What do you prefer — Repetitive business from customers or loyal customers.?
OK.. lets look at what they each mean.
Repeat business is when people do business with you again and again and again
Loyalty is when people are willing to turn down a better product or a better price or suffer inconvenience to continue to do business with you.
Repeat business is when I go to the nearest supermarket to buy groceries again and again. I don’t have any reason to go there except that it’s close by or has some great deals.
But if I happen to be in another neighborhood or happen to find another place which offers more convenience I would head there:
Loyalty is when I book in jetairways again and again. Why? It is a fantastic airline, offers great “loyalty program” I rarely want to miss accumulating my miles or number of flights which keep me hooked to access the the current loyalty level or the next higher one. And as a reward for my loyalty with them they offer upgrade vouchers, or free lounge access or extra baggage allowance, early/late checkin options, priority baggage treatment etc. So if I’m traveling whey would I want to travel with another airline and make a split loyalty decisions. I would rather be their “platinum” customer than being a “silver” customer with two airlines etc, even if I get a better price with another airline
Loyal customer doesn’t even bother to research the competition or search anywhere else. Ex: for online shopping i don’t even “google”. I just “amazon” it
I don’t even check if I can get a better deal in any of the competing sites. Why? I have had very good experiences with the initial orders that made me trust them more than I trust my research.
Loyalty is not however easily won. Repeat business is. You can win over your customer to do repeat business with a manipulative strategy. Lower your prices, offer cash backs, and you could get a lots of users addicted to your platform. The long term health of organization takes a hit, for short term gains.
Manipulations lead to transactions and not loyalty. So when the market is good, manipulations work fine. In fact manipulations work. They cost money. Lots of money. Works fantastic, when you have money to funds those tactics. And when the money dries up, you will be left with hardly any loyal customers.
Loyal customers are less tempted by other offers from other businesses. In the tough times, loyal customers are our only saviors. They will not only buy from us, but also will be our brand ambassadors.
(a lot of thoughts above were inspired by one of my favorite Simon’s Sinek’s book — “Start with Why”)
