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If Jane comes to your store every Saturday and spends $50, would you consider Jane a loyal customer? Driven by concerns about the bottom line, businesses often define loyalty based on how much consumers spend and how often they buy. But digging a little deeper into the psychological reasons behind “loyalty” can reveal important insight and help identify effective target marketing strategies.<\/p>\n
In Jane’s situation, there are two possible reasons behind her “loyal” patronage: (1) she genuinely likes your products and services, and therefore, when need arises, she always comes to your store to make a purchase; (2) she comes to your store out of habit, whenever she’s on her way to visit her grandma on Saturdays. In other words, both habit and true loyalty can drive Jane’s seemingly loyal behavior, and your optimal marketing strategy should be different based on the exact reason involved. Let’s dissect this a little further, shall we?<\/p>\n
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To understand the difference between loyalty and habit, think about someone who gets up every morning and drinks his cup of coffee (or orange juice for the more health-conscious). He may really like coffee\/orange juice, or he may be doing that simply because that’s what he has always been doing for the last 20 years. It turns out habit and true loyalty are quite different processes. The table below highlight a few such differences.<\/p>\n\n
| <\/td> | True Loyalty<\/th> | Habit<\/th>\n<\/tr>\n<\/thead>\n | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
What drives behavior?<\/em><\/strong><\/td>| Belief about product superiority and\/or emotional connection<\/td> | The presence of contextual cues (e.g., eat cookie -> want milk)<\/td>\n<\/tr>\n | Awareness<\/em><\/strong><\/td> | Conscious decision<\/td> | Automatic process with no clear decision-making process<\/td>\n<\/tr>\n | Purchase pattern<\/em><\/strong><\/td> | Erratic as need arises<\/td> | Consistent in terms of time, location, and context (see more below)<\/td>\n<\/tr>\n | Reaction to competitive offerings<\/em><\/strong><\/td> | Aware of competitive offerings but relatively resistant due to loyalty<\/td> | Blind to competitive offerings<\/td>\n<\/tr>\n | Deal breakers<\/em><\/strong><\/td> | Dissatisfaction, product quality issues, service failure, etc.<\/td> | Change of contextual cues, such as store layout redesign, location change, etc.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n | Why Should You Care?<\/h6>\nGiven that both a habitual customer and a loyal customer can buy a lot of your products, you may wonder why you should care what category the consumer falls into. Here are a few reasons why:<\/p>\n
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