With this infographic we wanted to explore different aspects of customer loyalty. From why it is an important aspect of business to future trends in keeping customers loyal to your business. Enjoy Customer Loyalty: What it is and why it’s important.

A recent survey commissioned by Harris Interactive found that 86% of consumers quit doing business with a company because of one bad customer experience, up from 59% 4 years ago.

*Source: Harris Interactive:

Customer Experience Impact Report 2011

86%! And growing, this is clearly showing an increasing gap between customer expectations of their experience and what companies are delivering.

Why is this happening?

Rationally it does not make a lot of sense. One would think that switching costs and the time already invested by the customer in doing business would preclude them from changing suppliers.

However, the reality is that we are driven by EMOTIONS. Experiences that create powerful negative emotions tend to override any logic or rationale thinking.

Have you ever gone off the deep end? Think about the last time you responded emotionally to a situation that in hindsight seemed like an overreaction? We have all been there before.

What does this mean for companies?

“Quality has always been about the fine points…” - Don Cornelius

Quality is about the details, the little things that make a difference. And like value, quality is always in the eye of the customer.

Have you ever closely examined a fine pair of shoes to see the detail of the work, the leather, the stitching, the soles, the way they fit, the way they make you feel when you wear them? Quality looks and feels different – it looks better, it feels better, it is better.

The same can be said about food, furniture, wine, practically anything we buy. High quality items are better. We know this because we have learned to tell the difference, to understand what sets one thing apart from another. We have learned to look at the fine points.

Just like you, your customers know quality when they see it, and they are often willing to pay more for it. Customers know when someone has gone the extra mile and put in the extra effort to deliver quality. Discerning customers are constantly raising the quality bar. Yesterday’s expectations for quality and dependability became today’s requirements.

Those who follow the tech industry are familiar with the phrase “over the top” or OTT — a term that designates a new class of video services that rides the networks of telecom and cable companies, providing movies and other content on an all-you-can-eat basis. OTT services like Netflix are a huge hit.

Unfortunately, as one viewer recently discovered, if you use OTT services while on international travel, your roaming charges can be over-the-top. For the offending service provider, negative publicity can go off the chart, too.

John Gibson, tired of the frigid weather in his native Saskatchewan, decided to take the kids and grandkids to Phoenix for some fun in the sun. He packed his laptop so the kiddies could watch their favorite flicks while on holiday. Shortly after returning home, Gibson received a bill from SaskTel, his telephone company, for over $10,000, all of it triggered by roaming charges related to movies watched via OTT service outside of SaskTel’s region. Watching Shrek alone cost the Gibson clan nearly three grand.

Gibson complained, and SaskTel agreed to knock $9,600 off the bill — but still left the hapless customer with a balance of $1,000-plus. Demonstrating far more equanimity than I (or most people, I’m sure) would have under the circumstances, Gibson agreed to pay the bill and write the experience off as “a lesson.”

Last week I shared the Loyalty Matrix – a framework that segments customers into four categories based on their attitude and behavior.

When we discuss this framework, people are typically very intrigued with the “trapped” category. It seems to be an element often missed in customer satisfaction ratings, Net Promoter Scores, and other measurements. The trapped customer is indeed unique.

In some ways trapped customers are appealing because they are giving every indication they are going to continue doing business with you. And that’s good!

However, this can be a short-term approach to building customer relationships and companies should be careful with it. We’ve found time and time again there are important differences between a loyal customer and a trapped customer.

If you took the weekend to read Mark Zuckerberg's shareholder manifesto, you'll see that Facebook's IPO is the endgame to a covert loyalty scheme that Zuckerberg envisioned long ago. Like many a successful startup before him, Zuckerberg realized that customer loyalty isn't created by a program. Facebook nailed the basics, and its growth has been fueled by the relationship it developed with loyal customers the world over. The letter reveals three key loyalty elements that Facebook was built upon:

1. Outline the mission – Zuckerberg makes clear that Facebook was built around a single goal, “to make the world more open and connected.” It's simple, customers can grasp it easily and decide if this aligns with their vision. A company with a mission, instead of just a product or a service, inspires emotional connections with customers who share its beliefs.

2. Build relationships – “Even if our mission sounds big, it starts small - with the relationship between two people….” Zuckerberg writes. “We also believe that giving people control over what they share is fundamental.” Throughout the manifesto, Zuckerberg highlights the critical importance of the customer. Facebook was built to help customers connect with what they want, and share that connection with others, in a way that they create and control.

The goal of any professional sports team is always to win the ultimate prize.  As many of us saw this past weekend, in American football, the ultimate prize is the Super Bowl.  In European football, it’s the World Cup.  In baseball, it’s the World Series.

To the casual observer, it may seem as if the top prize is earned by the athletes who happen to prevail over their opponents in the final contest – just sheer competition on the field of play.  Anyone knowledgeable about professional sports, however, knows that winning a championship requires the focused commitment and hard work of an entire organization made up of people who engage in the sport itself and others who labor tirelessly behind the scenes.  Managers, coaches, scouts, logistics workers, PR representatives, front office personnel, travel planners, team accountants, equipment managers … the list goes on and on.

Why can some professional sports organizations, often those with enormous payrolls, arm themselves with the very best players, yet struggle their way through the season and finish with mediocre results, while other organizations with much less in terms of player talent and resources can somehow find a way to ultimately prevail?

Matthew Broderick is giving us a time-out during the Super Bowl, and for a middle-aged, recession-weary public, the timing couldn’t be better.

Broderick, if you haven’t heard, is reviving Ferris Bueller, the school-cutting, life-loving teen of the 1986 movie. It is for just a brief time, but it is the quality of the moment, not the length, which matters.

The effort comes in the form of a commercial for Honda. That’s right, instead of the wickedly gorgeous, cherry-red Ferrari 250GT California, Ferris ditches work and gets his kicks in a red CRV.

But it works, not surprisingly. With smart writing, an eclectic soundtrack and a terrific cast, Ferris Bueller’s Day Off introduced lines that are still being used 26 years later, from “Bueller? Bueller?” to (more resonantly) “If you had access to a car like this, would you take it back right away?”

To our delight, many of these lines (as well as the Yello song “Oh Yeah”) are used in the ad, no doubt designed to get viewers of a certain age to nudge each other conspiratorially. Remember that? Wasn’t that great?

By uniting with Ferris, Honda is aligning itself with the free-spirited, adventurous youth who still lives, somewhere, in all of us. It is extending our loyalty from the principles of Ferris to the principles of Honda.

My household after work is probably not a lot different from yours.  Assuming everyone is home for the evening meal, there is the requisite “what do you want for dinner?” question followed almost religiously by the “I don’t know…you pick” response, which invariably leads to an uninspired selection based on how quickly and easily it can be put on the table.  After dinner and at times during dinner if I’m being completely honest, we sit down to watch a comedy because it’s something the three of us usually agree on and it sets a positive tone for the night.

Once the meal is over, however, all nighttime viewing bets are off.  My husband, son, and I have a running debate about what we watch on TV.  Their interests lean toward sports, sports commentary, sports news, shoot-em-up movies, anime, and The Three Stooges (I’ll never get that last one).  Me, I’m happy with a prime time comedy, a few quick passes through the shopping channels, and any DIY or home improvement show that catches my attention.

Take a look at your business through SD Logic

If you use the Service Dominant Logic lens (as opposed to a good dominant logic) it opens up a new way of looking at the interaction/interface between your business and the Customer.  The key aspects of the Services Dominant Logic (for me) are:

• the Customer approaches your business because he/she has a job (something to do) and an outcome (the desired end state) in mind;
• the products and/or solutions you sell are better thought of as services your provide to help the Customer get the job done and achieve her desired end state.

SDLogic gives rise to the question: how useful am I to the Customer?

If you look more deeply into this you are likely to see that a key question arises: how USEFUL are you and your products/services/solutions to the customer in terms of the job he has in mind and the outcome/s she wants?   It seems to me that many are attracted to all manner of ‘toys’ and yet few are focussed in excelling at being USEFUL to the customer across the customer journey.  I would go further and say that what I find most stunning given the whole thing around customer-centricity, customer focus, customer obsession is the lack of conversation around the following questions: