Why companies are struggling (and will continue to struggle) in cultivating customer loyalty

Only 17% of companies scored ‘strong’ or ‘very strong’ on customer loyalty

I read the following post – ‘Customer loyalty – does anyone care? and that got me thinking.  The author is highlighting the research carried out by the Temkin Group that shows that only 17% (24) of the 143 companies surveyed scored a ‘strong’ or ‘very strong’ loyalty’ rating.

Many underestimate what it takes to be strong/very strong in customer loyalty

In my opinion a lot of people who write on customer experience, customer loyalty and customer-centricity simply do not get how hard it is for large established companies to deliver on this stuff.  For these companies becoming customer-centric, delivering a great experience and generating loyalty is as likely as goals in the average soccer match – a rare event. Why is that?

An old quote that sheds light on the matter

There is a really good quote that gets to the heart of the matter, let me share it with you:

” A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die, and a new generation grows up that is familiar with it”   Max Planck

What am I saying?  I am saying that a big change in the customer-centric direction is highly unlikely until there are changes in the following domains:  business models, business leaders, management mindset and organisational structure.

Plenty of companies are doing well without being customer centric or delivering great customer experience

The fact is that plenty of companies do well without being customer-centric.  I explored this topic in the following post: Who says you have to be customer-centric to thrive

You can do well because you have strategic assets and I gave an example here: Bewleys shows that an organisation with strategic assets can deliver a poor customer experience and get away with it.

Existing business models are a huge obstacle in generating customer loyalty

I explored the issue of business models and how they get in the way of any customer-centric initiatives in the following post: ‘Contrary to popular opinion it is easy to become customer centred’

The organisational climate – mindset, culture, structure – is another big obstacle

If you are a gardener you will know that you simply cannot throw seeds anywhere and expect them to sprout into healthy, tall plants.  It is the same with organisations.  The way that organisations are structured, led and managed has a big influence on what kind of initiatives flourish and which struggle to take root.  I explored this in the following posts:

Do the customer experience designers have what it takes to design experiences that generate loyalty?

And finally I took a look at the customer experience designers themselves and questioned whether they have what it takes to actually design customer experience that work for customers: The problem with Customer Experience is the designers

Conclusion: the heart of the challenge is  leadership and ‘change management’

The heart of the challenge in cultivating customer loyalty is one of leadership and change management.  Specifically, giving up the existing ways of thinking about, organising and doing business.

This challenge is a difficult one at the best of times.  It is especially difficult when the people who have to change are the people at the top of the organisation.  Yet there is good news:  Gerstner managed to bring about a transformation at IBM.  It helped that he really had nothing to lose as IBM was a basket case and headed for oblivion!

Author: Maz Iqbal

Experienced management consultant working at the intersection of strategy, customer, and technology. Combine a tendency to think strategically with a penchant for getting my hands dirty at the coalface of implementation.