Loyalty or Just Repeat Business
by Stephen Ghelerter
Posted 10/08/2007

So you have customers that have been coming back to you over and over again for years. But does that mean that they are loyal?  Maybe they find your company marginal or generic and return for one of these reasons:

• They are familiar with your phone number or location.

• They have a fear of the unknown if they approach someone else.

• They don't know anyone else to call.

• Your firm has some familiarity with their needs and they don't want to make the effort to start over with another vendor.

• The don't want to take the time to research a new vendor.

If you are a takeout pizza restaurant, do they call you because your pizza is so good and your service is so fast, or because your phone number is on a magnet on their refrigerator and they don't want to make the effort to look in the phone book for someone else?

Maybe they use you because your are just OK. This may seem to work, but it is risky. As soon as someone else approaches them, by personal visit, coupon in the mail or in a newspaper, or a television ad, you could lose them.

The trick to loyalty is twofold. First, be good at everything you do so there is no great incentive to go elsewhere. Good service, good products, knowledgeable personnel, etc. Secondly, be outstanding at something. 

What that something should be depends on your capabilities and the needs of the market. For Walmart it is low prices. Sears for many yours offered satisfaction or your money back. For Brookstone it is having the coolest, neatest stuff.

I know of a grocery store in an upscale location that has valet parking. Some stores will let you have an item free if it is priced wrong. I have vendors who offer discounts or faster service if I place my order online. Domino's Pizza became big by offering free pizza if it was not delivered in 30 minutes.

The ideal something is something your competition can't easily duplicate. While McDonald's was frying their burgers, Burger King promoted theirs as "grilled, not fried," i.e., healthier. McDonald's couldn't start grilling all of a sudden. They just had to bite the bullet and lose out to those who perceived grilling better.

Whatever you are outstanding about won't appeal to all your customers, but the ones who do like it will not want to go to your competitor. People who like the easy ordering process and free shipping that amazon.com offers don't want to shop elsewhere.

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