Last week, I posted a survey result on LinkedIn that indicated that Tim Horton’s coffee was no longer the 1st choice of Canadians. In fact, the ubiquitous franchise (there is even one on a military base in Kandahar) has slipped to 4th. McDonalds, a foreign invader, now sits upon the throne.
The thing is, Tim Hortons doesn’t deserve my nation’s love, and they haven’t for a long time. They have lost their way, and I chose to call them on it. I caught so much heat from their loyal customers that you’d think I had suggested we abolish the Monarchy.
This got me thinking about loyalty, and what kind of loyalty you want to build within your customer base.
There are two kinds.
The first is loyalty of obligation/convenience. Think your mobile phone provider, your airline of choice or maybe a hotel or credit card loyalty program.
Your customer might look around, but they likely won’t switch because switching is risky. Switching takes time. Switching means you have to manage a whole lot of unknowns – new people, new process, new passwords.
Switching means your lack of familiarity might mean you make a mistake, cost yourself something, or lose your benefits. In short, this is loyalty based on fear — the fear of it being hard, and of you possibly missing or losing out.
Corporations are really good at this. They keep you sticking around by ensuring it’s too hard to leave. Not exactly generous, but it gets the job done. Or does it?
Then there is the loyalty of connection and identity.
This is the loyalty that Tim Horton’s has created with their customers who are so loyal, they don’t even care that hobos under a bridge make a better cup of coffee. They don’t care, and they are not looking. They will happily stand in line for too long to get a middle of the road, not-too-this but not-too-that cup of coffee because it means something to them. Not the cup of coffee, but what Tim Horton’s represents to them.
The problem with the loyalty of convenience is that the customer is always tempted to look, and look some more, and the business owner is always working to build fences around the customer with which to hem him in. These are barriers that don’t necessarily increase satisfaction but merely build a minefield of hassle around the now trapped customer.
The power of the second kind of loyalty, the loyalty of identity and connection, is that the person who isn’t even looking is committed, as committed to the relationship as the business owner is.
You earn this sort of loyalty with affection, gratitude and generosity. This is the kind of loyalty that enlightened and inspired entrepreneurs to understand. This is loyalty that happens when you realize the coffee isn’t the product, the customer is.
Keep in mind you can only focus on creating one sort of loyalty at a time.