Does this scenario happen? Yes it does.
Over at Harvard Business blogs [1], Conversation Starter [2] 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 fairlyRead more… [3]
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 [4], 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.