You've Said There Is No Such Thing as Customer Loyalty. Could You Explain?

Posted 17-Feb-2004 10:09 AM
We talk a lot about translating customer satisfaction into loyalty and turning that into ROI. But, you've said that there is no such thing as customer loyalty. Could you explain?

Sure. Loyalty is best applied to country, family, friends and civic pride. It is a deeply held, deeply felt emotional attachment that can have one acting against their own personal interest on behalf of those they love or that which they have a deep emotional commitment to (country or civic pride). Businesses do not engender loyalty. Businesses think of their customers in terms of profitabilitiy, revenue generation and a value that the customer provides that benefits the business. The customers think of the businesses in terms of the goods and services they provide being sufficient to meet their expectations. The more continuously that business meets those expectations of value, the longer the customer is likely to remain a customer of that particular business. But the business is not emotionally invested in the customer to the point that if the customer became unprofitable for a long time that they would carry the customer. They won't and shouldn't. The same thing goes for the customer. The customer remains a partner with the business, exchanging value as long as the value that the business provides is sufficient to keep them happy. If another business comes along and provides them with a greater value that is sufficient both to provide more value per good or service AND to be enough to overcome the cost of change to the new company, then it is likely that the customer will move on. They don't have emotional loyalty to the product or service or business. Where loyalty can appear is when a customer or employee has a personal connection someone at the business. That can be loyalty. I have a relationship like that with a consumer electronics company. They are awesome when it comes to their sales side with one particular sales person who has become a friend of mine. But they've screwed up in service more than once. I'd leave them in a heartbeat but I am personally connected to the sales person. That STILL doesn't prevent me from leaving them should they screw up again. He's a friend. He'll understand. But I have no relationship to that business beyond my friendship to the sales person.

Academic studies prove that customers will stay with companies under varying circumstances. They don't prove loyalty. If you're so committed as a business to the customer as a singular human being, then why do you need a measure called customer lifetime value that measures the customer's revenue generating potential and profitabilty? You wouldn't need that if you were truly committed to the person would you? Am I saying do away with CLV? No. Its valuable and important in a CRM initiative to understand what an individual customer is capable of doing. CRM is not an attitude as some have suggested. Its a strategic business initiative and outlook that is aimed at improving and enhancing a customer's individual experience with your company. But recognize it for what it is and don't degrade a concept that people have lost their lives for into a marketing thrust. Call it customer retention. Fine. Call it customer commitment. Fine. But stop calling it loyalty. Loyalty is a noble concept. While business can be noble, it doesn't engender nor does it need loyalty. It needs customer retention. It is a value exchange between the customer and the company. That is good. That is fair. That is wonderful. But that is not loyalty.

You think this is semantics? Tell that to soldiers who die for their countries or parents who sacrifice their day to day lives for their kids. You tell them or their grieving families that a long standing customer is every bit as "loyal " as their child who died somewhere for principles they held dear.

The translation of this business value exchange to "loyalty" can create egregious CRM strategic errors too if you follow its path. For example, what you might be defining as loyalty might be customer inertia. Meaning they haven't changed because nothing particularly better has come along. That is inertia that can easily be seen as loyalty without digging deep. How you define your relationship to that customer might be somewhat different if you saw it for what it is—a much more tenuous commitment than loyalty implies.

I've written this before and been attacked for it. Each attacker either personally insulted me or quoted academic studies that say other than what I'm saying. Many of you who know me know that I'm not a mean spirited person. But I think its time that we rescued a really important concept that transcends business and restored it to its proper philological and emotional place. Time to take loyalty away from marketing and put it back to its place in language. Words have meaning—some are more profound than others.

Dr. Naaras Eeechambadi in a terrific white paper on "Creating a CRM Business Case" defines CRM the following way:"CRM is the systematic use of information to attract and keep customers through on-going dialogue in order to create long lasting and mutually beneficial relationships." Long lasting and mutually beneficial relationships. Good business stuff. I can't speak for you, but I'm leaving it at that.

Do small and medium-sized businesses have a better chance of creating the kind of commitment that you're talking about? Or does size matter at all?

They do in the sense I mention above. The customers often know the senior management of the smaller companies directly and become friends with them. Again, loyalty is a very personal emotional commitment that doesn't need a bidirectional exchange for its attachment. When you are close to someone and know them as a real human being, then loyalty can occur. One business where it does exist to some extent is sports, where due to civic pride and often childhood remembrances, you attach yourself to a team through good or bad. But that is almost unique. Some non-profits engender loyalty because of the cause they espouse or the good they do. Again, not a revenue generation or profitability issue. The minute the customer is seen as a revenue generator or a profitable creature, loyalty doesn't apply to either the business or the customer. In the smaller companies, the relationships are considerably more personal and interactions are too so the commitments exist. Those commitments are to the individual though and not the business. Usually you can see the result of that when the individual who you are attached to leaves the company, so do you or your relationship becomes tepid or fragile and eventually fades or breaks.

Teri Robinson
Managing Editor

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Posted 19-Feb-2004 08:28 AM
Paul, you are dead right.

This is not semantic hair-splitting.
The mere fact of customer repatronage does not imply the automatic existence of some kind of emotional commitment to the retailer.
The academics use the term "spurious loyalty" to describe a common situation where customers return not out of positive motivation, but because it is too inconvenient to go elsewhere.

Undetected, this may be a formula for increasing, latent dissatisfaction, which can lurk like a time bomb in the customer base until a triggering event occurs.
I fiercely agree that the loose application of terms like "loyalty" to define measures such as simple re-patronage can lead to poor understanding of the status of consumer relationships. Furthermore, concepts such as "customer acquisition" and "customer retention" imply a condescending belief that a customer can be "owned" by a consumer marketer. This is nonsense, of course. At best, the customer chooses the retailer and continues to re-choose and re-re-choose that retailer based on a belief that further investment of time, effort and money with that retailer leads to continuing (or even increasing) positive return.

CRM is about continually demonstrating and re-demonstrating that value to consumers to earn their ongoing trust. "Loyalty" should not even be in the lexicon.
I have written on this topic a number of times over the years and invite correspondence from you, Paul, and from interested readers.

Cheers,
James Tenser
VSN Strategies
jtenser@vstorenews.com

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Mei Lin Fung
Member
Picture of Mei Lin Fung

Posted 19-Feb-2004 09:05 AM
Paul and James

Thank you both for pointing out the elephant in the room.

Up to now, I had fallen into using the word loyalty when describing a series of transactional relationships between buyer and seller that were clearly more than just a series of transactions.

You've alerted me / us to the danger of loose language and I will be more precise in future.

The language of discourse is important. To further ou understanding of customer relationships, we needed this clarification.

Well said.

Mei Lin Fung
MLF Associates, Inc.

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Posted 19-Feb-2004 11:03 AM
While I completely agree with Paul and James that today's organizations really think of their customers in terms of profitability, revenue generation and a value that the customer provides that benefits the business; customers do exhibit loyalty towards brands and organizations. There are customers who travel that extra mile to get their favorite brand or visit their preferred retail outlet. May be that percentage is very low. But organizations should strive to cultivate such loyal customers. By and large research has shown that loyal customers are also profitable customers (See Reichheld on Loyalty Effect). It is organizations that need to change their approach not through away a valuable concept as loyalty along with bath water.

M J Xavier
Professor—Marketing
CalPoly—SLO

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Ballistix
Member

Posted 19-Feb-2004 01:04 PM
I'm not sure I agree with the author's definition of Loyalty: emotional attachment that can have one acting against their [sic] own personal interest.

Wouldn't it be more correct to say: acting against one's own *short-term* personal interest.

My assumption is that loyalty is a form of implicit knowledge that serves to align an individiual's less-significant actions with his longer-term interests.

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Posted 19-Feb-2004 09:02 PM
I woudl so tsoem extent liek to agree on what the author has mentioned—however customer loyalty is there.

Some time back in May 2001, I had responded to Bob Thompson's informal "tortoise vs. hare" survey where in I had talked about the local shopkeepers in India called the Baniyas who were the best examples of creating relationship management and developing loyalty among their customers.

Since the time I had shared my response and till now, things remain the same. I have had teh opportunity over this period to interact with more organizations and professionals and through my experience with them feel there are organizations who are still struggling on achieving the desired "loyalty factor". There is a tendency to focus on numbers (sales ) and not on revenue or quality.

As an organization, and further to what the author mentioned, for an large organization it gets all the more difficult to get that loyalty aspect which an small scale setup or a company can achieve.

Here I do not mean to say that large organizations cannot expect loyalty from their cutomers—but a litle focus on one key area shall increase the loyalty of their customers.
That one key area is "quality interaction with the customer each time by each person from the organization"

This the customer too understands. So when an organization makes mistakes, faults on its commitments or deliverables etc. a customer may not immediately turn its back to the organization.

An organization who over the period has build closeness with its customers through interaction & trust shall continue to have loyal customers. This trust and loyalty is developed through pure "quality interactions ": by each customer touch points and employees over a period of time.

This trust is developed not solely through CRM initiatives, tools & techniques but through a simple factor known as human beings. To the human beings is attached a soft factor known to all of us as "Attitude'.

This atitude of the individual in an organization shall facilitate in developing a strong bond between the organization and a customer.

Now in a large organization a lot of this attitude is cultivated via a mix of right candidates, the HR pratices, the role HR plays in motivating its team and havign engaged employees and not jsut satisfied employees. That is also the reason one comes across organizations wonderign what happened to thier loyalty when the customer ssatisfaction & employee satisfaction scores or good. People management is an art—the best example here is a mother nursing her child. To me the mother is an organization and the child is the employee.

Typically when an organization in addition to formal HR practises cultivates relationship with its employees it generates an emotional bond with the employees. The employees develops a atitude which is "charged up with emotions" (positive) towards the organizations. The employees promotes the organiations, its practices, its products and services to one and all. And believe me when a customer interacts with such employees he feels estatic and is assured he is with the right organization.

Organizations even though they may be sucessful may not have loyal cutomers. Or they may assume the association of a customer to their brand as loyal.

A cutomer can never be loyal to a product or an organization unless he or she ha an emotional attachment to it. I shall substantiate this this with small time shopkeepers or organizations—they take pains to know you, your family, remember your name when you call up on them or visit them. All this a biog oprganization or an organization may also do—however when there is no tmotions in it a customer can make it out.

take another example—recently I was on a trip and was stayign in a hotel which is an international brand—they send me a personalized card which had a poem written on it—now since wheever I visi this place I stay in that hotel I assumed this was the least they could do. Recently I tried out a diferent hotel—not that the earlier one was bad—but just decided to do it. Now why was I not loyal. If teh hotel had cared to be in touch with me, call me up, chat with me to find out how are things etc I would have thought twice before I changed the hotel. I would have thought I better pay for the service to my earlier hotel rather than search for a new hotel—I am emotionally attached !

Emotions are linked to Loyalty—the employees of an organizations have emotions—touch those first and see your loyalty jump! Which are those proceses which trigger emotions in an employees—HR of course. Get them right and the organization can experience loyalty from its customers like it never had.

cheers

Chandra Shekhar

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Niko
Member

Posted 20-Feb-2004 01:36 AM
I agree with the statements. In my professional experience so far I have not seen Loyalty in the true emotional sense: 'I will keep dealing with this org or customer even if it is not the best or most profitable, simply because I feel emotionally attached/comfortable with them or like what they stand for'.

It has always been a case of profitability, product feature fit, cost and convenience (especially the last in the retail sector). Brand Loyalty has always been coupled to these points and maintained by lack of timely, accurate, easy and cheap to obtain competitive brand info. As this info is now more readily availabie thanks to the internet and as the economy bites (at least as it related to cost and product development), one can easily observe Brand loyalty go by the wayside... (Many glorious examples can be readily given in most industries...).

So, I tend to agree that a return to business basics of profitability, product features and innovation, customer service/convenience would serve a company in the long term much more than simply trying to attain the holly grail of customer loyalty.

Regards,

Niko

Regards,

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Posted 20-Feb-2004 12:13 PM
I do think the issue is semantics, and bluffing with emotional scenario is a silly argument. Loyalty is shorthand for a host of concepts that don't fit neatly into a commonly recognized bucket. Perhaps you'd prefer some Dr. Seuss word to lump the concepts, but loyalty gives a jumpstart to communication. The rest is up to the person communicating.

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Vishal Sarkar
Member Council
Member

Posted 24-Feb-2004 09:39 PM
All very interesting observations here!!

I agree to most extent that the reasons for a customers' allegiance to a particular company are mostly for exchange of a benefits at the same time being influenced by their emotional bond to the company/employees. It is a complex equation!

However—I donot concur with the outcry on usage of the word 'loyalty'. This is more a matter of semantics or how the word is being used.

A word can have many meanings depending on the context it is used in. If the context is understood by the audience, why the confusion—as long there is no malice intended?

Relating it to emotional bonds like that of a 'parents-children' or 'country:soldiers' seems out-of-context in this discussion. I feel we all know what we are trying to 'imply' by 'loyalty' ( a sum total of various customer behavior patterns) in the customer management context so it is best to be objective about this word usage.

Vishal

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Posted 26-Feb-2004 10:51 AM
Brilliant—I couldn't agree more with the nature of the message. Can't help wanting to hear your opinion upon a related issue as well:

in 90% of all textbooks you can read that consumers are far more demanding than they used to be. They are called promiscuis, browsers etc. But are we truly that much more demanding than for example in the eighties or seventies? Isn't it really all about experiences—we are promised something and expect the product, service etc to deliver on that promise?

Regards,

Pat

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Posted 26-Feb-2004 01:27 PM
I beleive loyalty has to be defined broadly. Your definition, which seems to center around the 'deep emotional commitment' is one aspect. In commercial terms, when a consumer prefers one brand over another, abeit sometimes due to purely economic and rational reasons should mean loyalty. In markets like petrol, airline services, hotel stays, where products are undifferentated and services have no noticable difference, I have seem loyalty and reward programs induce significant preference for a brand due to incentives. How else do you explain the proliferation of rewards programs, frequent flyer miles and hotel points ?

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terence
Member

Posted 26-Feb-2004 08:33 PM
I agree with Bill Babcock. Loyalty is very much a common business or marketing language. It acts as a measure on how well we are able to meet our customers' needs so that the propensity for these customers to switch brands is reduced. Therefore, to answer the question if customers can truly be loyal, the answer would be whether as a service provider, we can continually meet their needs over and beyond what others can do.

The small provision stores are seen to be able to intuitively create customer loyalty probably because they are able to meet the basic intrinsic needs of their customers. Plus the critical human factor of "We know you"

Isn't this what CRM is trying to do in a nutshell? To simply tell our customers that "we know them". It is the challenge of creating that "one to one" personal feeling in a "one to many" market environment of a big organisation. And thru this, create what we would summarily call "customer loyalty".

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Niko
Member

Posted 01-Mar-2004 12:44 AM
AC,

In reference to the loyalty and reward programs you are mentioning below, such naming is a misnomer. What the companies execute is a clever product offering programme which wraps a discount 'in kind' (ie other than direct monetary, around the basic product offering. I believe that the behaviour they induced was the same as if they would have discounted the product in the first place. I would also agree that they managed (in the airline sector) to create competition among THEIR OWN customers on card level status (Gold/Premium etc) thus inducing upgrades and possibly more frequent travel.

Loyalty? I think that not many customers remained loyal to BA or BMI due to these 'loyalty programmes' once EasyJet, Buzz and RyanAir got into the game, or else why did they have to introduce similar pricing to compete?

As to the more general point of the meaning of the word 'Loyalty', and partly in reply to Vishal's comments, once you start expanding the meaning of the word you get into the realms of other words that can be used to convey the same meaning, wouldn't you agree? In which case why not use the word 'following' (too religious?), 'custom' (does not rime / sound good, too ordinary?)?

May I suggest that the word 'Loyalty' was used because not only did it sound good as a buzzword, but also was meant to convey to the business managers the emotional messages that the word 'carries' with it, as they were expected to be felt by their customers? Only to be 'widened' once it did not?

Did the local shop around the corner survive when the big super markets came along? Was it lack of loyalty? Not really. It was product offering and pricing (certainly not convenience). Why are they making a comeback? Did they magically manage to inspire loyalty to the average person in the neighborhood/village? Hard to believe. I would rather suggest that it is convenience and product offering (they have started stocking the specialist things that the Big ones deem unprofitable to carry.

It has been said before in this thread and, in my humble opinion, it sounds more believable: 'Product/Pricing/Production and distribution innovation will get you custom/loyalty/following'

Regards,

Niko

Originally posted by ac:

I beleive loyalty has to be defined broadly. Your definition, which seems to center around the 'deep emotional commitment' is one aspect. In commercial terms, when a consumer prefers one brand over another, abeit sometimes due to purely economic and rational reasons should mean loyalty. In markets like petrol, airline services, hotel stays, where products are undifferentated and services have no noticable difference, I have seem loyalty and reward programs induce significant preference for a brand due to incentives. How else do you explain the proliferation of rewards programs, frequent flyer miles and hotel points ?

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JoAnna Brandi
Member

Posted 01-Mar-2004 11:52 AM
At The Customer Care Coach (tm) we teach that every one has an "Inner Dictionary"—our own personal definition of words. Loyalty may mean something different to me than it does to you. In the author's case, the definition is linked with deeply held and deeply emotional commitments. While I agree that that is one degree of loyalty, it not the only way it can be interpreted.

As a customer, I can tell you that there are some establishments to which I am loyal. Most of the time I am loyal because I am connected to the people there as well as to the service they provide. Emotional attachments are not always "rational" customers do sometimes go back to companies that don't have the greatest products or services but with whom they have created an attachment.

I teach people how to create loyalty by creating emotional attachments. To take the word loyalty out of the customer service arena would take away one of our highest goals—to create a relationship so strong, so powerful and so emotional that customers are willing to tell their friends about it. When we bring a friend, or recommend a friend we are taking responsibility for the friend's experience, to some degree. When I recommend my dry cleaner to you and they ruin your shirt, I apologize, I feel badly because I feel partially responsible for your experience.

Because loyalty IS an emotional experience, it's a useful training tool. The customer experience is the sum total of the feelings that are evoked as a result of any interaction at any touch point in an organization. (That's my definition) Understanding what feelings are and how to tap into their power is critical is both designing and delivering the experience. That customer experience is based on the perception of the value delivered, tangible and intangible. If I think, feel or perceive you are rude, you're rude. If I think, feel or perceive you care about me and my business, then you're caring. If I feel good when I interact with you, I'm more likely to want to repeat the experience. If I'm frustrated, angry or feel I've been taken advantage of, I won't want to repeat the experience.

Believe me, I know there are variables and many many different ways customers compute "value." We've overlooked the simple explanations in favor of ones so complex the people delivering the service can't keep track of them. Give me value and make me feel so good about the experience that I want to repeat it and tell my friends.

JoAnna Brandi
Publisher, The Customer Care Coach ®

JoAnna Brandi, Publisher, Customer Care Coach. Author, Public Speaker, Consultant in Customer Retention and Loyalty

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Helmar
Member

Posted 01-Mar-2004 10:52 PM
In my opinion, many companies/executives preoccupy themselves too much with gaining and sustaining customer loyalty. They should rather make the time the customer stays with them ('the journey') worth-while.

Loyalty is the destination, and everybody would love to "get there", but sometimes there are factors beyond one's control that put an end to the patronage.

Example: when the (graphical) Internet came about, BBS all but died as a result of my (and many others') loyalty to them coming to an end.
The ride was good though, and one moved on with fond feelings.

Interestingly, if companies focussed more on the journey rather than the destination, the destination would move so much closer.

In short, just as with love, trust, respect and CRM (!!), success happens when you work on the periphery (in the case of loyalty it would be "the journey"), rather than getting mentally and procedurally locked into the destination. This, in my eyes, is the real secret that very very few people have discovered. Not really coincidentally, the high CRM failure rate attests to that.

—
___________________________________________________________
Helmar Rudolph works with visionary companies to help them succeed with
their CRM-related business transformation process—on time, on budget
and in a sustainable manner.

http://www.argo-navis.com/consulting/
mail@argo-navis.com (27-21)713-0022
9 Forest Park, 3 Park Ave, Tokai 7945
Republic of South Africa

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Posted 04-Mar-2004 04:03 AM
I've always understood Loyalty to refer to two basic ideas.
1. Creating an environment in which the customer must return. (Call it enforced Loyalty)
2. Creating an environment in which the customer chooses to return.
Both are valid and are not mutually exclusive.
I see very little sense in discussing the true nature of Loyalty from a humanistic standpoint as few businesses can ever really commercialise it. What is important however is the process of conceptualising ideas of Loyalty and then applying into the reality of a business.
Loyalty 1 and 2 exist and function perfectly well if one remains within the realms of practicality, I have never discussed with my shareholders if my repeat business is due to "Real Loyalty".

In old marketing terms company image, brand values, quality and service are driven by an understanding that the consumer makes value judgements about their choices and constantly reassess their appropriateness to their changing lifestyle needs. Businesses use CRM primarily to understand how the offer is being judged but also how their clients are evolving their lifestyle.
The satisfaction-Loyalty-ROI equation is a simple way of communicating why businesses need to do this, Loyalty was never meant to provoke a need for evangelic, born-again consumers. (or marketeers!)

Loyalty 1 examples: (I'm Loyal because I don't have a choice):

• House owners with mortgages that have a penalty clause for extinguishing the debt early.
• Franchisees with a penalty clause for not adhering to purchasing rules.
• Internet connection providers and the inability to transfer your e-mail address
• Telephone companies that won't allow phone numbers to stay with the client.
• Car manufacturers that won't honour guarantees if you use unbranded spare parts.
• Bus and train journeys

The list is endless and all create an enforced loyalty.

Loyalty 2 examples:

• Football club fans
• TV episodes
• English Pubs
• Tastes that become habitual, Coffee brands, tea, Mayonnaise, Cigarettes, wines
• the list is endless.

• A service that becomes habitual; receiving the CRM guru e-mail, horoscopes.
  Newspapers, magazines

There are products that evoke emotional rather than rational choice, for example a few years ago the public support for Virgin Airlines against the all-powerful British Airways, Images of Che Guevara on T-shirts, Microsoft verses Apple computers, Harley Davidson. Etc.

In both forms a business has many options available to create Loyalty. The need (or lack of) repeat business including Up and Cross selling, should reflect the level of investment a business dedicates to creating the chosen consumer Loyalty environment. Understanding the importance of applying ideas of loyalty is of issue not what the consumer is really psychologically experiencing. ROI is the empirical measure not a white paper on human behaviour.

Steve Jones
AEC Italy

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Posted 11-Mar-2004 12:59 PM
What we believe is missing in your discussion is the distinction between loyalty and customer commitnment. This is probably the missing link in the entire customer-centricity discussion. In Switzerland we find that frequent MIGROS customer will also carry a COOP Supercard in their wallet. Does this mean they are more or less loyal MIGROS customers? I think it is about time we start measuring customer engagement based on reliable and valid metrics.

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Mukund CRM mukund_ks34@hotmail.com
Member

Posted 18-Mar-2004 05:30 AM
Greetings,

CRM and Loyalty 2 terms to ponder.Let me state it in this fashion Loyalty does not apply to customers (according to what some say) as they they follow a metamorphisis with new products they do not want to be tied down to one vendor or organization making themselves fully dependent on one source. They want to exlpore the options that best suit their requirement as their requirement changes. So what is the need for CRM or why should an orgnization spend huge amounts and time over implementing CRM. They could as might as well use the revenue to devlop new products to captivate and capture the market. Is CRM really required ????

Regards

KS Mukund
CRM System Specialist
mukund_ks34@hotmail.com

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Posted 10-Jun-2004 07:43 AM
In fact, I whole-heartedly disagree with the original post.

To fully understand why this is, you should take a look at the inverse, or antonym of the term, disloyalty. What would cause you, as a consumer, to become 'disloyal' to a previous choice on a business to interact with?

Well, if you have a negative experience with an organization as a consumer, typically speaking you remember it. For a long, long time, in fact. Not only do you remember it, but depending on the level of dissatisfaction, you may even mount a personal crusade in telling your friends about what bad service suchandsuch a company gave you. This vehement disdain for a company shows that as a consumer you can and will have a very deep emotional connection to a particular company—both positive and negative. So, if you're trying to argue that customer loyalty doesn't exist, it's actually "Long lasting and mutually beneficial relationships," then you must also accept the inverse—once that relationship disintegrates or fades away, it does not leave a reciprocal emotional trace or impact on the end consumer.

To touch upon loyalty in particular—I am and always will be a loyal consumer. Where people go astray, is assuming that customer loyalty is always the result of service. Loyalty can be a result of culture, habit, and various other things which a business generally has little to no control over.

I will provide an example or two.

I am a Canadian. I have lived in Canada (save for some prolonged business trips et cetera) essentially all of my life. In Canada, we have a coffee/donut chain of stores called Tim Hortons (You may or may not have heard of it.) It was founded by a rather well-known professional hockey player by the same name. So lets examine this business from a Canadian perspective: It is a Canadian business, founded by a Canadian; It isn't found very easily outside of the country, thus establishing a feeling of ownership; It was founded by a professional hockey player, hockey being a sport in which most Canadians pride themselves in following (also due to it being a Canadian invention). The list could go on for quite awhile.

Every day before work, I stop and get a coffee and a muffin. _Every_Day_. Sometimes I also go out for coffee in the evenings with friends or co-workers. Regardless, when its coffee time, I find myself at Tim Hortons. I have been burnt by their coffee. I have had my order messed up on more than one occasion. I don't particularly have any informal relationship with any Tim Hortons employees—any location will do regardless of who's working there or what part of the country its located in. The prices are in-line with major competition, but are by no means the best in the market. The locations are not always convienent to where I'm headed, but I will travel the extra distance. They only accept cash (at least in this province)—and if they started doing Interac payments, the last use of carrying cash on me would be dead in the water. That's right, I actually make a point to go to a bank machine and withdraw cash for the sole purpose of having money to use at a Tim Hortons. I can't honestly think of one other thing I use cash for, aside from the occasional coins in parking meters when needed.

This is loyalty. There is nothing exceptional about this franchise over any other franchise. I go to the US on a business trip, and I'm surrounded by Starbucks. I have a sense of longing for the environment Tim Hortons has created for me—in fact a part of my identity. If I ever had to move out of the country, I would continue to order their products in canned form (ala coffee grinds) simply to support the business and to continue to exert this sense of loyalty to them. I can not see anything that they could do (short of declaring war on a third world country as a corporation!) that would make me stop searching out their locations to patronize. If somebody comes up to me and tells me about a horribly negative experience they had at Tim Hortons, I will argue on their behalf until I'm blue in the face.

This, is customer loyalty. It can not always be bought (though it can in some cases), and it is not always the result of greater customer initiatives (such as a CRM project). Tim Hortons is MY COFFEE SHOP, and there is nothing anybody can do to take that away from me. To say that is simply "Long lasting and mutually beneficial relationships" is absurd—it's not beneficial to me in the least. In fact, in some cases its the opposite, a pain to go out of my way to seek out their establishments, or pay an extra price, or make sure I'm always carrying cash.

I invite you to refute this, however I don't forsee it happening. I am by no means arguing that customer "loyalty" (in a very exact 'straight-out-of-a-dictionary' sense of the word) is a common-place occurance, but it most assuredly does exist, as seen above.

I will concede, however, that in a very strict definition of the word, it is sometimes overused and misassigned to incorrect examples. But, as illustrated in posts above mine, the terminology used is simply a means to an end—as long as the target audience understands what context you are using it in, what difference does it make what word you use? If I want to use the phrase 'big pink and purple elephant' to mean revenue forecasts within my business, and everyone jumps on board with this new term and understands it, how does that make it wrong?

Personally, I think your views are extremely narrow-minded on this issue. Broaden your horizons and accept that different people are just that—different. And it in no way makes them better or worse than yourself. Perception is reality.

—Justin
justinwebster@telus.net