out our resources page for more information. To learn more about Matt Dixon and TedMcKenna’s research into the “Four Flavors of Customer Loyalty”, referenced here, check out this post. To see our effort-reduction engine in action, request a demo today and we’ll show you around the platform.
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