Loyalty

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Loyalty is a concept we’re all familiar with and it is something we might set as a goal in our business plans. But to what extent is brand loyalty a reality and how much a myth?

Recently someone I know who is in the home maintenance business remarked: ‘There is no loyalty in the services I provide.’ What he meant was there was no loyalty to the service provider; people bought mainly on opportunity and on price. This of course gives him both an opportunity and a threat depending on whether it is a new prospect or an existing customer.

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In the world of home energy suppliers it seems we are reluctant to change suppliers, which is why the big 6 dominate. But is that loyalty or is it in fact inertia, or another L-word, laziness? I’ve seen a number of consumer affairs programmes over the last few months and it seems that changing energy suppliers is just not on the ‘to do’ list for many of us, despite the savings of several hundred pounds that can be made by a simple switch from one to another company. A current TV advert even goes so far as to state that all gas and electricity is basically the same, the ‘product’ is identical and so in effect the change is only really in terms of who actually bills you. Despite this many of us just can’t be bothered, so it is laziness, not loyalty that keeps us with who we are with – if we can even remember who that is of course.

The world of retail banking is pretty much the same. A teenager given a bank account by their parents is likely to stick with the same bank well into middle age or even retirement. I suspect some of this is down to the fact that banks are, like insurance, seen as something you ‘have to have’ not something that you ‘want to have’. Whilst I am quite good at switching my energy supplier I’m as guilty as the next person when it comes to banking, despite some recent lackluster service:

Attempting to open a new account with my current bank they made three basic errors in as many weeks. After the first I put it down to bad luck. After the second they offered me some wine as an apology, which I declined since I just wanted the error corrected. But after the third screw up and a second offer of a couple of bottles of fine wine I finally accepted their gift.  All is now well but I thought long and hard about changing my bank.

The trouble is that this is the bank that launched in the late 1980s and consistently comes top of any polls about best banks. So if this is the best, how bad can the others be? (The sad thing is that having been evangelical in my praise for this bank over the years, whilst I still think they are pretty good, I’m now reluctant to actually recommend them to anyone).

In conclusion perhaps others stay put with their existing supplier not because they like what they get but for the fear of how much worse things might be with someone else.

Call it what you will but it’s not really what we should call loyalty is it?

 

 

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