Does this scenario happen? Yes it does.

Over at Harvard Business blogs, Conversation Starter writers, Timothy Keiningham and Lerzan Aksoy, share instances when customer loyalty is a bad thing.

* when customers are loyal to you because you have compromised the price of your products and services
* when customers demand an excessive amount of service, but are unwilling to pay fairly

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The article actually makes me think of the other side of customer loyalty. It can be a tricky thing.

How to ensure that loyal customers are oiling your business machine

* Establish some criteria for loyal customers and see if you have been following them.
* Examine your customer base and determine if what you consider as loyal customers are actually helping drive your organization.
* Analyze your loyalty programs and see if they are compromising your business through price deals and exchange policies.
* See if your business has been giving in to excessive demands and complaints from your supposed loyal customers. In the book, Strategic Customer Service, it says there that “solving the problem only for customers who complain can be a dangerous thing.”
* Find a way to convert your profitable customers into loyal customers.