We’ve talked about a lot of ways to build customer loyalty over the years, from first contact resolution, to more digital options, to staffing choices. But there’s one secret that all these strategies have in common—and it’s not what you’d expect. There’s no top-secret tool, no gadget, and no magic phrase that makes your customers loyal for life. Today, we’ll break down the “four flavors” of customer loyalty, and work to identify the common denominator in high loyalty situations.
The four flavors of customer loyalty
As we’ve identified in previous research, customer loyalty can be boiled down to a four-cell framework. On one side, we have the effort it takes to do business with your company. On the bottom, we have the likelihood of product or brand stickiness.
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.
High effort, low product stickiness
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. Everything about this experience is negative! We all know a business that’s just always like this, and you wonder how they’ve stuck around all this time.
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 from their value proposition.
High effort, high product stickiness
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 that they feel compelled to stay. This isn’t ideal, but perhaps you have a great product—the softest sweaters on the market, but your service center is disjointed and difficult to use—your customers make do. Alternatively, as we said, maybe 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 product is just that good.
Low effort, low product stickiness
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 loyalty is, in this situation, achieved through ease of experience.
Our takeaway? A low-effort experience can sometimes create loyalty, even when the product or service is lacking in some way.
Low effort, high product stickiness
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, place an order—and they arrive in two days and are exactly what you wanted. And 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.
Our takeaway? We’re all aiming for The Promised Land.
What is the most direct cause of customer loyalty?
What’s the direct cause of customer loyalty in all the situations listed above? There are two types of loyalty visible, good and bad.
- Bad customer loyalty happens when your customers feel trapped or stuck. They’re sticking with your product or service because it’s too much trouble to change, but they aren’t happy about it.
- Good customer loyalty happens when your customers have a low effort customer experience, combined with a great product or service.
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.