• August 1, 2003
  • By Paul Greenberg, founder and managing principal, The 56 Group

Customer Loyalty? Get Over It. Customer Satisfaction? Way To Go.

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If you are pushing CRM as a tool for customer loyalty, it's time to rethink your strategy. Customers--be they paying clients, employees, vendors, or partners--are rarely loyal. They are willing to jump at the first perceived slight or problem, even if they have been dealing with you for years. Due to the rise of the multichannel communications world we now live in, customers are empowered to go where they want to get what they want, when they want. They don't like your product? Goodbye. They don't like your company message? See ya. They don't like the way that you treat your employees? So long. It's a mouse click away. Recently I had the honor of addressing a business conference sponsored by Oklahoma State University's extraordinary marketing department. During a breakout session a banking official whose bank had recently acquired banks in multiple states raised a puzzling point: The company had long-time customers who weren't leaving the local banks it had bought, but surveys and research couldn't establish a reason why that was the case. These bank customers had no particular loyalty to the new owners, but they stayed. During the discussion it became clear to me that the bank was confusing loyalty with customer inertia. Customers weren't going away because they didn't see anything better on the horizon. But that is a tenuous place to be, and is vastly different from customer loyalty. Some slightly different air, and those "loyal" customers are gone. Loyalty doesn't exist much anymore, and you shouldn't even listen to CRM vendors that talk about gaining customer loyalty as a result of their solution. So then what is the value of CRM? Self-interest. Not selfish interest, but an outlook that says, What is this strategy, philosophy, system, and technology going to do for me that will make me happy and productive? We are all people and we all have agendas that concern us in both career and family. It might be a mercenary approach to a job or a selfless career in public service. But we are moved to happiness by things unique to us as individuals. CRM's value is to satisfy those needs in the business environment, which is customer satisfaction, not loyalty. So CRM means keeping customers as close to you as possible, as the means for your business survival. CRM can make customers more comfortable with you because you do things better for them--that is customer satisfaction. But woe unto you when you stop doing things better. Will CRM make customers loyal? To answer that question, let me ask you this: Are you loyal to your vendors? Have you ever switched from the companies that you do business with regularly, or have you stuck with them even when they've screwed up? I rest my case. Paul Greenberg is president of The 56 Group LLC, an enterprise applications consultancy specializing in CRM, and author of CRM at the Speed of Light: Capturing and Keeping Customers in Internet Real Time. Contact him at paul-greenberg3@comcast.net
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